By Jordan Graft, EVP of Payment Solutions at TriumphPay
Last year, all we could talk about was carrier capacity. While the market has cooled somewhat in the previous three months, developing a loyal carrier network should remain a priority for all brokers because inevitably market forces will swing back the other way. We work with lots of brokers across all sizes and know that a significant percentage of a broker’s carrier base, up to 90 percent in some cases, is only used for covering one to two loads per year. The cost of turning over your carrier base can add up quickly. Now is the time to start building carrier loyalty instead of just covering loads.
Carrier Churn is Costing You Money
Brokers often overlook the expense of high carrier churn as a cost of doing business and because it’s difficult to estimate its true total impact. The total cost of carrier churn is more than just the out-of-pocket expense to onboard a carrier. One-and-done carriers are (1) not familiar with your booking and tracking processes, (2) more price sensitive than your core carriers and (3) unaccustomed to billing requirements including getting approvals for accessorials. All these inefficiencies mean your team spends more time working loads with one-and-done carriers which hurts your margin and scalability.
Looking at the asset side of the industry, we know carriers are finding it increasingly difficult to recruit and retain drivers as well. With the high demand of 2018, drivers are in stronger a position to be more selective about their opportunities. As a result, carriers are taking notice and investing more time and money toward improving the experience of their drivers as part of an effort to retain them. These improvements include better pay rates, more payment options, and better technology. How can brokers follow suit and improve loyalty among their one-and-done carriers?
Retaining Carriers, Increasing Loyalty
To understand how to create carrier loyalty, brokers should start with their existing carrier relationships. Retaining carriers comes down to two key points: rate and carrier experience. The first point is the element brokers gravitate to when capacity gets tight. You can increase the rates offered to carriers to fill the gap, but that means giving up margin and is a short-term fix. The second point, carrier experience, is the more strategic and sustainable way to increase carrier loyalty and maintain a substantial margin.
If you are a broker, take a moment to answer the following questions about your carrier experience:
- Is it easy to get paperwork to you?
- Can carriers quickly sign up for ACH payment?
- Do you make it easy to find your available loads?
- Do carriers have a portal with visibility to their money and invoice payment statuses?
- Can carriers choose individual invoices to QuickPay?
- Is your QuickPay discount rate of less than 3 percent?
- Are you able to approve invoices quickly for payment?
- When you send a payment, do you provide email or text notification to the carriers?
If you answered no to more than one or two of the questions above, your carrier experience could use some improvement.
According to a 2018 survey conducted by TriumphPay, 90 percent of brokers currently do not offer a portal for carriers to submit paperwork, manage payment methods and check invoice approval status. Without a payment portal, the touches between the carrier and your back office will increase during the payment process. These increased touches, whether they are additional phone calls or emails, also increase the probability of human error and time spent correcting mistakes. TriumphPay provides one portal to carriers so that they can manage their invoices and payments across all their brokers in one place.
In addition to streamlining the payment process, brokers can also make the onboarding process easier for carriers. Onboarding products like RMIS and My Carrier Packets can help reduce carrier churn by make onboarding more efficient for carriers and brokers. Carriers can leverage their onboarding packs across multiple brokers to avoid re-entering their information for every new broker.
By making onboarding and billing processes more efficient, brokers can measurably improve the experience for carriers. A better experience will lead to increased retention and loyalty.
Bringing It All Together
In a world of real-time visibility, it’s essential that carriers can easily access information like when they will receive their payment, how they will be paid, and how much they will receive on an invoice. Doing so also allows for billing errors or misunderstandings to be addressed quickly and efficiently, while reducing frustration and building trust.
TriumphPay helps brokers solve these problems and more. We make it easy for carriers to see the status of their invoices and payments, change bank information, select QuickPay, and get paid on time. The best part? They can do all this in a single portal. With TriumphPay carriers have control of their finances. They can avoid signing long term factoring contracts which require them to sell all their receivables. Carriers get to decide, on a per invoice basis, which ones they want to accelerate payment on that fits their business needs. There’s a reason 4 out of 5 carriers prefer to be paid by TriumphPay instead of by a broker direct. We make it simple for carriers to get payment updates and keep them coming back to our brokers for more loads.
For more information, visit www.triumphpay.com.