Why Should Freight Brokerages Consider an Investment in Capacity Management?

5 Reasons Freight Brokerages Should Consider Capacity Management

1. Capacity Management Can Improve the Bottom Line

Above all, business decisions like adding a new piece of software (in this case a capacity management solution) are about ROI and earning potential. Capacity management solutions can offer that in several different ways. Some of those include:

• Higher margins on loads due to better planning and better carrier relationships

• More loads covered equal more overall revenue

• Time savings for a more productive staff and lower overhead

• Reduced onboarding costs

• The ability to plan ahead keeps loads off the spot market, securing lower rates from carrier partners instead

Because of all these different ways capacity management solutions can help attain ROI, benefits that aren’t directly and immediately attributed to cost savings or higher revenues might be overlooked, but they shouldn’t be. Things like improved level of service, employees that are happier because they’re able to be more successful, and carriers that are willing to work with you shouldn’t be discounted when you’re looking at these programs’ ability to improve the bottom line.

2. It Helps Brokers Build Stronger Relationships with Carriers

When reps aren’t so absorbed in getting the next load covered, they have time to actually engage with carrier reps in a meaningful way. They can go beyond, “Can you cover this load?” and instead ask, “Where will you have capacity available next week?” or “How’s the farm doing?” They can build bonds with their counterparts at carriers, and that can result in a more mutually beneficial business relationship.

Also, the searchable carrier data stored in capacity management programs can help eliminate tribal knowledge on the floor. This gives all reps access to the same information, so they all have the tools they need to succeed and provide carriers with a great experience, whether they’ve worked with them in the past or not. This broad dissemination of traditionally siloed knowledge insulates brokerages from lost business or carrier relationships if the rep who holds the knowledge moves on or even just takes a vacation.

3. Capacity Management Can Help You Build Your Carrier Network

It’s a rare freight broker, indeed, that aims to book all their loads via load boards. Most brokerages see the money savings (and money earned) potential in using carriers you’ve already built relationships with. Relationship carriers may offer favorable contracted rates or go out of their way to make sure a load gets covered.

Through partnerships with load boards and other types of capacity networks, capacity management tools can help brokerages broaden their horizons and tap into new capacity. Once engagement has occurred, that capacity potential remains in the system for use down the road.

4. Automation Helps Brokerages Scale

Most capacity management solutions automate at least some of the processes that freight brokers use to conduct their business. By cutting out some of the busy work, reps have more time to focus on other things like covering more loads and building deeper carrier relationships.

Automation and the time saved due to it aside, improved margins and higher revenues can give brokerages the capital they need to build their business, investing in new technology and hiring new staff members to build out departments or add entirely new ones.

5. It Makes Carrier Re-Use Easier

Without some kind of a system in place, carrier re-use can be very difficult. Even when a brokerage finds a great carrier who they’d love to work with regularly, getting their loads in front of that carrier isn’t a simple prospect, and keeping track of thousands of carriers who have run loads in the past can be very difficult.

A capacity management solution can help brokers easily get their loads in front of those past carriers so they can use them again, saving onboarding costs and improving level of service. Parade’s Smart Rules feature allows brokers to tell the system which loads to send to which carriers automatically, showing those preferred carriers loads with zero time investment once the rule is set.