Why brokers should prebook freight, even if they’re living off spot
By Jeff Hanson, Director of Business Development at FreightFriend
Jeff spent nearly a decade at a global 3PL managing one of the company’s top performing teams and overseeing some of its largest accounts. He is an expert in leadership and procurement strategies.
The freight market is a continuous cycle of supply and demand, and as a broker, you’re either knee deep in available capacity or scrambling to find a truck, depending on where our industry is on the curve.
But there are solutions to smoothing the transitions and dealing with uncertainties, such as prebooking freight. We’re big advocates, and here’s why.
The Summary (aka TL;DR)
The bottom line: Prebooking saves you time and money, no matter what the market throws at you.
The time you spend prebooking is time you're spending developing relationships with carriers. Once you start growing these relationships and developing a routing guide, you’ll need less time to cover a load, which not only improves efficiency but frees your team up to grow your business in other ways, whether it’s finding new clients, contracting freight, or choosing to cover more spot.
How Does Prebooking Impact Your Brokerage?
1. It’s about the information
By prebooking, you’re getting the right information from the carrier, which is the first step to stemming issues with your load.
2. Maintain negotiating power
On average, you’ll have better and more consistent rates by prebooking. When covering a same-day pickup, you lose a lot of negotiating power — and the carrier knows that!
3. Avoid late same-day assignments
By waiting too long to assign a carrier for pickup, you’re increasing the likelihood of sending in a driver that’s already late. As a broker, you can be responsible for detention at the pickup if you knowingly send in a late driver. If your driver can’t make up the lost hours of drive time, it’s up to you to reschedule the delivery appointment. Can’t reschedule for the same day? Add on a layover fee. Because of this domino effect, you’re now losing several hundred dollars on a load that could have been saved by prebooking.
4. It benefits your clients
Prebooking improves on-time service. This strengthens your relationships with your clients and ensures they feed more freight to you in the future.
5. It opens your team up to jump on spot freight when available
Because spot freight comes over with little lead time, it can take a lot of resources on your team to cover that freight. Prebooking enables you to take less time to cover a load and move it off your plate so that you can choose to go after spot, which typically is quoted higher and generates more profit. If you’re living off of spot, you might wonder, “Why should I prebook if I’m making more money this way?” The market might work in your favor today, but employing a prebooking strategy sets you up for success when spot isn’t available.
How Do I Start Prebooking More Freight?
Like many organizational changes, enforcing this methodology comes from top down. Employees aren’t going to change existing bad habits without example or incentive.
1. Set a goal
Start by setting a numeric goal internally and holding your carrier sourcing reps accountable. For example, if a rep is responsible for booking 15 loads per day, have them target 10 of those loads as prebooking.
2. Continue to encourage your team
The first few days or weeks might be difficult. The more work your team does today or tomorrow is less work they’ll have to do later.
The idea is: If you don’t get ahead, you’ll always be playing catch up. And you’ll be more vulnerable to rates that you didn’t expect.