Types of Freight Agent Specialization
The general approach to specialization is finding a niche and filling it by providing all the services necessary to address customers’ needs. There are several ways to do this.
Specialization
The key here is to find underserved regions. This requires building expertise in finding carriers and addressing regulations and challenges in those regions.
Commodity Specialization
Specializing in one type of commodity can be lucrative. You can build your expertise and experience to benefit shippers and your bottom line. Examples of commodities include produce, steel, oil, and raw materials.
Delivery Specialization
A specialized approach can benefit several delivery requirements. These include fragile shipments that require special packaging, inspections, final mile, and other white glove services. Another potential specialization is delivering directly to residential or company locations, bringing all the equipment needed for offloading and placement onsite.
Industry Specialization
Transporting medical supplies, for example, requires special handling, permitting, and a wide range of delivery locations. Another industry example is moving Nursery Products. That requires very special handling, insurance, and delivery to several ‘big box’ retailers, often requiring multi-stop locations. That will need to be provided for them, increasing the challenge but also the price and margin.
Bulk Shipment Specialization
This specialization seeks out shippers with liquid or dry bulk products, ranging from resin pellets or powder to sand, flour, and more. It requires considerable knowledge of the type of truck needed, the proper handling, and the required insurance.
Mode Specialization
One approach to specialization is to concentrate on loads that require special trucks. These include refrigerated, flatbed, over-dimensional (OD), drayage, and power-only. This specialization helps minimize the time spent on finding shippers and can also support higher pricing.
Benefits of Freight Shipping Specialization
Every business approach, whether specialization or diversification, is about bringing value to the shipper-carrier relationship. That requires expertise and experience that can provide the logistics services potential customers seek and do so at a price that’s beneficial for you and the shipper.
The specialization approaches outlined above seek out freight markets with limited competition, which results in higher pricing and margins. Specialization also helps focus your efforts on specific types of customers and carriers, which, in turn, allows you to optimize your time for every customer and shipment. You’re prepared for all your customers’ needs and often foresee issues before they arise. All of this builds the trust and reliability all Shippers seek.
Once you’ve selected your specialization, you’ll start developing operational efficiencies as you build your list of reliable carriers and shippers that need your specialized logistics. For example, instead of reviewing a list of thousands of potential carriers, you will have narrowed that list considerably, optimizing your selection process. In addition to the operational efficiencies you pick up, the relationship with the Customers and Carriers position you to earn referral business and ‘preferred partner’ status through your consistent service and delivery solutions.
All that adds up to delivering cost-effective shipping solutions to your clients. After all, even though you may be operating in a narrow shipping niche, there will still be competition, and you will need to beat that competition, both in pricing and in service.
Downsides of Freight Agent Specialization
Of course, the downside of having all your eggs in one basket is that if that market segment suffers a slight downturn or even crashes, your business suffers, too.
In addition, along with specialized shipping comes considerable challenges. Finding shippers and carriers will be particularly challenging since you’re entering a specialized shipping sector. By definition, it’s a narrow niche with a limited number of participants. Plus, all those participants already have established relationships and solid reputations.
You’ll be the new person on the block who needs to quickly prove themselves, no doubt, while also learning the ins and outs of specialized shipping. Unfortunately, the best way to learn is by trial and error. The trick is to reduce the number of errors quickly and without losing your shirt in the process.
How to Get Started in Freight Specialization
It all starts with researching the market segments and niches that provide the best opportunities for your business. That could be areas of personal interest or even past employment. If you’re going to specialize, it’s best to select a segment that fits you and your interests.
It’s also critical that you find segments open for entry and offer opportunities to new players. For example, seek underserved areas. As noted above, those could be regions, commodities, types of deliveries and trucks, or bulk shipments. The real key is to find the most lucrative opportunities, ideally those with longevity and/or at the forefront of an upward trend in capacity needs.
After selecting the segment that best suits you and your business, you’ll need to activate your network to find customers. That will no doubt require a great deal of time and effort as you’ll be moving into a relatively new area for your business. For further insight, see our article How to Prospect New Customers (in the Freight Industry).
It’s also critical that you have everything you need to be successful. That starts with working with a Freight Broker who can provide the support, tools, and teamwork you’ll need, regardless of specialization.
Find the Best Freight Agency Program
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