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Key Expectations of Top Third-Party Logistics Brokers

Joseph McDevitt • Apr 06, 2023

Learn the top 5 service expectations that a top third-party logistics (3PL) broker must offer to ensure client satisfaction and build long-term relationships.

Third-Party Logistics (3PL) brokers play an important role in the supply chain industry, helping companies find the most efficient and cost-effective ways to transport their goods. However, becoming a top 3PL broker requires meeting certain legal requirements and industry standards. In this article, we'll explore the top 5 legal requirements to be a top 3PL broker:

  • 1. Licensing:

    In order to legally operate as a 3PL broker, you must obtain a federal motor carrier (MC) number from the Federal Motor Carrier Safety Administration (FMCSA). 


    You may also need to obtain additional licenses or permits depending on the types of services you offer and the states in which you operate.

  • 2. Insurance:

    You must ensure carriers have appropriate cargo insurance coverage to protect your clients' cargo in case of damage or loss. The amount and type of insurance required may vary depending on the types of goods you transport and the regulations in your state. Offering additional insurance coverage to clients, upon request, in the event of routing high value freight is a core service expectation.

  • 3. Financial Responsibility:

    In order to obtain and maintain your MC number, you must demonstrate financial responsibility to the FMCSA. This includes maintaining minimum levels of insurance coverage, as well as having a surety bond or trust fund in place to cover any potential claims against your business.

  • 4. Compliance:

    3PL brokers must comply with a wide range of regulations and requirements related to transportation, safety, and security. This includes adhering to hours of service rules, maintaining driver logs, and ensuring that all vehicles are properly maintained and inspected.

  • 5. Industry Standards:

    Finally, in order to be a top 3PL broker, you must meet industry standards for service quality, reliability, and professionalism. This includes maintaining open and transparent communication with your clients, providing accurate and timely information about shipments, and continually seeking to improve your services and processes.

By meeting these legal requirements and industry standards, you can position yourself as a top 3PL broker, trusted by clients to provide reliable and efficient transportation solutions.

 

Third-Party Logistics (3PL) brokers are responsible for providing transportation and logistics solutions to clients. In order to be successful, 3PL brokers must meet certain service expectations to ensure that clients are satisfied with their services. Here are the top 5 service expectations that a 3PL broker needs to offer clients:

  • 1. Reliability:

    Clients expect their shipments to arrive on time and in good condition. A top 3PL broker, orffering LSP services must be reliable and ensure that all shipments are transported safely and efficiently, while keeping clients informed about the status of their shipments.

  • 2. Flexibility:

    Clients' transportation needs can change quickly, and a top 3PL broker must be able to adapt to these changes. This includes offering a variety of transportation options and being able to adjust routes or schedules as needed.

  • 3. Transparency:

    Clients expect clear and accurate information about their shipments, including tracking and delivery updates. A top 3PL broker must be transparent and provide regular communication to clients throughout the transportation process.

  • 4. Competitive Pricing:

    Clients want to receive the best possible transportation services at a fair market price. 


    A top 3PL broker must offer competitive pricing and be able to negotiate rates with carriers to ensure that clients get the best value for their money.

  • 5. Expertise:

    Clients expect 3PL brokers to have the expertise and knowledge necessary to navigate the complexities of the transportation industry. A top 3PL broker must have a deep understanding of transportation regulations, carrier networks, and logistics technologies to provide the best possible service to clients.

By meeting these service expectations, a 3PL broker can establish a reputation as a reliable and trustworthy partner for clients, and build long-term relationships that lead to ongoing business and referrals.


Why should shippers partner with a logistics broker?

The reasons shippers should consider partnering with a 3PL logistics broker, include cost savings, expertise, and improved customer service.


In today's highly competitive business environment, shippers are always looking for ways to optimize their supply chain operations while simultaneously reducing costs. One strategy that has gained popularity in recent years is partnering with a third-party logistics (3PL) broker to route all your different modes of transportation, and various equipment type needs. Here are eight compelling reasons why shippers should consider partnering with a 3PL broker for their logistics needs:


1.   Cost Savings: One of the most significant benefits of partnering with a 3PL broker is cost savings. 3PLs have established relationships with carriers, which enables them to negotiate better rates on behalf of their clients. Additionally, by outsourcing logistics to a 3PL, shippers can reduce overhead costs associated with staffing and managing an in-house logistics team.

2.   Access to Technology: 3PLs invest heavily in TMS technology to streamline their operations and provide real-time visibility into the supply chain. By partnering with a 3PL, shippers gain access to this technology without having to invest in it themselves, which can lead to improved efficiency and cost savings.

3.   Scalability: Shippers often face fluctuations in demand, which can be challenging to manage. 3PLs can help shippers scale their logistics operations up or down as needed to meet changing demand levels. This allows shippers to be more responsive to their customers' needs and avoid the costs associated with maintaining excess capacity during slow periods.

4.   Expertise: 3PLs are logistics experts who bring a wealth of knowledge and experience to the table. They have deep knowledge of carrier operations, shipping regulations, and best practices for optimizing supply chain operations. By partnering with a 3PL, shippers can tap into this expertise and benefit from their knowledge and experience.

5.   Risk Management: Logistics operations are inherently risky, with numerous potential points of failure that can disrupt the supply chain. 3PLs have processes and procedures in place to mitigate these risks, which can help shippers avoid costly disruptions to their operations.

6.   Focus on Core Competencies: By outsourcing logistics to a 3PL, shippers can focus on their core competencies and strategic objectives. This allows them to allocate resources more effectively and improve their overall business performance.

7.   Increased Flexibility: 3PLs offer shippers more flexibility than they would have if they managed logistics in-house. For example, 3PLs can offer different shipping options, including expedited or specialized shipping, to meet unique customer requirements.

8.   Improved Customer Service: Finally, partnering with a 3PL can improve the customer experience. By leveraging the 3PL's expertise and technology, shippers can improve delivery times, reduce order errors, and provide customers with real-time updates on their shipments.


In conclusion, partnering with a 3PL broker can provide numerous benefits to shippers, including cost savings, access to technology, scalability, expertise, risk management, focus on core competencies, increased flexibility, and improved customer service. As supply chain operations become increasingly complex and competitive, shippers must consider all available options to optimize their logistics operations and improve their overall business performance.




Interested in 3PL Brokerage Services? Download a transportation case study today!

TLI Insights


For the latest insights, tips and commentary surrounding the logistics industry, look no further. Shippers will find thoughts from the award-winning team at Translogistics covering everything related to your transportation processes and plans. If you have a question we are readily available at insidesales@tli.email 

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