Many of those who attend our online freight broker training are seeking a chance to work from home, where they can run a business on their own that will give them the opportunity to make $50,000 to $100,000 or more a year.
As I try to clarify the difference between these two categories today, one of the questions I get asked all the time is, “What is the difference between freight brokers and freight agents?”
A freight broker is FMCSA licensed professional who acts as an intermediary for the transportation of freight by matching available trucks with shippers’ loads. Freight brokers can range from ordinary individual companies to huge international companies with billions of dollars in revenues, but their role is virtually the same. Brokers are required to make sure that they only engage motor carriers that meet FMCSA requirements, including authority, insurance and safety standards, and that they do not unduly delay payments due to motor carriers. Finally, trucking brokers assume responsibility for extending credit to customers, so it is important to monitor and verify a customer’s creditworthiness.
A freight agent is a professional who, in most cases, performs work under the supervision and direction of a licensed freight broker, assisting in the coordination of freight shipments. Freight agents are constantly working with both clients and freight carriers in an effort to ensure that clients are transporting freight in good condition in a timely manner and without problems. The bulk of a freight agent’s work day consists of providing customers with freight rates, selecting carriers, negotiating with shippers/carriers, dispatching trucks, scheduling pickups/deliveries and troubleshooting problems that could potentially cause delay or damage to cargo. Freight agents operate under the authority/license of FMCSA-approved freight brokers, so they have little or no liability, but can earn a significant profit that depends on the income from their customers. Often agents earn 50 to 65% commission on the gross profits generated by the cargo. Freight agents may work for hire or as an independent contractor, with many working online.
Here’s an example of how agency commissions work
The carrier is billed $1,500 for transporting cargo from point A to point B, and the trucking company is paid $1,300 for transporting the cargo, leaving a gross profit of $200. If the agent makes 60% of the profit, he will make $120 per shipment. A good trucking agent consistently hauls 2-5 loads a day, and a top agent hauls 10 or more.
Lots of Freight Broker Training students become licensed freight brokers or freight agents after our course. But many more of them start their own business due to our postgraduate mentorship.. Whether they are going to be a broker or an agent, proper training will save them time, money and nerves when starting a trucking business.