LOGISTICS MANAGEMENT FOR BROKERS: IF YOU CAN’T DIFFERENTIATE YOURSELF FROM THE COMPETITION, EFFICIENCY IS CRITICAL
We’ve been on a bit of an efficiency kick lately — it’s a topic that constantly comes up around our office as we consider how to perfect logistics management for brokers and how to help them become as lean as possible.
You see, in the brokerage industry, lean is the name of the game.
Fortunately or unfortunately, many people view what brokers do as a commodity. Now, that may not sound so bad, but I’m using a very specific definition of that term:
A commodity is a product or service that can be bought from anyone, because the product doesn’t change from supplier to supplier.
Now that may sound good to the customer, but that’s bad for brokers.
Whenever something is viewed as a commodity, the industry that creates that product or service suffers, and eventually, the customer suffers too, because quality goes down the drain.
THE PROBLEM WITH BEING A COMMODITY
Take steel. There was a time in this country when steel was one of our greatest points of national pride. American steel was the best steel you could buy, period.
Then, other countries jumped on the steel train, so to speak. Not having the infrastructure or experience that we had, they obviously weren’t just going to start out making incredible steel. So their steel was lower in quality.
Which meant they could sell it cheaper.
Now, a discerning customer can tell the difference between high and low quality steel, but at that time, all steel was viewed as a commodity — it’s all relatively the same.
So, they bought the steel that cost the least — because it doesn’t matter, right? And the American steel industry took a hit (and never really recovered) because all that additional value American steel held, the sheer quality of our steel, was not being seen.
CAREFUL LOGISTICS MANAGEMENT, FOR BROKERS, IS CRITICAL BECAUSE OF HOW THE SERVICE IS VIEWED
Now, I want to make something very clear — you don’t have to be viewed as a commodity.
If you can provide a superior service, if you can make it clear to your clients and your truckers alike that you’re not like the other guys, that you’re different, that you’re the go-to broker when things are tough, that you’re trustworthy and easy to work with and maybe even a little fun…
If you can do that, you don’t have to spend quite so much time worrying about extreme efficiency.
However, getting to that point takes time, hard work, and a dedication to building and maintaining relationships on both sides of the business.
That being said, no matter if you’re an industry veteran or just taking your first steps into the business, you can benefit from increased efficiency.
The more efficient you are, the higher your profits. One of the keys to logistics management, for brokers just starting out and for brokers who’ve been doing this a while, is efficiency. A TMS can do that, but there are other ways to increase your efficiency as well.
What you really need to do is take the time to look at your logistics management processes. Ask yourself the tough question: Are we being as efficient as possible?
If you’re not, a TMS is an excellent place to start.
And once you’ve become as efficient as possible, you can start thinking about differentiating yourself from the competition, getting out of commodity land, and getting to a point where efficiency isn’t the ONLY way to turn a profit.
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