The Strategies Freight Brokers Use for Freight Cost Optimization

Pamela Nebiu Pamela Nebiu March 07, 2023
The Strategies Freight Brokers Use for Freight Cost Optimization
The last few years have been difficult for shippers to navigate, and disruptions continue to exist. As one aspect of the freight market stabilizes, another becomes volatile.
Over the last few years, one of the greatest assets of shippers has been their strong partnerships with expert freight brokers. As shippers have struggled to find capacity amidst driver and equipment shortages, freight brokers have reaffirmed their value by keeping freight moving.
Freight broker companies add intrinsic value to the continuing growth of e-commerce and omnichannel distribution. With the growing importance of freight brokers, the market grows in tandem.
“...the global freight brokerage market amassed revenue of $48.1 billion in 2021, and is expected to hit $90.7 billion by 2031, registering a CAGR of 6.3% from 2022 to 2031.”
The nature of omnichannel supply chains is to provide integrated fulfillment and distribution channels to better serve customers than multichannel supply chains that are poorly integrated and coordinated. 
Freight brokers are critical in ensuring the highest levels of coordination and integration that translate into the omnichannel agility, responsiveness, and flexibility needed with consumers now at the center of supply chain management.
Let’s take a closer look at the strategies freight brokers use to optimize costs for shippers.
5 strategies freight brokers use to optimize costs for shippers
An experienced freight broker isn’t a cost center but a cost saver for shippers. Not only do shippers realize more resilient and efficient supply chains when using a freight broker, but the bottom line also improves.
Brokers use 5 strategies to save their shipper partners money.
Cost-savings through consolidation
To implement this strategy, the broker gains a comprehensive picture of the shipper’s current process through questioning to allow for leniency and time at pickup or delivery. A result of these questions is the determination of the potential to consolidate loads and share the costs with other shippers.
The broker will seek to understand the following:
  • The absolute last delivery day to adhere to.
  • If a critical pick-up date exists and is optimal for cost savings.
  • Whether it is possible to pair freight with other shippers to further cust costs.
Flexible mode shifting and capacity
Analyzing a shipment's characteristics, size, and urgency, the freight broker weighs the different transportation modes to find the lowest cost while meeting the delivery time frame. The broker will find the best fit whether it is LTL, FTL, air, partial truckload, or intermodal.
An example would be the broker finding a mode shift that saves money if the shipper can extend the delivery window.
Another example might be a broker recommendation that increases the amount of product on the truck, streamlining the shipment with instant capacity and reducing costs.
Single-source processes
A freight broker works as another branch of the business, eliminating the need to invest in a transportation department. Shippers make the most of their technology by utilizing a transportation management system (TMS) and the broker as their TMS expert.
With the TMS API, the broker ensures the shipper realizes maximum value from its system with informed efficiency, cost savings strategies, optimized visibility, and better vendor communication.
Optimized workflow and employee time
A freight broker provides tremendous cost savings by eliminating the need to hire an in-house carrier management department. Additionally, using software to track freight and communicate with supply chain partners reduces the time commitment of existing staff with an optimized workflow.
Invaluable visibility
The visibility and analytics provided by freight broker software results in shippers gaining control over their supply chains. Using their enhanced visibility and full knowledge of how their partners and supply chains have performed, shippers find new opportunities to reduce spending.
Freight Brokers Have Incredible Value
Freight brokers bring incredible value to shippers, negating the need for dedicated logistics departments, fostering the use of freight technology, and taking responsibility for hand-offs and meeting delivery commitments. Shippers save money, control their supply chains, and successfully transition to omnichannel distribution models that best serve customers.
A freight broker isn’t a cost center; they are a cost savings and efficiency boon for freight shippers looking for brokers.
Edge Logistics serves shippers with the industry-leading tech solution, Edge Capacity, giving them full visibility through real-time GPS tracking and push notifications. Along with their fully integrated API solution, Edge expert freight brokers manage their clients’ freight needs, providing contracting, pricing, financing, and insurance. Shippers’ freight is in capable hands throughout its entire journey.
Request a quote from Edge Logistics today to see how an expert freight broker brings your supply chain control and saves you money.

About the Author

Pamela Nebiu

Pamela Nebiu

Pamela is the Senior Marketing Manager at Edge Logistics. She has a Bachelors of Arts from DePaul University in Public Relations and Advertising with a minor in Photography. Pamela is responsible for overseeing advertising, marketing, press, and social media related to Edge.