If you have been following along with our series on financial considerations to starting your own trucking business you have acquired equipment, secured the appropriate licenses and permits and obtained insurance. You should now be ready to get on the road! But wait … in order to get on the road, you need loads to haul. It might be tempting to partner with the first broker or shipper you hear from, but that could stall you out before you even start. A key to long-term financial success is finding reputable brokers and shippers.
Why it is important
In many cases your brokers and shippers dictate how much you will make for each load you haul, how many loads you haul, where you haul them and how much down time you have to endure. For someone who has that much influence over your business, it is imperative that you are working with professional and reputable people. If not, the most significant consequence could mean the difference between getting paid and not getting paid.
What to look for
Experience – Experienced shippers and brokers should have knowledge and connections that will help you and your business. It could be helpful for you to ask for three references of other carriers they have worked with to get a take on if they are a good fit for you.
Along with experience should come their credit rating, which could indicate their likelihood to pay you and pay you on time. It could be beneficial to run a credit check on your brokers and shippers before you haul their first load to decrease your risk. If you work with a freight factoring company, such as Tetra Capital, we will run free credit checks for you.
Licensing – One of the first things you should check before working with a broker is their license status with the Federal Motor Carrier Safety Administration (FMCSA), you can check it at http://www.fmcsa.dot.gov. Information regarding the status of the bond is also available on this site on the insurance section. If the broker authority is not active, it might not be in your best interest to take the load because it ensures legitimacy for the broker and security and protection for you.
Support – To be successful you need brokers and shippers who are there to support you while you are on the road. This can include ensuring they will be there to answer your call if an issue arises, helping you to eliminate empty miles, offering driver-friendly facilities and adequate communication among other things.
Hopefully, these tips on partnering with reputable brokers and shippers will help you choose the right partners to grow your business. Stay tuned for part 5 of our series on securing financing.