Starting a business can be daunting, but taking that leap of faith while the market is still highly volatile is risky, says Cam McCarthy from 4WRD Freight. He spoke at a webinar hosted by FreightWaves, discussing the secrets of how to survive this down market area as a broker.
“If you can survive this market, you can probably survive anything,” encourages McCarthy.
It’s been difficult in the freight industry, with analysts saying there is still a “large oversupply” in the market. Andrew Smith, senior vice president at Circle Logistics in the US, expects some shift soon to a “demand-driven market.” However, he warns that it doesn’t mean the demand is already there. It continues to be a challenging territory for freight brokers to navigate.
Thrive as a freight broker during tough times
McCarthy started working at 4WRD Freight six years ago and is now the president of the freight brokerage. He encourages other business owners: “To help start a business in a time when most companies are leaving the industry, [for me] it was a leap of faith.”
“We have good financial backing that helps push us along the way. I’ve just been running the truck for two years. I don’t think they wanted to see another quick exit on the freight broker side of things.”
With sales executive experience, more than seven years of combined business-to-business and business-to-customer selling experience, logistics, and supply chain expertise, McCarthy says he decided to start a brokerage in Chicago one day.
“It was a risk, but we have really good financial backing, and that helps,” he says. McCarthy admits that the level of experience team members had at the time also carried them through difficult days, helping them to “stick around.”
Startups facing a tough time
“There are certainly a lot of freight brokers exiting the market. We’re seeing that happen in the data,” says Andy Tomka, vice president of product at MVMNT. With over 15 years of experience in logistics, supply chain, and operations management, it’s safe to say he has a deep understanding of the industry’s challenges.
“We’re also seeing a lot of resiliency within the broker segment. If you got into this space just before the pandemic, you are on solid footing, usually with some established shippers and customers.” There is a level of resilience from brokers, customers, and the “existing incumbents” in the profession.
Why is a good relationship with carriers important?
Starting as a freight brokerage can be challenging initially, especially in building relationships and winning customers’ trust. McCarthy says: “Carriers don’t want to work with anyone in business under a year. We needed good financial backing to pay these guys quickly.”
According to McCarthy, focusing on reliability and building up a good reputation were the two key elements that made their company stand out fast.
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