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Brokers: Does It Matter How You Pay Your Carriers?

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Brokers: Does It Matter How You Pay Your Carriers?

A recent survey of Transportation Intermediaries Association members conducted by freight payment technology company TriumphPay revealed that roughly 90 percent of truck brokers do not have a web portal that allows carriers to view their payment status and manage their payment method.

That statistic spotlights the enormous marketing opportunity that exists for brokers looking to grow their truck carrier customer base. That's because making freight payments easy for trucking companies to collect is considered one of the best ways to build carrier loyalty.

In addition, brokers who neglect to invest in improving their carrier payment experience run the risk of being left behind and making it harder to retain carriers – putting them at a strategic disadvantage with their competitors.

"It's not just about getting payments out faster, it's about how and when carriers want to get paid," said TriumphPay President Jordan Graft. "If a broker can provide that type of transparency and visibility, that carrier is more likely to come back and work for that broker. We know that's the case after having made tens of thousands of carrier payments. Carriers value that visibility because it lets them see where their money is."

On top of that, surveys have also shown that loyal carriers can be five times more valuable to a broker's business than a so-called "one and done," simply because they're more familiar with how those brokers' systems and processes work.

"They don't have to re-verify the information around onboarding, and they know how to use the tracking system that the broker has in place – in addition to being familiar with how they get paid from that broker," said Graft.

Brokers should consider the following questions to determine whether their carrier pay program is likely to attract a loyal carrier base: 

  • Do you make it easy for carriers to submit paperwork?
  • How do carriers receive payment updates and invoice status?
  • How often are carriers calling about their payment by phone?

Brokers that use TriumphPay allow their carriers both reactive and proactive options for invoice and payment communications. The portal updates carriers when an invoice is approved for payment or when a payment goes out. Carriers also have the option of opening a chat discussion on TriumphPay's website, sending an email or picking up a phone. "Whatever way they want to interact with us – it's both push and pull," Graft says.

"We update carriers on payment information extremely infrequently – almost all of our carriers use TriumphPay's portal to get their payment information," said Will Kerr, President of Chicago, Illinois-based Edge Logistics. "It's a great thing, because it means I have less people on the phone and more people doing other work."

Kerr, who emphasizes that carrier retention is a core focus of his company, has found that carriers much prefer going to a web portal and seeing everything in front of them versus calling in to the accounting department and asking for help. "By making it easy and transparent, we've seen fewer billing issues, more accurate bill processing, and our carriers are turning paperwork around a lot faster."

Another way that TriumphPay helps Kerr build and keep his carrier base is the ease with which the company's technology allows carriers to use "QuickPay" payment programs, he said.

"In years past, a carrier's QuickPay information would have to be manually entered during the onboarding process. Now, it's all done automatically. It makes QuickPay a way more viable option for carriers."

Since partnering with TriumphPay, the QuickPay utilization rate for Edge Logistics has increased from 5 to 8 percent to more than 20 percent, according to Kerr.

Omar Singh, president and founder of Jacksonville, Florida-based Surge Transportation, agrees that carrier loyalty can "absolutely" be developed by making it easy for carriers to get paid. "It's one of the things we try to sell on," Singh tells FreightWaves.

For example, when going out to recruit carriers, "we tell them that if they pick up a [contract] lane, then we put them in a preferred program and waive the QuickPay fee – and pay them the same day to keep their cash moving," Singh said. "It's a big deal to them when we say we want them to move $10,000 of freight for us every week and pay them the day they deliver."

A TriumphPay broker that operates heavily in the consumer-packaged goods market, Surge Transportation's business is roughly half short-term spot loads, half repeat contract business.

"The only way to really grow by 5,000 to 10,000 to 50,000 shipments a year is by having carriers staying in your network continually," Singh says, "either picking up a whole lane or just wanting to round-trip freight."

Image Sourced from Pixabay

Posted-In: Freight freight brokerage Freightwaves Logistics Supply ChainNews Markets General

 

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