When negotiating with freight brokers, you need to be prepared for some give and take on your contracts. Both you and the freight broker you are speaking to are trying to come out profitable. However, a good negotiation means that neither side is 100 percent satisfied with everything agreed. If you follow these simple tips, you will hone your negotiation skills, build better relationships with your freight brokers, and through healthy agreements, improve your cash flow to keep your operation rolling and continuously upgrading your earnings.
Network Often (Digitally & In-Person)
Others in the industry need to see you networking as often as you see them. Make yourself known and focus on building a real connection with everyone, especially the freight brokers. You never know when a personal anecdote can help you negotiate a better contract or a long-term work agreement.
Offer Them Enticing Payment Terms
Not many carriers can afford to offer their clients payment terms, as freight is a business that requires high cash flow; however, your brokers may need more time, 30 days or more, to make the payments of their loads, due to the general conditions of each business. Offering them this benefit will undoubtedly improve your ability to raise your rate and attract the attention of potential new customers.
And you can do it without affecting your cash flow. All you need is an ideal funding service that allows you to get the payments from your load invoices quickly, easily, and safely while allowing your brokers to pay on the negotiated terms.
At Summar, we are the freight factoring experts that your company needs to improve your relationships with your brokers. Our tailor-made factoring programs will allow you to have your invoices with payment terms paid in a matter of hours. Thus, your client will feel safe and will count on you with better rates for you, allowing you even to recover the fee you pay to your factoring company for this service.
Provide High-Quality Service Guarantees
It would help if you always mentioned your high-quality service guarantee. However, you want to do more than making the statement. You should have a history of providing the best services and plans to continue delivering such quality. Freight brokers do not want to deal with mediocre services, so always focus on explaining your high-quality guarantee and following through with your promises.
Set Competitive Prices
You need to understand how pricing works for similar jobs. You do not want to highball or lowball these prices, as this could be an indicator you are not well versed in currency industry standards. You must be clear about your costs, depreciation of your fleet, gas prices, wear and tear on the vehicle, and any additional unforeseen events. Your pricing must be inclusive of the best and worst possible scenario for the job.
You need to cover your costs and make a profit if there is a delay due to an accident or down vehicle. However, you also do not want to charge the same amount as the rest of the competition. Whenever possible, be as competitive with your pricing while negotiating with your freight broker. It will improve your odds of winning the contract. To easily keep track of the costs you assume for each load, you must determine the cost per mile of your operation.
Understand How to Make Agreements That Benefit All Parties
Negotiation requires give-and-take from both parties. However, your freight broker is far less likely to give up as much as you think. Walk into the negotiation with some idea of how you can make suggestions that benefit all parties. It may mean you take a small hit on your profit, or you need to throw in an LTT specification into the contract to win. Always have some ideas in the back of your mind that you know you can afford to offer to sweeten the deal.
Never Start With Your Lowest Number
The worst way to negotiate is to come in at the absolute lowest number you can take to make a profit. If you do that once, your freight broker will always have that card to play against you. Instead, start high and work your way down to your lowest number. You may find that a number in the middle is something that the freight broker will accept. That helps improve your profits and lets your freight broker know there is an opportunity to have a conversation that makes the deal beneficial for everyone involved.
When In Doubt, Trust Summar
These simple tips will help improve your negotiation with freight brokers. Thus, you can raise your performance by achieving better rates in any load. However, it is critical to remember that the challenge of being competitive in an aggressive market includes having a healthy cash flow that allows you to take on each new step needed to wow your customers. So that yours does not stop going as it should count on Summar as your factoring partner to keep growing in any scenario! Apply now and learn more about us.