Transforming Supply Chain

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Breaking The Cycle Of Wild Swings In Freight Brokerage

As a freight brokerage, you know all too well the challenges that come with wild swings in the market. The temptation is to focus solely on the shipper and revenue, which can lead to a reactive mindset that hinders your ability to plan proactively. However, breaking the cycle of wild swings in brokerage is not impossible. With the right approach and mindset, you can establish a better foundation for your business and thrive in any market condition.

  1. Don’t neglect your carriers

    One of the most important things to remember is that as an intermediary, you have two sides of the business to engage with: the carrier and the customer. Many freight brokerage companies tend to focus solely on the shipper, neglecting the carrier side of the business. This narrow focus can lead to missed opportunities and a lack of balance in your business model.
  2. Invest in proactive strategic planning

    Use slow market periods to invest in capabilities that are lacking and to build a better foundation for your business. Don't fall into the trap of chasing markets and being reactive from a planning perspective. Instead, invest in strategic planning and take a retrospective look at your business during the last up-cycle. Charter the values that you are going to stick to, regardless of market cycle. Keep in mind that your competitors are experiencing the same market. Meaning if you continue to invest while others are cutting back, you are on track to come out ahead.
  3. Revisit your tech strategy

    Yes, TMS is important, but your overarching strategy includes more. What tools are helping you with data? What tools are helping you use your data in actionable ways? Are you making the most of APIs? Have you moved away from inflexible, monolithic architecture to cloud-based software? Is your tech making your employee’s lives easier? Is your tech contributing to your company’s larger business goals?Stuck on Legacy Systems - Floppy Disk
  4. Prioritize training & development

    One common mistake that brokers make is hiring when the market is strong to support growth, but neglecting training and development. This leads to a lack of foundational skills and does not support a long-term approach. We often hear leaders complain about onramp times that are too long for new hires and the frustration in employees that are not performing to expectations. What is the solution that many of these same leaders refuse to invest in? Training and development. A healthy training program improves employee retention, boosts morale, and promotes a strong company culture.
  5. Don’t be fooled by vanity metrics

    Another mistake is relying on vanity metrics. Beware of data that sounds good at face value, but in greater context doesn’t shine as bright. For example, if you’re excited about an increase in new customers, make sure to take a closer look to understand whether these are new single time customers, or if they show long-term promise as repeat customers. If you’re celebrating revenue growth, that’s great, but you still need to compare that growth to your peers. If your competitors in the same market, of the same size and segment are experiencing greater growth, the truth is you’re losing.
  6. Identify areas of your P&L that are broken and take corrective action

    Begin with a detailed review of your P&L to understand your cost to serve, and find areas where you may be consistently overspending or underperforming. Compare your financial performance to industry peers and competitors. Where are you lagging? Analyze your cost-to-serve to identify where your company can reduce costs without compromising quality or service. For example, you could renegotiate contracts or outsource non-core functions. Look for opportunities for revenue growth by analyzing customer behavior, identifying new needs in the market, or improving your product or service offerings.  In order to do this most efficiently, focus on tools that help you with data analysis and insights, and don’t shy away from expert advice. 
  7. Update your value proposition

    For example, in our current market downturn, capacity is no longer king. So for now, focus on adding value beyond service and communication and low rates. Consider adding value in ways such as emissions reduction, QBRs, and bringing insights and data around the market and performance.

In conclusion, don’t let a market swing derail your success. Take action now to position yourself for long-term success. Remember, the key to success, no matter the market, lies in investing in your people, your technology, and your strategy. 

Need help staying competitive in this turbulent market? We'd love to chat. Get in touch with us here.

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The Metafora Team of Transportation & Logistics Industry Experts includes, but is not limited to, these phenomenal humans:

  • Peter Rentschler
  • Ryan Schreiber
  • Steven Godfrey
  • Derek Netelenbos
  • Adam Perlmutter
  • Andrea Pelczar
  • Joel Bennett
  • Joe Laskey



Metafora is the leading consulting & software development firm for transportation, logistics, and supply chain businesses. Metafora partners with carriers, shippers, and freight tech vendors to help you optimize your business and build software to fuel their growth. Welcome to the new way forward. Welcome to Metafora.

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