Who is the LTL Middleman?
A middleman is a person acting as an intermediary in the supply chain between the shipper and the carrier. Your broker or handler would fill the role of ltl middleman. The intermediary offers little value to the LTL shipper, building in a margin while playing the matchmaker.
Your broker will likely claim to have intimate relationships with the carriers to create a perception of their services being valuable. If a person can’t let a freight shipper communicate directly with the carrier, it’s most likely that he/she is a middleman.
There’s minimal value in the services offered by a middleman if he or she cannot agree to separate their service fees from that of the carrier.
Whichever is the case, the middleman is your raising prices and the overhead is clearly not necessary. There are several reasons why every LTL freight shipper should say ‘Later’ to the LTL middleman.
Top 6 Reasons to Say ‘Later’ to the Middleman
Lower Costs, No Overhead
Middlemen create layers in the supply chain hence increasing unnecessary costs and overhead. Working directly with the carriers lowers costs with no overhead.
Build Direct Relationships with Carriers
Middlemen act as intermediaries between the LTL freight shippers and the carriers. Saying ‘later’ to them gives shippers the chance to build direct relationships with carriers. These relationships can in turn benefit their businesses in many ways.
Technology Makes Middlemen Unnecessary
Technology offers solutions to most of the services provided by middlemen, rendering them unnecessary. Moreover, the use of technology in the freight forwarding industry also facilitates cost reductions.
The interest of shippers in terms of price/quality ratio does not align with that of intermediaries. W0henever a middleman creates his margin by adding a mark-up to the service, he is motivated to keep the shipper away from the carrier for the chance to make the margin as wide as possible.
Although doing so is cheaper for the middleman and more profitable, it is of the lowest quality to shippers.
Intellectual Property Rights Security
Working with middlemen means the shipper has no access to carriers’ actual locations hence there’s no way to know who accesses sensitive branding and design or any other special services requested by shippers.
Knock offs may come about as shippers have no idea about the real carriers shipping their LTL freights. This makes it hard to take charge of intellectual property rights.
Moreover, unlike carriers, middlemen have no equipment like trailers, laborers like drivers and loaders or even shipment warehouses. The fact that they have no physical assets mean they can easily disappear into thin air in case of a lawsuit regarding infringement of IPR or even quality recalls.
Middlemen will always do anything to keep shippers from communicating directly with carriers, creating an extra layer in the supply chain. This does not just prevent shippers from direct communication with carriers, the experts in the industry, but also increases communication lead times.
The extra layer created by the middleman is more so problematic when there are issues with the shipments and the respective carriers need to communicate with the shippers. The fact that the middleman relays all the communications between the two parties can result in a technical misunderstanding, further worsening situation.