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.

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!