As freight brokers, we are the link between our customers and the transit of their goods. Properly vetting motor carriers is a critical responsibility and we walk you through the steps.
Ever wondered about the operations and structures of major players in the industry like TQL, CH Robinson, and Echo? This week, we are diving deep into their world, offering insights on their sales strategies, business structures, and discussing the pros and cons associated with them.
The Giants of the Industry: TQL, Echo, CH Robinson
These industry heavyweights share common sales strategies with some key differences in their structural organization. They all aim for high volumes of loads at the lowest possible cost. TQL, for instance, is seen as one of the pricier brokers, justifying their increased cost through excellent service. On the other hand, CH Robinson is renowned for offering dirt cheap rates, often resulting in customers accepting somewhat inferior service for significant discounts.
Business Structures: Cradle-to-Grave vs. Pod Model
Different brokerage models are followed in the industry. TQL and Integrity Express, among the larger freight brokers, adopt a “cradle-to-grave” model, common in smaller freight brokerages. Here, each broker is responsible for every task in the process, from hunting leads to ensuring that their customer pays the bill.
Conversely, companies like CH Robinson, Echo, and XPO employ the “pod” model. In this model, the sales reps handle the lead generation and client acquisition, while a dedicated department manages the carrier side of the business, including sourcing, negotiating, and tracking.
Pros and Cons of the Cradle-to-Grave Model
One significant advantage of the cradle-to-grave model is the complete control it offers over the service provided to the customer. However, scaling up this model is challenging. While the model allows for the growth of your team as you add more customers and business, such growth often has to be sustained for a period before you’re allowed to hire a new team member.
The Pod Model: A Closer Look
While the pod model may seem attractive to sales reps due to fewer responsibilities, it usually results in smaller commission percentages. However, the model provides more time for prospecting and sales tasks, making it an excellent fit for those who enjoy customer interaction but aren’t as comfortable with organizational details.
Big Company vs. Small Brokerage vs. DIY: What Works For You?
Each of the large companies’ operation methods has its advantages and disadvantages. Typically, you might earn less on each transaction but leverage the company’s size to do more volume. Therefore, your decision to work with a big box broker, a smaller brokerage, or open your own freight brokerage will depend on your career aspirations and personal strengths and weaknesses.
If you’re the type of person who loves handling everything and are willing to keep as much of the profits as possible, you’re likely a fit to start your own freight brokerage. If that’s the case, do visit our website. Our Freight Broker Course- Freight Broker Basics provides all the knowledge you need to establish a successful freight brokerage.