MISSISSAUGA, Ont. — After selling MSM Transportation to Wheels Group last year, Mike McCarron joined Wheels to oversee mergers and acquisitions in a bid to consolidate the Canadian 3PL space.
To gain a greater understanding of where the freight brokering segment is headed, McCarron called together several leading brokers for a roundtable this week, hosted at Wheels Group’s headquarters. Also on-hand was Level5 Strategy Group, which will be compiling a white paper on the subject. CTL.ca was invited to report on the discussion and will be publishing a three-part series this week.
The participants included:
Manny Speranza, FBI-Freight
John Tittel, Hot Freight International
John Flaherty, HTS Freight Logistics
Ian MacDonald, ShipNorthAmerica Transportation
Larry Cox, Polaris Transport Group
Eric Carusi, Transpro Freight Systems
On the outlook for freight brokers
Each of the brokers who participated in the discussion agreed on one thing: That it’s a great time to be a freight broker.
“These are exciting times. The business has never been better,” said Speranza. However, he noted many freight brokers will fail if they don’t keep their fingers on the pulse of the industry. But companies that adapt to the changing needs of their customers will thrive, he added.
Transpro’s Carusi agreed. “The growth is definitely there,” he said. “There is tons of opportunity there, but you need to understand (your customers’) problems and be proactive with solutions.”
“I think the market and the future looks good for brokers of all sizes,” added Flaherty. “I think being as proactive as you can be is always going to be important.”
MacDonald noted there are many carriers relying on freight brokers to fill trucks. “Without those carriers, we’d obviously be nowhere,” he acknowledged.
“There is always going to be opportunities for brokers in our industry,” Tittel said. With so much consolidation in the trucking industry, Tittel said freight brokers can act “almost like a guide” for shippers, familiarizing them with new entrants and keeping them apprised of the changing landscape.
However, Speranza was quick to point out freight brokers can’t rest on their laurels.
“If people don’t change, they’re going to be out of business in the next five years,” he warned. He said freight brokers should not focus on transactional selling, and instead offer a specialized service focused on adding value.
“Our business is transitioning to A-list customers looking for more of a boutique 3PL sell,” he said. “Selling freight on the phone every day and bidding on skids is not going to last here. It’s not going to work. Yes, there’s a market for that, but if you’re not growing, you’re falling behind.”
He said freight brokers that aren’t putting an action plan in place to reinvent themselves will not last.
“There’s a lot of business out there, but brokerages need to look at the value they’re actually providing to the client,” he said. “It needs to be more than ‘I can move those skids, here’s my price’.”
On building and maintaining relationships
Strong relationships will continue to be the foundation for success in the freight brokerage industry, experts agreed, but how those relationships are initiated and maintained is evolving. Face-to-face contact is being replaced with phone and e-mail communication, and monthly maintenance calls with customers are being done more like twice a year, MacDonald said.
Still, the freight brokers taking part in the discussion all agreed human relationships can’t be replaced with technology and that every freight broker should know who they’re dealing with.
Speranza suggested brokers meet with their top 20 carriers and build relationships with them. “You get better service that way,” he said. “Your customer is not just your client.”
Flaherty agreed with the need to develop strong relationships with carriers. “As brokers, we’re only as good as the service we get from the carriers,” he said.
Freight brokers participating in the discussion agreed technology is a useful tool to do away with nuisance calls (ie. “Did you get that fax I sent?) but that a human connection is still required.
“If it’s machine talking to machine, the business dies,” said Carusi.
MacDonald agreed. “If relationships and service from a personal standpoint weren’t important, then the whole business would be automated.”
“There are services like that and they haven’t done well,” Tittel added.
“Technology is a tool,” Flaherty said. “It’s an excellent tool that helps build relationships. We still need to talk with our customers and talk with our carriers.”
Successful freight brokers must also find a way to effectively communicate and build relationships with people of various ethnic backgrounds. It’s not just a middle-aged white guy’s world anymore, they acknowledged.
“You have to deal with people (from different cultures) on a different level,” Speranza said. “In the past we’d go to a hockey game or a ball game. Not everyone wants to do that, but that doesn’t mean they don’t have other things they’d like to do. Repect has got to be number one. You show them respect, they’ll show you respect.”
– Part 2 of this series will examine the sales evolution and the importance of technology.