Why More and More Brokers are Using Capacity Management



Jul 18, 2022

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It Helps Brokerages Scale

Sometimes, growing a business can become a chicken or the egg kind of question. How do you grow without investing a bunch of capital, and how do you invest a bunch of capital if you’re not yet poised for growth?

Capacity management’s process automation can help reps get more done in a day so brokerages can cover more loads with the staff they already have in-house while other Parade tools can help brokerages get better rates for their loads. By both earning more and saving more at the same time, scale can be achieved without a huge capital outlay.

Carrier Relationships are Becoming More of a Focus

As a part of their overall strategy, many brokerages are beginning to focus more on carrier relationships. Re-using carriers tends to be more cost-efficient and less frustrating, so by building up a stronger carrier network, brokerages are trying to keep more loads off load boards so they can provide better rates and better service to their shippers.

By building healthy, mutually beneficial carrier relationships, brokers are able to:

  • Utilize more of their carrier network’s capacity

  • Access bulk discounts to lower freight costs and improve gross margins

  • Keep loads off load boards

  • Improve their shippers’ experiences

Even if carrier relationship building isn’t high on a brokerage’s priority list, it likely will be soon. As more brokerages are including carrier relationship building in their strategy, other brokerages may need to work harder on it to remain competitive.

Consider what might happen if two brokerages are seeking capacity from the same carrier, but one of them has taken the time to establish a relationship with that carrier. The friendly broker likely wins out, or the broker who hasn’t established a relationship may wind up paying more.

It Works Through Flush and Lean Markets

Not long ago when there was more freight than anyone knew what to do with, capacity management made sense to a lot of brokers. It would help them get their loads covered and maybe even find a little extra capacity so they could take on more loads while they were readily available. However, the benefits of capacity management aren’t reserved for hot freight markets.

Capacity management’s role during leaner times might not be as defined, but it’s just as valuable. Cooler markets make for the perfect time to build up carrier networks to keep more loads off load boards. Capacity management tools can help brokers do just that, plus they can help brokers set fair rates and find wiggle room to improve margins.

Some Carriers Expect a More Tech-Rich Experience

Think about how the way we do basic things has changed in the past few years. We order our groceries and takeout over an app. We pay our bills online. Even sensitive government documents have been moved online since the pandemic shut down many government offices. Is it difficult to conceive that carriers might expect to be able to book freight online?

Digital booking and quoting tools are becoming more and more typical these days, but not every brokerage has a system in place to facilitate them. Parade’s capacity management can help.

Interested in learning more about how Parade’s capacity management solution can help your brokerage grow and scale while building better carrier relationships? Request a demo and our sales team will reach out to set up a meeting.

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