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Friday, September 21, 2012

Catch a Quick Glance in to the History of Freight Brokerage

By Jim Casey


If you step into a freight broker's office today, the busy chatter, steadily humming fax, and ceaseless ringing of the telephone could imply that freight brokering has been flourishing for ages. In freight broker training school though, you will know that it's a recent addition to the logistics world. But tracing the history of the freight brokerage industry won't be complete without a discourse of the history of the trucking industry in America.

Before the arriving of the car, moving freight was done by train or a horse-drawn carriage. Trains could only work with the major towns where there were railroad tracks so any load that wanted to go outside the towns was delivered by horse-drawn autos.

This was the 1900s and trucks were just novelties; new machines that ran without horses but could not go far. Their engines were electrically powered so they were only restricted to short routes. Additionally, there were not any paved roads in the countryside to speak of so driving was tough and took hours. Therefore wagons were restricted to carrying small loads and brief journeys within urban routes.

Around 1910, technological progress opened fresh opportunities for trucks, not least being the gasoline-powered engine and the invention of the tractor and semi-trailer combination designed for hauling comparatively larger loads. Moving freight by tractor trailer increased in popularity. Still, the bad condition of rural roads, solid tires and a road limit of 15 mph continued to restrict these vehicles to working in the cities.

With the congestion in trains and railways during the Second World War, trucks started to get an intensive exposure to hauling freight. At this time, the government, and shippers alike, commenced exploring with long distance truck shipments. Quicker speeds became possible with the appearance of pneumatic tires, as well.

The addition of a structure of paved roads in the 1930s made a further reach for trucks practical. Then in the 1960s the US started building an interstate highway system that connected major towns and towns across the continental United States - something that was heretofore very challenging. Trucking gained a foothold in the transportation industry this time, continuously winning dominance in the freight industry from rail freight because of its pliability and agility. Lorries could deliver any load wherever and whenever.

Still, the industry was hemmed in by the Motor Carrier Act passed by Congress in 1935. The restricting regulations imposed by the Interstate Commerce Commission (ICC) meant smaller players couldn't enter the market without great effort. Lobbying and work done by industry shareholders ended in the deregulation of the trucking industry in 1980, opening the sector to new players and new configurations. For example, warehousing companies started getting involved in freight shipments, and trucking corporations commenced offering warehousing services. A pleasant effect to the new law was the entry of small businesses into the logistics world, giving larger, better established firms new competition.

The unexpected inflow of service providers naturally decreased shipping costs. Shippers can now research prices for cheap, more reliable carriers. That wasn't the only thing that was changing the complexion of the transportation and logistics industry. Increasing globalization and lower trade obstacles have permitted makers the opportunity to ship their products further and wider. In this environment, freight brokers started to thrive and flourish.

Manufacturers and smaller shippers without their own traffic departments turned to freight brokers who took over the responsibility of getting shipments delivered to their customers punctually. Big shippers who maintained an in-house logistics and supply department found valuable support from freight brokers when their own traffic department had spillover loads that they couldn't handle any longer. Freight brokers simplified the complex work of making sure cargos found their way to the consignees by liaising between shipper and carrier.

If there's one thing you'll learn from freight broker training, it is that the transport and logistics world is a symbiotic world. Although there are natural frictions among the players, one cannot do without the other. Shippers - whether large or small - need the deep database of trustworthy carriers that freight brokers have to facilitate get their loads shipped punctually. Carriers also need the leads and business that freight brokers bring on the journey back from a delivery and during lean times. In the middle of this, the freight broker directs the traffic.




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