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Lane profitability is a moving target for freight brokers and third-party logistics (3PL) providers with a narrow strike zone of about 15 percent net margin.
3PLs often miss this mark when covering loads with new carriers by going through load boards and using systems that require manual activities such as sending emails, making phone calls, and completing the onboarding process.
Doing business with repeat carriers who are loyal and engaged is the key to 3PL profitability. Companies must leverage carrier relationships and technology to book loads faster and more efficiently.
Set your sights on profitability
3PLs with strong carrier relationships and a digitized booking process generally begin workdays with 75 percent of their orders pre-booked. Covering the remaining 25 percent of orders each day is where most time and resources will be spent by making phone calls and emails to repeat and to new carriers who are not as digitally connected.
The extra communications, labor and overhead quickly erodes profit margins.
For a detailed breakdown of the cost of doing business with a repeat carrier versus a new carrier, see this helpful infographic.
Hit your mark with fast payments
Giving carriers a seamless experience for booking orders and paying invoices is an effective strategy to build a loyal and engaged network to procure capacity faster and more profitably.
Transflo, the trucking and logistics industry’s largest document processor, is now offering 3PLs a fast payment option for their carriers by teaming up with U.S. Bank, the industry’s largest payment processor.
With Transflo Quick Pay, a 3PL can give their carriers the option to enter a web portal and select which loads they wish to fund at a low cost of 1.25 percent of invoice.