A Shippers Packet is the first impression that Freight Brokers make with prospective shippers. The problem is not all freight brokers know what goes into a shipper packet and especially don’t know how to use it the right way to stand out.
First impressions are everything. This is one of the most important lessons I learned as a freight broker. From the first time you speak to a shipper or customer, the first load you move with a carrier, the first impression sets the tone for the rest of the relationship and has the ability to work in your favor or against you. The bad news is, you only have one chance to make a first impression, but the good news is, it’s easy to to really nail it, and for you beginners if you find yourself asking, what is a shipper packet?
A shipper packet is a collection of documents given to a shipping customer by a freight broker or carrier. Inside this packet are important documents such as the operating authority, W9, business formation documents and other relevant operating licenses from the FMCSA & DOT. Shipper packets are an important part of the onboarding process for freight brokers.
This is slightly different than a carrier-broker packet.
The best way freight broker’s can make a first impression with shippers is by using a freight broker shipper packet template. A well organized shipper’s packet is a powerful way to start a business relationship off on the right foot. So today we are going to look at what a shipper’s packet actually is, how to set up a shipper’s packet and when you need to start sending one.
What is a Shipper Packet and How is it used by a freight broker?
When I was starting out as a freight broker, I remember getting off the phone with a new client and their first email to me saying, “can you send me a shipper packet?”
I had no idea what this was at the time, so I had to go to all of my colleagues and ask them what a shipper packet even was.
It was an intimidating experience, and I was filled with a rush of excitement that I was signing up with a new customer, yet flush with nerves as I didn’t want to screw anything up.
I learned quickly that all this packet is a formality with new shippers in order to do a few things.
What is a shipper packet used for?
- Verify operational status of a freight brokerage
- Provide easy access to important license information
- Display proof of insurance and bonded status of a freight brokerage
- Give insight into the services and capabilities of a brokerage
- Provide an formal contract between a shipper and a brokerage
We’ll cover how it can possibly convey all of this information soon, but the important aspect to grasp is that a shipper’s packet is basically the same concept of you filling out a form while you’re waiting at the doctor’s office.
At the doctor’s office you have to fill out all of your information and provide your documentation in order to prove you are who you say you are, and you can pay for the doctor’s service so that they can enter you into their system and ultimately treat you.
The same concept applies to your shipper packet and the shipper.
What should you include in your shipper packet?
We already mentioned that a shipper packet is like your business card. It should give a full insight into your brokerage from your operating status to your services that you want to provide to a potential customer. So now, the question becomes What do you put inside a shipper’s packet in order to be acceptable?
There are a few key elements that need to be present in a shipper’s packet:
- Operating Authority
You should always include a digital copy of your operating authority showing your registered MC & DOT number to prove that you are an active carrier or freight broker and your authority is active.
- Hazmat Certification
If you are a freight broker that handles hazardous materials, some shippers will require you to register with the PHMSA, the governing authority of hazardous material handling and transport. This is more-so important as a carrier or someone who is directly involved in the physical handling of hazardous goods.
- Proof of Insurance
Some shippers will require that freight broker’s carry proof of insurance. Carrier’s are required by law to carry this insurance. Freight broker’s may be asked to provide proof of general liability insurance, contingent cargo, contingent auto, and worker’s compensation insurance. Include this proof in your shipper packet with your customer’s name added as a “certificate holder” by the insurance company.
Some companies may hold special insurance requirements that will be requested as needed. Make sure you communicate these requirements to your licensed insurance agent in order to verify you can comply with them.
- BMC-84 Bond
Freight broker’s are required to register a BMC-84 bond in the amount of $75,000. Shippers may require you to provide proof of this bond in order to entrust you with moving their cargo. These bond’s can be acquired with a payment plan, or posted in full through a surety company.
- Completed Form W9
A W9 form gives a company your full tax identification number and identifies your business type. This information is important for shippers who are paying for your services and for anyone who needs to comply with proper tax reporting requirements.
- Carrier Qualifying Procedure
Trust is the foundation of a business relationship. So, our students are taught to include something called a carrier vetting procedure inside their shipper packets. This shows a shipper that you are fully invested in the safety of your carriers and therefore will take extra precautions to ensure the safe movement of their freight. This is a bonus document that not many broker’s or carriers include.
- NMFTA SCAC Certificate
A SCAC code is a 4 letter code assigned by the NMFTA. For freight broker’s it is used by shippers as an identification code that helps with billing and internal organization in their freight management system. You can register for a SCAC code based on your authority at this website.
- Invoicing Procedure and Contacts
A shipper needs to know which department is responsible for each responsibility in your brokerage. It is wise to provide a full list of company contacts and invoicing procedures in your shipper packet. You should include a full company directory separated by responsibilities as well as your invoicing procedures that a shipper can pass onto accounting. Here, you can also include your factoring directions or NOA, Notice of assignment, if you are using a freight factoring company.
- Complete Service List
Your onboarding packet should always include a list of your service’s and capabilities with your contact information. Be sure to include some information about your strong regions, and any specialized services that will add value to your shippers supply chain.
- Your Broker-Shipper Contract
Every business relationship should be solidified by a broker-shipper contract. These contracts help define the “rules of engagement”. How are claims handled? How long do rates last? What are the expectations of the broker, carriers and dispatchers? How are claims handled? These are all questions that are answered and agreed upon in a Broker-Shipper contract.
Why are Broker-Shipper Packet’s important?
Having a complete carrier packet serves an important use for a shipper and broker. As you can see, these packets act as a valuable source of information for a shipper, They reduce a lot of risks when working with a new freight broker who they don’t already have a history with.
Broker Shipper Packet’s Help Streamline Onboarding
Onboarding freight brokers is a lengthy process for some shippers. A well organized broker packet makes this process easier on a shipper so that they can start requesting quotes from you much quicker.
Mitigate Risk
Shippers have a duty to ensure the safety of their freight. Choosing a trusted broker is extremely important to making sure that their freight is moved safely. By providing all of these documents in your shipper packet, a shipper can have confidence knowing that their business is in trusted hands.
Closing Thoughts
As you can see shipper packet’s serve an important role in the freight industry so setting this up before you start soliciting customers is vital. That’s why in the Freightskills academy, we dedicate an entire lesson to the creation of a shipper packet. And like always, with freight skills we include a few more bonuses that are sure to make your shipper packet’s stand out above the rest.
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If you’d like to work with me directly on your brokerage growth plan or your shipper packet Check out the Freightskills Academy
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