Why the Traditional Freight Brokerage Model Is Broken

Bypass the traditional brokerage model that prioritizes broker profits over fast deliveries and reduced total cost of ownership (TCO) and switch to a better way.

The traditional brokerage model is built around commissioned, siloed teams who have little incentive to prevent late deliveries, penalties and fines and higher shipping costs. A brokerage partner with a strategic, commission-free approach that uses the latest technology and process improvements instead is an option with improved performance and reduced TCO for you.

Here are three reasons the traditional brokerage model is failing CPGs and retailers:

1. Questionable Commission Structures & Unreliable Service

In the traditional brokerage model, employees are incentivized based on maximizing the profitability of each load, whereas the LiVe Team is focused on providing you with the best quality service and your overall total success.

Because prices go up throughout the day, we prioritize your freight based on your requirements while trying to get you the lowest rate instead of trying to generate the highest commission.

As a result, freight brokerage customers often experience:

  • Higher freight charges
  • Poor communication and delayed pickups
  • Delayed deliveries without warning
  • Rejected loads
  • Retailer fines and penalties

2. Overworked, Underpaid Employees

The traditional brokerage model is built around the goal of keeping wages low and profits high. Employees are lured in with promises of high commissions and hired in bunches. They sign non-compete agreements so they can’t take clients with them when they become unhappy and leave. They’re grouped into teams and earn commissions based on the team’s performance so if anyone loses money on a shipment, everyone’s commission is affected. Many do not take vacations and find themselves working all the time.

It’s not surprising that so many employees burn out and leave after a year or two. Left behind, their clients become house accounts for the brokerage and the cycle continues.

This setup creates an incentive for the ownership to accept high employee turnover, which degrades quality of service.

3. A Linear, Transactional Approach

Traditional brokers use a linear approach that doesn’t add value. The sales team runs everything from booking freight to hiring carriers. They’re focused on maximizing their commission instead of getting your shipments delivered on time for the lowest TCO. They’re not going to forgo a larger commission to get your deliveries made faster, particularly on smaller/more challenging shipments. Their model of a “team” doesn’t make use of data scientists, predictive analytics, business intelligence or the latest technology for maximizing supply chain visibility and identifying freight imbalances. They’re not focused on continuous process improvements or things like Kaizen principles.

Different by Design

At LiVE, our team members are salaried, industry veterans who work on cross-functional teams and receive ample time off. Our business model is built around giving every project equal attention – regardless of load size – and helping our clients achieve the fastest deliveries for the lowest TCO.

We serve CPGs and retailers alike with special expertise in shipping food and beverage, electronics, paper, building materials, healthcare, and PPE products.

Delivery options:

  • Full truckload (FTL)
  • Less-than-truckload (LTL)
  • Shared truckload (STL)
  • Multi-stop delivery
  • Drop trailer
  • Box truck
  • Sprinter van
  • Flatbed

Specialty services:

  • Removable gooseneck (RGN)
  • Step deck
  • Rail yard drayage
  • Rail intermodal

Avoid the pitfalls of the traditional brokerage model by getting in touch with us today. Give our system a try on your next shipment and you will see for yourself how our approach can work for you.

Contact us to learn more about freight and truck broker services