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Danger Zone: Freight Broker Warning Signs to Know

freight broker

Hey freight brokers, let’s cue Kenny Loggins: 

“Highway to the Danger Zone / Gonna take it right into the Danger Zone / Highway to the Danger Zone / Ride into the Danger Zone / Highway to the Danger Zone / Gonna take it right into the Danger Zone / Highway to the Danger Zone / Ride into the Danger Zone / Highway to the Danger Zone.”

Huh, it must have been the guitar riff or the association with the movie “Top Gun that made “Danger Zone” a hit because the lyrics don’t deliver much of a message, do they? 

Outside Hollywood, a danger zone should be avoided at all costs. Fly-by-night freight brokerages are constantly launching businesses. You’ve got to look for the warning signs because, in the transportation industry, you want to steer clear of the danger zone.

In a Volatile Logistics Landscape, Freight Brokers are Key Allies

Partnering with a trusted freight broker is essential, particularly in times of supply chain disruption. The growth in e-commerce —  and imports of those products — has resulted in more complex supply chains and the need for effective and efficient communication and freight tracking.

“Supply chains of shipments span different countries and regions and the trade has become a 24/7 business. High performance in logistics not only requires improved connectivity along sea, rail, and roads but also spans across different areas such as information-processing, financial markets, and telecommunications,” an Allied Market Research report on the freight brokerage market said. 

“Furthermore, the adoption of freight brokerage services is on [the] rise owing to numerous benefits provided by them to e-commerce companies, for instance, efficient tracking systems, cost-effective shipments and a faster quoting process.”

Five Freight Broker Warning Signs

Finding a top-notch freight broker is easier said than done. Googling “freight broker” won’t help; the countless websites and videos will just make your head spin. Look for warning signs to help you wade through the huge field of freight brokerages.

1. Poor Communication

Good communication is important in any business, but in the freight brokerage industry, it can be the key to staying in business or going under. Today’s shippers demand real-time communication 24/7/365. And, most importantly, that communication, whether it’s delivered via a phone call, email, or web portal, must be accurate and informative. If a broker says, “Let me get back to you,” you may need to move on. 

Poor communication can lead to a slew of supply chain headaches, including delayed or lost shipments. Shippers also may find unexpected charges on their invoices — because they weren’t told about them. 

When considering partnering with a freight brokerage, ask how — and how often — it communicates with customers. That brokerage should share its communication strategy. If it doesn’t have a communication strategy, that’s a red flag. 

According to The Strategy Story, a company’s communication strategy should be built around clear and concise messaging, targeted communication, multichannel communication, and listening and responding to customers. 

2. Limited Carrier Options

A freight broker you can trust to move your goods wherever they are in the world requires a wide network of reliable carriers. Limited carrier options reduce flexibility and potentially result in higher costs. 

When considering partnering with a freight brokerage, ask how many carriers it has in its stable. If you’re told, “We’ve got enough,” that’s a red flag. If you ask about the vetting process and are told, “Yeah, we vet them,” but that statement isn’t followed up with an explanation of the actual vetting process, that’s a red flag. 

Through our partnership with Highway, a leading carrier-vetting software platform, RJ Logistics offers shippers a key range of carrier assurances. 

  • Liability mitigation. Brokers could be held liable if a carrier they hire is involved in an accident while transporting goods.
  • Reputation management. Hiring unreliable or unsafe carriers can lead to reputational damage that’s hard to overcome.
  • Meeting shipper requirements. Properly vetting carriers ensures carrier networks align with shippers’ needs.
  • Business agility. Freight brokers must quickly onboard carriers to cover freight, satisfy shippers, and remain competitive.

3. Lack of Cost Transparency

Transparency, particularly cost transparency, is critical in an effective partnership. When considering partnering with a freight brokerage, broach the subject of transparency. If the broker dodges questions about hidden fees and unclear pricing, that’s a red flag. 

“Freight rates, the costs associated with transporting goods, are influenced by a multitude of factors including fuel prices, capacity availability, demand patterns, and geopolitical events,” an article posted on the website of CargoNet, a logistics software provider, said. “The lack of visibility into the calculation of these rates has historically led to mistrust and misunderstandings between shippers and carriers.”

That mistrust and those misunderstandings extend to the middleman, the freight broker. CargoNet said cost transparency is critical for informed decision-making, trust and collaboration, cost management, market competition, dispute prevention, and conflict mitigation. 

4. Missing Insurance and Financial Instability

When considering partnering with a freight brokerage, ask about payment terms and insurance coverage. Payment terms that aren’t set in concrete and insurance coverage that isn’t easy to verify are red flags.

“Are there any liens, lawsuits or legal judgments against them? If you turn up financial problems, keep your distance. Better to build an ongoing relationship with a freight brokerage that has been growing steadily in revenues, staff, technology and capabilities over the years,” a Triumph Financial Services blog said.  

Triumph Financial also advises ensuring that freight brokers carry contingent cargo insurance.

5. Poor Compliance Standards

If a freight broker has been dinged for failing to adhere to industry compliance and regulatory standards, that’s a red flag. 

When considering partnering with a freight brokerage, come up with a checklist for assessing its safety, environmental, and legal standards. A freight broker license should top the list. 

“Do they have a federal property broker license issued by the Federal Motor Carrier Safety Administration (FMCSA) and broker authority? Do they have a freight broker bond? A $75,000 surety bond is required by law for all brokers, providing protection for carriers in the event that a broker fails to pay freight charges. Check out the FMCSA’s searchable database to see if a freight broker is properly licensed and bonded,” the Triumph blog said. 

Finding Your Perfect Freight Broker

You can’t trust your freight with just anyone. You need a freight broker that fits your specific needs. Find the perfect freight broker by doing your research, evaluating its communication and technology capabilities, and verifying its credentials and compliance. 

Conduct Thorough Research

Shippers should start by researching potential freight brokers online, reading reviews, and checking their history and reputation in the industry. It’s crucial to look into their expertise in specific freight types and industries to ensure they align with shippers’ needs.

“Securing the shipment and receiving the material is always critical. The RJ team reduced the stress and frustration around the process through outstanding communication. When the RJ team took charge of the situation, they made sure the job was done properly and on time. With RJ, I don’t worry about my product being picked up and delivered,” an RJ Logistics customer said. 

“We have found the Leadership team at RJ Logistics to be extremely welcoming and easy to work with,” said another customer. “Our Leadership team holds their counterparts @ RJ as like-minded as they put the customer, people, and quality first.”

Evaluate Communication and Technology Capabilities

Prioritize brokers that demonstrate clear, proactive communication and employ advanced technology for tracking and logistics management. This ensures transparency, efficiency, and the ability to adapt to any shipping challenges.

At RJ Logistics, we provide simple solutions to complex problems with state-of-the-art technology, industry-favored customer service, and the drive for mutual success. 

And, we keep you informed every step of the way. It might require some extra time on our end, but you deserve to be kept in the loop about the progress of your freight. You deserve proactive communication — knowing how things are going long before you need a major update. 

Verify Credentials and Compliance

Always check a broker’s licensing, insurance, and compliance records. Ensuring they meet all regulatory requirements and have good standing in the industry safeguards against potential legal and financial risks.

At RJ Logistics, we’re an open book. It’s easy to find that we’re in good standing. The FMCSA’s SAFER site is just one place to check how we’re doing. 

Avoid the Danger Zone with RJ Logistics

At RJ Logistics, we know that speeding into a danger zone while a Kenny Loggins tune blares is not a good idea. We are committed to transporting freight safely and efficiently — no theme song required.

RJ Logistics team members are experts at truckload, flatbed/specialized, cross-border, drayage, and expedited transportation solutions throughout North America.

You deserve prompt service, quality communication, and people who care — and a logistics provider who can steer you away from the danger zone. Get a quote today.

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