Overview of the important role that Freight Brokers and Freight Agents play in the transportation industry. Learn what they do on a daily basis throughout their work day and how they make their money.

1. If you are unfamiliar with the Shipping Industry in the United States it is unlikely that you know
exactly what Freight Brokers and Freight Agents do. LogisticsAcademy.org is an online Freight
Broker Training School that helps people start their own companies and begin a career in the
Transportation Industry. In addition to training Freight Brokers they also train Freight Agents for
Brokerages, Dispatchers for Trucking Companies, and Transportation Managers for Shippers.
For more information visit LogisticsAcademy.org on LinkedIn, YouTube, or Google+!
What Does a Freight Broker Do?
A Freight Broker acts as an intermediary between Shippers (the broker’s customer) and
Carriers. Generally a shipper is any manufacturer, distributor, wholesaler, grower, the list goes
on; basically anyone who has a product that they need shipped from point-A to point-B. The
Shipper pays for the transportation of the goods going either to or from their customer. A
carrier is any person or company that undertakes the professional conveyance of goods or
people, generally freight brokerages are seeking trucking companies or intermodal (rail/train)
carriers for their needs.
A typical day brokering freight starts with checking on the whereabouts of drivers shortly
after you get in the office, reporting the driver information to your customers as soon as possible,
gathering information from those customers about what available loads they have moving that
day/week, prospecting some new clients, searching for trucks using different software and online
resources, booking available trucks with carriers over the phone, and dealing with problems.
What problems might a broker face? Sometimes trucks fall through (cancel on the load they
booked with the broker) at the last minute and the broker then has to re-cover the load with
another carrier. A good freight broker is detail oriented and has great communication skills.
These are important traits to have as you take care of tasks such as making appointments and
writing rate confirmations. Almost all of the work is done with a computer, a telephone, and a
fax machine/printer. It is the perfect home-based business.
How Freight Brokers Make Money
Let’s walk through an example of the cash flow involved in a single load. A shipper
agrees to pay a broker to pick up a load in NY and to deliver it in MN (about 1,200 miles), they
agree in writing to pay a flat rate of $2,400. The broker will go out and look for a truck near the
origin, where he or she books a truck with a carrier to haul the load for $1,800. Upon delivery of
the cargo the broker will invoice the shipper $2,400 and will receive an invoice from the carrier
for $1,800, leaving a profit margin of $600. It is extraordinarily simple to make money as a
Freight Broker, all you need to do is learn the language and how to find an abundance of freight.

2. Freight Broker Agent
What is the difference between a Freight Broker and a Freight Agent (sometimes referred
to as a Freight Broker Agent)? A freight broker has his or her own authority, which is essentially
the license required to do business, whereas a Freight Agent is contracted to work under a
Freight Broker’s authority when doing business. In other words a Freight Brokerage can only
hold one level of authority, but can essentially employ (contract) an unlimited amount of agents
to work under them. All of the agents represent one Brokerages authority under which they
conduct business. The Freight Broker is responsible for the financial aspects of the company;
financially backing the cash flow of the company (paying carriers and billing customers),
extending any required line of credit, handling insurance claims, paying agents, the list goes on.
Whereas the Freight Agent is free of the responsibilities that come with having your own
authority, meaning a Freight Agent can focus all of their attention on MAKING MONEY!
Agents are also free of the costs that come with obtaining your own authority even though they
still broker freight (find clients/accounts, negotiate rates, acquire carriers, move freight).
If you are a Freight Agent you will typically receive ~60% of your net profits. So on that
load from NY to MN that we talked about earlier you would make $360 as an agent, not a bad
cut considering you had virtually no overhead and you used someone else’s money for your
transaction. At the end of the year you will receive a 1099 from the brokerage that you work
with, meaning NO TAXES have been withheld. For this reason we recommend that Agents keep
their receipts and consult a professional accountant to prepare their taxes at the end of the year.
LTL Freight Broker
There are many different areas and niches that a Freight Broker can focus their attention
on. A big one is LTL, or partial loads. LTL stands for Less-than Truck Load, it means that a
shipper has product to move but not enough to fill up a full truck (TL is Truck Load). An LTL
Freight Broker will often only find one or two partial loads to put on a truck, while the carrier
uses their client base and connections to fill the rest of the trailer. Per square foot of trailer space,
LTL shipments often pay more than TL freight but it’s definitely less than ordering a full truck if
you only have one pallet to ship. In some cases a shipper will not fill the trailer but they will
SEAL the trailer, meaning it is not to be opened before it reaches the delivery dock. Freight
Brokers and agents can choose any number of niche markets that they want to focus on or
specialize in, from (although not limited to) the different types of equipment, seasonal
commodities and trends, LTL/TL, spot markets, or dedicated RFP’s.
If this sounds like something you might be interested in and you have any questions visit
LogisticsAcademy.org!