Scaling up as a freight broker

Reid Belew
March 22, 2023
Broker News
Broker

You made the first step – you’ve got your authority and you’re off the ground as a freight broker. You’re learning the ropes, expanding both your customer base and carrier network. What’s next? How do you keep the momentum going on your journey upward?

That’ll give us a good place to start our conversation on growing your business.

Scaling up is tricky. If you grow too fast, you run the risk of creating an unstable business, one that can’t handle rapid growth and will crash and burn – if you make too many business commitments, your resources will be spread far too thin. On the other hand, being overly slow to grow runs the risk of missing out on key growth opportunities that fly right by you.

At DAT, we advocate for methodical, thoughtful growth that is nimble enough to seize opportunities without growing too big, too fast, and imploding. Threading that needle is tricky. But we’re here to get you off the ground.

Today, we’ll talk a bit about finding new customers and carriers, delivering customer value, streamlining your processes and technology, and diversifying your brokerage. We’ll also introduce you to Peter Coratola Jr., founder of EASE Logistics, whose story of building a brokerage from the ground up is the perfect model of what we’re talking about. And for some reassurance, he had a lot of the same questions you probably do when he started, too. He says as much himself:

“I didn’t know all the systems needed to run a logistics company. I didn’t know DAT was something that we needed to have in the beginning, right? From a standpoint of building networks, engaging with carriers, and getting exposure, DAT leads that.”

Who are you working with?

As a freight broker, there are two essential ingredients in your success cocktail: carriers and customers (shippers).

At first, finding customers, unfortunately, has to be done the old-fashioned way – cold calling. You’ll find directories and databases online that will help you, and you can even set up Google Alerts for industry and company keywords so you can hear about new initiatives that may increase capacity demand, or new companies that will need carriers as they get off the ground. As you begin to make connections, don’t forget to leverage those connections into referrals (hint: servicing your customers goes a long way to helping you with word-of-mouth). It pays to be honest here – if you’re building a good relationship with a customer, ask them to share your contact information with others if they are happy with your service.

Finding carriers to move your customers’ freight is a different process. You’ll have to do a bit more vetting and background work before you onboard new carriers, and tools like DAT’s load board really come in handy here. You can post loads there and find trucks quickly. It’ll save you a headache or two, trust us. Plus, DAT’s load board comes with the DAT Directory, which makes finding trusted carriers a cinch.

Peter and EASE used DAT to grow their network too. “DAT allowed us to grow a network on the carrier side and get visibility,” he said. “DAT gave us an efficient way to grow our carrier network, to be able to service the opportunities that we’re getting from our customers.”

You’ve found carriers and customers – what now?

Speaking of methodical growth, this is a good place to exercise that. Instead of simply adding more and more and more customers, grow to a manageable size, then double down on customer service.

Spending time developing a relationship of reliability and trust is how you’ll get to the next phase of growth, so don’t skimp on it here. Do everything you can to make your customers happy, go above and beyond, and instead of only growing a business, grow a reputation. Because a good reputation can be flipped into future business. If your service is exemplary, word will get around. It may be slower growth than you like, but this is an important part of your journey.

Taking care of customers builds long-term relationships, and long-term relationships build stable business. That’s our goal here.

Think about it: if your customers like and trust you, they’ll pay for that instead of searching for cheaper, untested alternatives. Your trust, reliability, and thoughtfulness toward your customers can separate you from the pack. Don’t overlook it.

Okay, you’ve got a stable business. What’s next?

Now that your customers trust you, and you also trust your carrier network, it’s time to focus on operational efficiency.

At this point, your business may be running off spreadsheets to manage invoices, billing and payments, or customer prospecting. And that may be fine up until this point, but you’re about one intern’s typo away from that spreadsheet crashing. That’s no way to run a business.

Here, we really believe in the power of DAT Broker TMS. It’s a TMS (transportation management system) purpose-built for brokers, not a shipper solution that got a facelift. It may be helpful to think of this as a brokerage-in-a-box – a one-stop shop for running a business with everything you need in one place. We intentionally built it to streamline your business, so you’ll end up growing your business instead of your back office staff or another collection of filing cabinets against a wall.

While we’re talking about scaling and growing, DAT Broker TMS will grow with you. Instead of offering modules, integrations, and customizations in groups, we let you add on individual modules only as you need them – you won’t pay for features you don’t need.

All of your accounting, documentation, and tracking, along with the entire freight cycle starting from finding trucks to getting paid, lives inside the DAT Broker TMS. Once you’re streamlined and efficient, growing to that next level is far easier.

If you’re not quite ready to spring for a whole new TMS, that’s okay. We’ve got a host of tools to help you streamline your operations. No matter where you are in your brokerage journey, we have solutions to help.

EASE Logistics first used DAT as a load board, and not much else. But as they grew, so did their dependence on DAT.

“We talk about everything DAT does for EASE – the load board is so far down on the list.”

Stable, efficient, and profitable. Time to expand.

Now that you’re operating on solid ground, built on long-term partnerships and organizational efficiency, this is a good time to step out and tackle new areas of business. The stability you worked so hard to create actually fuels your expansion now.

Expansion can come in the form of new industries to service, new geographic areas, or new types of freight entirely. Tools like DAT iQ shine here – we take over $150B in annualized invoices and turn that into actionable market data. You’ll see the most profitable lanes, hot or cool markets, and insight into historical, current, and forecasted rates. It’s a 360-degree of the market that makes sure that your business’ expansion and diversification is informed and built on sound rationale.

Plus, we make it easy to understand the industry. As you’re growing, your understanding of logistics’ complexity will grow, too. Here’s our friend Peter again:

“I love how DAT provides data in the industry and makes it digestible. It gives us the ability to teach people coming in about data at a level that they can digest, but it’s not too overwhelming.”