A common question, what EXACTLY does a Freight Broker do? Here is an overview of the important role that Freight Brokers and Freight Agents play in the transportation industry. PLUS learn what they do on a daily basis throughout their work day and how they make their money. If you have questions about Freight Broker Training visit LogisticsAcademy.org
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Job Description of Freight Brokers and Freight Agents
1. Job Description of Freight Brokers and
Freight Agents
Online Freight Broker & Freight Agent Training
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2. Freight Brokerages
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. In addition to training Freight Brokers we also train:
• Freight Agents, for Brokers
• Dispatchers, for Trucking Companies
• Transportation Managers, for Shippers
For more information visit LogisticsAcademy.org on LinkedIn, YouTube,
or Google+!
3. 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.
4. A Typical Day Brokering Freight
It usually 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.
5. Virtues of a Broker
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.
6. 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.
7. Brokers vs. Agents
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.
8. Freight Broker Agents/Freight Agents
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 loads).
9. Agent Commissions
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.
10. Many Niches for Brokers to Focus on
• 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.
• Choose something you're familiar with at first!
11. LTL Freight Broker
A big niche 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.