Millions of shipments cross the country every year. Most of these shipments are organized by freight brokers and freight broker agents. This overview explores the essential differences between a freight broker, a freight agent, and an independent freight agent. These three roles have a lot in common, but there are significant differences. Read on to determine how these different roles impact the trucking industry and how freight broker agents can earn a substantial income in the logistics industry.
What is a freight agent?
A freight agent connects shippers and carriers. Like Hollywood agents find and organize gigs for their clients, freight agents organize jobs for truckers. They are the ones connecting loads to trucks and trucks to loads. Agents source clients, negotiate fees, and plan pickups and deliveries. If route problems come up, the agent steps in to problem-solve and keep the cargo moving. It’s a mix of administration, sales, and customer service, all wrapped into one job.
As an agent, you are responsible for everything from sales tasks like cold-calling prospective clients to recruiting owner-operators to carry your loads. Agents also schedule routes and dispatch truckers across their network.
Freight agent vs. independent freight agent
The only difference between a freight agent and an independent freight agent is that an independent freight agent can work under contract with multiple freight brokers and is not directly employed by one company. When we talk about freight agents in this article, we mean both agents who work for an employer directly and freelance agents who can contract to any broker. They are the same.
Is a freight agent the same as a freight broker?
A freight broker can be anything from a sole operator running a home office to a massive global enterprise with hundreds of employees and millions of dollars in revenue. All freight brokers must hold a Federal Motor Carrier Safety Administration (FMCSA) motor carrier authority. Brokers are responsible for the legal and regulatory aspects of the shipping industry. They are liable for the safe delivery of the trucked cargo they contract. They’re also responsible for paying truckers and collecting payment from shippers.
By law, brokers must hold a surety bond of $75,000. It can be posted as a cash bond or taken out as a policy with a bond company. These companies usually charge an annual premium of between 1% and 10% of the bond amount, depending on the broker’s credit history. Most shipping companies also require a broker to hold contingent cargo and general liability insurance to protect their cargo in the event of damage, theft, or other catastrophic issues.
The difference between a freight broker and a freight agent is that a freight agent doesn’t need to hold surety or insurance. Freight agents work for the broker, managing the day-to-day operations. In other words, a broker puts up the legal and financial framework needed to facilitate loads, and a freight agent physically manages that workload.
Benefits of working with a freight broker
You might consider becoming a freight agent if you have a passion for trucking or a long list of contacts on either side of the industry. Many people see the freight agent role as a stepping stone to becoming a broker later. But there are benefits to working as an agent, either a salaried employee, or an independent contractor.
- Brokers have bonds and licensing in place.
It takes time and resources to get an authority to operate as a broker. But as an agent, you can start working under a broker’s authority almost immediately. Brokers already have the insurance, surety bonds, and licensing in place, leaving you free to focus on shifting freight and making money.
- Brokers have an established network of carriers.
Most brokers already maintain relationships with a network of owner-operators and truckers. You can focus on finding new business from new clients, knowing you already have trucks available to carry those loads.
- Brokers pay on a predictable payment schedule.
Working with a broker can give you more financial stability and consistency. Most pay their agents on a regular schedule. Some directly employed freight agents get a regular base salary plus commission and benefits.
- Work with multiple brokers.
Independent freight agents are free to work with more than one broker. You can work with as many individuals or companies as you like, matching loads and carriers. You can increase your workload and earn more income by taking on additional partnerships. Independent agents can also find more exciting and diverse work by working with a range of different brokers.
Working under a broker’s authority gives you access to a flexible, well-paying career without the financial stress or pain of setting up your own freight brokerage.
How much can a freight agent make?
According to ZipRecruiter, beginner freight agents earn an average income of more than $46,000 (total salary and commission). That’s more than $20 an hour, or just under $4,000 a month, which is an impressive entry-level rate. Because freight agent salaries are often commission-based, earning potential grows even higher than that starting rate as you develop skill and experience matching loads.
How are freight agents paid?
Salaries and packages vary, but it’s common for brokers to pay agents a percentage of their profit on a given load. For example, say a shipper reaches out to a freight brokerage business and offers them $2,000 to transport cargo from Chicago to New York. Then you, as an agent contracted to the company, find a carrier on a load board who’ll take the job for $1,550. The total profit is $450. If the broker offers you a 30% commission, you earn $150. Now imagine doing that twice a day, every day, and you’ll see how lucrative this role can be!
Use a load board to find freight carriers.
You can use a board like Truckstop.com to post loads and manage your jobs. And, because Truckstop.com updates in real-time, you can see available trucks and drivers the moment they post online and dispatch them quickly. Shippers and carriers also use Truckstop.com to vet and identify quality agents. As you work with more satisfied customers on both sides of the industry to shift loads, your list of contacts and reputation can grow, allowing you to work faster and earn more.