As the old adage says, “work smarter, not harder.” Technological advances have made “working smarter” easier with each passing year. Some people in the trucking and freight industry even see load boards as a prime example of modern technology that helps people work more efficiently and intelligently.
However, from where we sit as a bulk freight broker with 35+ years of experience, we fail to see much intelligence in working with load boards in the bulk freight world. In this article, we’ll examine load boards in detail and tell you why we have such trepidation about recommending them to shippers and carriers.
What is a load board?
If you’ve ever used Craigslist, you have a basic idea of what a load board is. Craigslist is an online classified advertisement website which allows people to post ads about items for sale, services that are being offered, events that are happening, communities and groups that are looking for people to join, and so on.
At its core, a load board (or “online freight marketplace”) isn’t all that different than an online classified ad. A shipper or BCO will use a load board website to post a load (e.g., “I have 500 pallets of widgets that need to move from Little Rock to Chicago at $____ price”). Carriers (or even freight brokers) who are interested in hauling that load can contact the shipper and arrange details.
Load boards are very common in dry van shipments, much less so in the bulk freight world. Though, that is beginning to change as bulk load board sites have popped up in recent years, as have new – and risky – bulk freight brokers who use load boards frequently.
Load boards and fraud
As with most things online, load boards can be used for good, or they can be manipulated by bad actors looking to scam people. The latter is happening all too often.
As we warn our children, people online are often not who they claim to be.
On April 26, 2023, the Wall Street Journal ran a story about the prevalence of freight fraud in load board transactions. The article clearly defines the most common type of fraud: double brokering. “Under the tactic known in the industry as double-brokering, people use false identities to bid on loads. The original shipper who owns the freight pays that person, who then posts the load again and leaves a legitimate trucking company or broker to handle the shipment before that company realizes the funds have already been diverted.”
The article goes on to say that online freight marketplace Truckstop.com saw fraud complaints (double brokering included) jump 400% in the past year. Part of the problem is that many people have gotten lax with vetting their carriers and brokers.
But freight fraud involves more than double brokering. An article in Freight Waves looks at two more types of load board fraud.
- Cargo theft: In a double-brokering transaction, the lack of information about the carrier leaves the original broker unaware of the cargo's whereabouts, making it vulnerable to theft. The trucker, deceived by the false broker, unknowingly delivers the cargo to a compromised warehouse where it is stolen and sold illegally.
- Load phishing: Load phishing occurs when a broker posts a load on a board and communicates with a carrier who appears legitimate but is actually using false information, leading to the cargo being picked up by a fraudulent carrier and subsequently disappearing.
While all of these forms of freight fraud are illegal, laws are not always enforced, and culprits are often untraceable. Shippers, brokers and carriers are encouraged to – at a minimum – check the FMCSA licensing status of companies they consider working with.
Why bulk load boards are not a good idea
Importantly, there are not currently widespread reports of fraudulent tactics being used on bulk load boards, and hopefully it will stay that way. But even aside from the freight fraud risk, we still have plenty of reservations about load boards from a bulk freight perspective.
1. Bulk loads are more complex
Anyone who’s ever booked a bulk load or hazmat shipment understands that there is often significant knowledge and back and forth communication that goes into making the shipment successful. As such, shippers need true experts to guide them through the process. You’re simply not going to find that expertise and support on a load board or a computer algorithm – especially if the project encounters a hiccup along the way.
The information needed to ship bulk or hazmat products includes a range of details, many of them more nuanced than you can capture in a drop-down menu on an online form. These details include product info, equipment needed, facility details, fuel surcharges, tank wash details, incompatible prior products, and more.
A simple phone call can cover these details and make sure that both parties are on the same page.
2. Uncertainty is expensive
When your transportation provider doesn’t have all the necessary details, or if those details seem unclear or incomplete, experience has taught the provider to do one thing: charge a higher rate.
Why a higher rate? Because seasoned carriers and freight brokers don’t want to be caught by surprise. They will protect themselves by assuming that any load detail left off could be a worst-case scenario. They are going to protect against those scenarios with higher rates.
The phone is again invaluable here. A phone call between two parties can quickly iron out details and remove the uncertainty that can come with online forms.
3. Transportation is a relationship business
Think of your personal life and the people and companies you do business with. Odds are that you choose to work with the businesses that you know and trust. It’s human nature.
Bulk shipping is no different.
When times are tough and capacity is strained, most carriers are going to make sure that they take care of the customers they have close relationships with before any newcomers. We all saw this first-hand during and after the pandemic: the shippers that had the relationships got their freight moved. Those without relationships didn’t, or had to pay exorbitant rates to do so.
It’s important to foster relationships with the transportation vendors you work with now – and the ones you may need in the future. The phone is a great tool to foster those relationships.
4. Problem solving is more effective over the phone
If there is a problem with your freight at 2am on a deserted highway in the middle of nowhere, who are you going to contact for help? Are you going to exchange messages with a chat bot that can help you with only the most basic of requests? Or, are you going to call the 24/7 line at your transportation provider and speak to an actual person that can help you?
If you don’t have access to the latter with your current transportation setup, it may be time to rethink your partnerships.
5. Liability is murky with load boards
Heaven forbid there is an accident with your load that results in serious injury or property damage. Who among the load board role players is ultimately responsible? The shipper? The carrier? The broker? The load board itself? From where we sit, there is still a lot of uncertainty regarding liability with load board loads. If you consider working with a load board, it’s key to gain a clear understanding of roles and responsibilities before you move forward.
Bulk Connection: your tried-and-true bulk freight broker
At Bulk Connection, we’re not necessarily for or against certain technologies. What we will always be, however, is an advocate for strong personal relationships based on mutual trust. We believe that relationships are the foundation of every successful bulk load that moves across our nation’s highways. And we do all that we can to foster honest, mutually-beneficial relationships with every shipper and carrier we work with – and we’ve been that way since day 1. To learn more about the benefits of working with a bulk freight broker that works with people, not just pixels, contact Bulk Connection today.
