There several reasons utilizing freight brokers, so I will list the largest reason such as added capacity, minimized costs, control over liability, flexibility over transportation costs, and save time.
• Working with a broker instantly boost capacity. Depending on the size of the freight broker, they may work anywhere from one thousand to over fifty thousand carriers. This kind of capacity increases the chances that the freight broker can provide truckload capacity for 20-40% less costly than, if you’re asking your current providers that are not brokers. Either way, compare the rates between the freight broker and your providers. That’s how you minimize costs.
• Brokers work with thousands of carriers to call upon to negotiate pricing therefore has more flexibility on its pricing.
• Brokers will save you time, by utilizing a broker it gives you access hundreds of available trucks within minutes.
• Shippers can gain more control over the amount of liability it can require from a freight broker. In 2011, now over half of the states in the USA have passed “Anti-Indemnity Laws.”
Shippers that require its transportation providers to hold shipper harmless from any and all losses. regardless whom is negligent. Anti-indemnity law protects motor carriers (not freight brokers-3pls in most states) and will void the contract as its against public policy for shippers to require the motor carrier to hold shipper harmless from any and all losses by the shipper or not. The purpose of the Anti-Indemnity is to shift the 100% liability from the motor-carrier to balance the liability.
OMAHA, Neb.- BAT Logistics, provider of 3rd Party Logistics and Transportation solutions, finishes 2010 with revenues up 43% over 2009.
OMAHA, Neb.– July 2, 2011 – Shippers should be aware of the Anti-Indemnity Laws that may have already been passed in their own state.
Shippers require their transportation providers to hold them harmless from any and all losses regardless of who’s at fault. The passing of the Anti-indemnity Law means indemnity agreements in motor carrier contracts are against state public policy and, therefore, void. That puts the balance of liability back to shippers doing business with motor carriers directly.
However, the Anti-Indemnity Law does not pertain to shippers contracting with 3pls/freight brokers. This could mean more business for 3pls/freight brokers, but at how much risk to themselves?