In the ever-changing world of freight shipping, carriers constantly face the challenge of balancing stability with flexibility.
That tricky balance is vital to carriers’ businesses. If a carrier becomes too bogged down by commitments and contracts, it won’t be able to react effectively to changes in the marketplace.
But if a carrier has no long-term commitments whatsoever, it will have nothing to fall back on when those changes come.
So how do successful carriers achieve this impressive balancing act?
One method is to secure dedicated lanes. A dedicated lane is one that is covered by the same drivers, hauling the same freight, to the same locations on a predictable schedule.
Many carriers find their dedicated lanes independently, but there are advantages to partnering with a broker to find and secure dedicated freight.
Like any business strategy, this has its pros and cons.
While dedicated lanes can provide much-needed predictability and streamline operations, they might also restrict opportunities to capitalize on potentially more lucrative spot market rates.
Anderson Trucking Service (ATS) has been helping carriers find and maintain consistent lanes for decades. Every day, we provide carriers like you with the expert insights needed to make informed choices about potential partnerships that align with both their business goals and their operational needs.
In this article, we’ll explore the advantages and disadvantages of committing to dedicated lanes with a broker, and provide our tips for success in securing and maintaining that broker relationship.
You’ll walk away from this article with the knowledge necessary to take your next steps with confidence.
- The pros and cons of dedicated lanes with a broker
- How do I establish dedicated lanes with a broker?
The Pros and Cons of Dedicated Lanes with a Broker
No one situation is going to meet every need of every carrier, but there are some overall advantages and disadvantages to seeking dedicated lanes with a broker that are useful to consider.
Generally, carriers who choose to commit to consistent lanes with a broker find value in the stability the arrangement provides, though it may limit their ability to leverage the spot market to score better rates.
Of course, there’s nuance to both sides of this conversation, which we’ll get into more below.
Whether you choose to move forward with a trusted broker or go it alone, understanding these pros and cons can help you make an informed decision.
Pros of Dedicated Lanes
Carriers who have the capacity to dedicate trucks and drivers to the same lanes consistently can reap a variety of benefits, including:
- Stable freight, scheduling and pay
- Optimized lanes for less downtime and deadhead
- Greater access to headhauls
- Stronger carrier-customer relationships
The primary advantage of booking consistent lanes with a broker is the — you guessed it — consistency!
In this dynamic industry, everyone is seeking stability. Brokers want coverage from dependable carriers. Carriers want to have predictable freight. Drivers want to have reliable schedules. If you can cover a certain lane consistently, everyone wins!
And that includes the customer: Covering a lane with drivers that are familiar with the route and freight decreases the likelihood of supply chain hiccups.
Another advantage for carriers is the opportunity to lock freight down early to ensure trucks keep moving.
Brokers can help carriers pre-plan freight more effectively and with greater lead time. Optimizing your lanes in this fashion can help you avoid downtime, deadheading, and other pain points.
While many carriers can and do book freight directly, working with a broker to cover lanes consistently can support a company’s overall operational goals.
Great headhauls are always the goal, and brokers can help carriers find and maintain those lucrative lanes. Carriers can also build a customer base by running a dedicated lane for one broker while letting others know when they’ll be in an area.
In this relationship-based business, brokers value carriers that can be relied upon to show up and get the job done right, and they can reward that dependability with better rates.
Ultimately, a partnership with a broker can be a mutually beneficial one, empowering brokers to better serve customers and carriers to secure stability and good rates.
Cons of Dedicated Lanes
While all that stability is great, there are downsides to committing to dedicated lanes with a broker, including:
- Missed opportunities on the spot market
- Pressure to support lanes long-term
- Risk of customer pulling freight from broker
When the spot freight market heats up, carriers that are locked in with a broker at a certain rate could be missing out on extra revenue.
Smaller companies are unlikely to take that deal, preferring to secure freight on the spot market for greater possible profit. Still, for larger companies focused on the long-term benefits of a partnership, the stability of dedicated lanes might be worth sitting out the spot rate race.
What’s more, area-specific markets ebb and flow, and supporting a lane could become difficult when that market cools down to a backhaul.
Finally, there’s no guarantee that your broker will consistently have the freight in question.
In a perfect world, the customer, broker, and carrier would all enter into an agreement in good faith, with the intention of sticking around for the long haul.
When a broker assigns a dedicated lane to a carrier, the broker generally assumes it will have that freight for a minimum of six months, but that isn’t always the case. Customers pull freight from brokers all the time, for a variety of reasons, so it’s hard for carriers and brokers to know just how “consistent” a consistent lane will truly be.
Even so, it’s smart for carriers to keep at least a portion of their business on dedicated lanes, if only for security’s sake.
If the spot market dries up, carriers without dedicated lanes to fall back on will feel the impact. Wise carriers maintain a few consistent lanes at all times to protect their business from the whims of the marketplace.
How Do I Establish Dedicated Lanes with a Broker?
Okay, you understand the pros and cons of having dedicated lanes with a broker, and now you’d like a few of your own. Where do you start?
With a strong existing broker relationship.
Virtually no carrier starts with a brokerage on dedicated lanes. The last thing brokers want is to be left holding the bag after promising a customer dedicated coverage!
If you already have a long-standing relationship with a broker, congrats: You’ve already completed the first step in establishing consistent lanes.
Brokers need to trust that if they award you this sought-after dedicated freight, you’ll cover that lane reliably — and that kind of trust takes time to build.
To even be considered for a dedicated lane in the first place, carriers need to be consistent in their performance and communication with their brokers. Letting your broker know where your trucks are and staying in contact are critical to building the trust necessary to run dedicated lanes.
If you have a sterling reputation as a great carrier for that broker, they’re likely to be receptive when you approach them to discuss dedicated lanes. A proven commitment to reliability shows that you understand what it takes to earn consistency from a customer.
If you don’t work with any brokerages yet but are interested in forging a long-term relationship with one (or more), start slow and focus on the quality of your partnerships. Once you have some history with a broker and some successful loads behind you, you can broach the subject of dedicated lanes.
After you’ve begun the consistent lanes conversation, the broker will work with you and the customer to come up with a solution that all parties can be happy with.
Build Strong Carrier-Broker Partnerships
Whether you're contemplating deepening existing broker relationships or weighing the benefits of such commitments, understanding these dynamics is crucial to navigating the complex freight shipping landscape.
Seeking out dedicated lanes can provide dependable revenue streams for a carrier. Doing so in partnership with a broker can pay dividends in the form of long-term relationships, better rates, and more efficient, streamlined operations.
But not every carrier will be a good fit for dedicated lanes with a broker. If your business thrives on riding the highs and lows of the spot market in search of the best possible rate, or if you can’t be certain you can support a consistent lane for a meaningful stretch of time, the disadvantages of this strategy may outweigh the advantages.
Whether you’re seeking dedicated lanes with a broker immediately, or are merely considering it for the future of your company, it’s in your best interest to invest in your relationship with your broker through trust and communication.
By building a solid foundation of mutual respect and accountability, you’ll position yourself for success across all your work with that broker — not just the dedicated lanes.
