Antifreeze protects your vehicle’s engine from seizing up in frigid weather. Antivirus software safeguards computer systems from hackers. An “anti-broker” prevents the feelings of distrust (and sometimes disgust) shippers and carriers often harbor when dealing with traditional freight brokers.
Since the freight brokerage industry emerged with the deregulation of the trucking industry as a result of the Motor Carrier Act of 1980, the traditional freight broker has served as a middleman between shippers and carriers, arranging transportation with someone else’s assets and keeping a high percentage of the accessorial pay, including fuel surcharges that should be going to the carrier hauling the freight. Distrust arises from the lack of transparency and greed of freight brokers’ camouflaged fees, resulting in lower profits for trucking carriers and eventually weakening available capacity.
As the industry’s first anti-broker, Test Drive eliminates greedy fees and promotes transparency, fostering honest and mutually beneficial relationships between shippers and freight carriers. As an anti-broker, we operate with a fixed margin, utilizing advanced technology for optimal matching and facilitating seamless transitions to direct contracts, ensuring fairness and efficiency for all parties in the logistics process.
Today’s Shippers and Carriers are Forced to Operate in a Broken Transportation Landscape
Antiperspirants, of course, prevent sweating. An anti-broker prevents relationships that stink, instead providing transparency to create more harmonious communication between shippers and carriers.
Traditional freight brokers often operate with opaque pricing, inflating costs for shippers and reducing earnings for carriers, leading to mistrust and misaligned incentives due to a lack of transparency and hidden fees.
For shippers, the cons of using a freight broker, according to Express Freight Finance, include:
- Lack of control over a shipment. “Once the load is given over to the broker, the shipper’s ability to manage that load [is] hindered,” it said. You don’t even know who the carrier is that is hauling your freight!
- Little or no transparency. Express Freight Finance said that “there’s always the potential for a loss of transparency if a broker doesn’t communicate well.”
- Middleman fees. “Freight brokers must make money somehow,” it said. “They do that by charging more for a load than they’re paying the carrier. … The markup is simply part of doing business with a broker. Some brokers may also charge fees related to various tasks in the freight cycle.”
Drawbacks for carriers working with freight brokers include:
- Reduced earnings, which are particularly detrimental during a time in which the freight industry “continues to grapple with low rates and volumes,” according to Fleet Owner.
- Opaque pricing models, which cheat the carriers of needed revenue while maximizing revenue for the broker and driving up cost to the shipper.
- Misaligned incentives. Harvard Business Review said companies involved in the supply chain can actually boost their bottom lines by aligning their partners’ incentives. “Thus, the fates of all supply chain members are interlinked: If the companies work together to efficiently deliver goods and services to consumers, they will all win. If they don’t, they will all lose to another supply chain. The challenge is to get all the firms in your supply network to play the game so that everybody wins. The only way you can do that is by aligning incentives.”
- The volatility of the transportation industry.
Regarding the last bullet point, 2024 is turning out to be another rough year for carriers as well as freight brokers, according to Brush Pass Research, which said the number of active U.S. freight brokerages “continues to spiral.”
Brush Pass Research said the ongoing freight recession, which “has created a sharp drop in gross and net revenues for the freight brokerage industry,” has forced thousands of freight brokers to close up shop over the last couple of years. That includes the once golden child, Convoy, with CEO Dan Lewis blaming the digital freight brokerage’s demise on an “unprecedented freight market collapse.”
As is the case with most bankruptcies, Convoy carriers have had to fight to get paid. In fact, the court cases continue, as it’s estimated that the now-defunct freight brokerage still owes millions of dollars to carriers.
Overdrive said that while the courts “will have to decide what money goes where in the wreckage of Convoy’s contracts and agreements, the buck may ultimately stop with [venture capital bank] Hercules, who assumed ownership of Convoy’s assets, or the shippers themselves, who may or may not have paid Convoy for loads moved by carriers that went unpaid.”
Introducing Test Drive: The Anti-Broker
The anti-broker is like an anti-inflammatory drug. It relieves the pain of both shippers and carriers from dealing with traditional freight brokers and reduces cost swelling.
As the transportation and logistics industry’s first anti-broker, Test Drive acts in the best interests of both the shipper and carrier, eliminating the third-party freight broker. Test Drive completely removes this middleman, empowering long-term, direct relationships between shippers and carriers. Our model provides complete transparency to all parties, giving shippers the ability to know who is hauling their freight and giving carriers the power to build direct relationships – without a broker’s involvement.
At Test Drive, our mission is to bring shippers and carriers together helping them find synergies to improve their cost, service, and capacity metrics. Our name isn’t some silly made-up moniker. We are what we say we are: a platform where shippers can test carrier performance moving actual shipments via Test Drive’s authority. With our carrier testing, we serve as a strategic resource for shippers to procure new providers.
The goal isn’t to keep a carrier in testing forever but to move it to onboarding for the shipper’s permanent roster when the shipper decides that is justified. There is no expected timetable for onboarding to permanency. We leave that to the shipper to decide when onboarding of the carrier makes sense.
Transparent Pricing Model
Test Drive charges its customers a very small fixed margin over the carrier’s quoted rate while a carrier is being “test driven” to cover operational costs. This benefits both shippers and carriers – and goes away at the time of direct onboarding.
Hidden fees were No. 1 of “The 3 Secrets Freight Brokers Don’t Want You to Know,” according to DC Velocity, which said that “it’s common for brokers to hide fees elsewhere in the billing process – resulting in much higher costs than what the upfront price may seem to be. Therefore, shippers must go beyond just the fee pricing level and find out exactly what’s in their invoices when partnering with a broker.”
Direct Relationships and Seamless Transition
Test Drive facilitates direct working relationships between shippers and freight carriers. We enable shippers to “test drive” carriers before long-term commitments are agreed to. This process allows shippers to evaluate carrier performance and ensure compatibility before direct contracting.
By eliminating the middleman, Test Drive reduces costs and fosters trust, transparency, and stronger partnerships between shippers and carriers, enhancing overall logistics efficiency.
A Houston Chronicle article said the traditional middleman is “facing extinction” in some industries.
“In this global, information era, businesses can enjoy many of the middleman benefits without involving a third party if they have the time and energy to build key alliances,” it said.
By partnering with Test Drive, shippers do not have to spend the time or energy to build those key alliances with freight carriers. Test Drive lays the groundwork for them.
Advanced Technology for Optimal Matching
Test Drive already utilizes advanced technology to match shippers with carriers. Now, we’re taking it a step further, building a custom AI-powered software platform that will help shippers capitalize on synergies in the marketplace regardless of market demands.
A technology gap was the third freight broker secret in the DC Velocity article. “Despite data science and technology being central to business decisions today, there’s a significant technology gap in today’s freight broker market,” it said. “For example, many brokers still heavily rely on manual, labor-intensive systems, which are prone to human error. This leads to major inefficiencies occurring in the procurement process.”
Move Past the Middleman with Test Drive
DC Velocity said that thanks to technology, shippers and carriers “are no longer beholden to the broker market.”
“Given the long-term negative experience, high costs, and lack of transparency, shippers and carriers may start to move away from the brokers market and towards more advanced solutions that give them more power in freight procurement,” it said.
At Test Drive, we empower our shipping partners to build direct, profitable, and long-term carrier relationships. We help hundreds of companies move thousands of loads monthly — enabling shippers to save money and time by connecting them to reliable trucking partners and offering a deeper level of strategy and procurement that has never been experienced before. We’ve saved our customers tens of millions of dollars in shipping expenses and helped asset fleets make more money by avoiding reliance on traditional freight brokers.
At Test Drive, we provide:
- Complete transparency.
- Open lines of communication.
- Full accountability.
- Opportunities to save time.
- Paths to increased profits.
- Fewer headaches.
Think of the anti-broker as anti-establishment. We’ve uprooted the established old-school freight brokerage industry with a new way of doing business. The middleman is past his prime. (Remember how unhelpful the Middle-Aged Man’s advice was in the old “SNL” skits?)
With Test Drive, the long road ahead just got shorter. Request a quote today.