A Freight Broker is licensed by the FMCSA as a “property broker” also known as a freight broker. Their job is to help shippers manage and move freight from start to finish. They do not actually move the freight themselves but simply outsource the transport of good to motor carriers including owner operators.
What does a broker do?
- He negotiates with customers, with dispatchers of transport companies.
- Checks the solvency, the legality of customers.
- Tracks the cargo, the terms of delivery
- Documents receipt of the cargo
- Maintains invoices, shipping documents,
- Keeps receipts
- Maintains e-mail correspondence
- Comply with payment terms
- Does not own trucks or hire drivers
- Turns to transportation companies that provide guarantees and quality services.
- Guarantees carriers a full load with regular deliveries, taking into account route and destination preferences.
Can anyone become a freight broker?
- Anyone with a high school education,
- A legal immigrant living in the United States.
- Good command of the English language.
As with any business, there are pros and cons to any business.
Pros include:
- Office work.
- Salary without delay.
On the minus side, perhaps, is that it is a very stressful job.
Watch our new video Is there a huge gap between freight broker and freight agent?
What is a broker’s income?
The main source of income is the commissions they receive for providing organizational services to both carriers and shippers.
Brokers in the United States are regulated and supervised by the U.S. Department of Transportation and require a license to operate as a freight broker.
A little bit about factoring
If you don’t want to wait for money from a broker for passed flights, which usually take 30-60 days, carriers usually turn to factoring companies.
These companies come in two varieties:
- One provides low interest rates, starting at 0.59%,
and if the broker doesn’t pay on time, these companies charge the carrier.
- Others, for a high percentage, 3-4%, take the risk of the broker’s solvency or incurring losses.
The factoring percentage depends on the size of the carrier’s company, the number of cars, and the size of the cargo.
What does the freight agent do in turn?
- Works under a licensed freight broker.
- Works with shippers to move cargo from point A to point B.
- Searches for shippers
- Evaluates shipments
- Searches for carriers
- Dispatches drivers
- Ensures timely delivery of cargo.
Many people choose to become freight broker agents, especially if they don’t enjoy doing administrative work in the back office, such as invoicing, collecting payments, etc.
Freight agent jobs are very popular with newcomers to the industry and can be very lucrative with minimal risk.