Freight Broker Salary: How Much Do Brokers Make Each Year?
Unlike many salaried jobs in the United States, freight broker income is harder to determine. That’s because there are several ways a freight broker can be employed and get paid. The location also has a huge impact on freight broker salary.
Looking online, freight brokers have a salary range from $42,926 (payscale.com) to $93,618 per year (indeed.com). In this article, we’ll break down why this is, what freight brokers make in different locations, and whether starting a broker business or becoming a freight broker is right for you.
How much do freight brokers make per year?
Different types of brokers make different salaries. There are three main types of brokers:
- Licensed freight broker: This type of broker has their own authority, owns their own company, and often employs other freight brokers. Becoming a licensed broker requires a significant investment and involves a high level of risk.
- W-2 freight brokers: W-2 freight brokers usually work for licensed brokers and receive a base salary plus commission.
- 1099 freight broker: Like W-2, 1099 freight brokers work under a licensed broker but are independent contractors.
W-2 freight brokers are the most common. Freight brokers can work from home in many cases, and ziprecruiter.com says the average salary is $57,729 a year or around $28 an hour. But one of the most significant factors affecting a freight broker salary is location. What state you live and work in will impact how much you make.
Top 10 freight broker salaries by state:
- Kansas $75,686
- Arkansas $71,220
- Illinois $ 66,448
- Utah $65,250
- Georgia $63,896
- Florida $62,515
- Ohio $62,268
- Texas $61,921
- Iowa $60,744
- New Jersey $56,470
* Average base freight broker salary listed on indeed.com as of 12/13/20.
Bottom 10 freight broker salaries by state:
- West Virginia $37,750
- Vermont $38,040
- Alaska $39,620
- Wisconsin $39,710
- Hawaii $ 39,920
- North Dakota $41,100
- Nevada $41,400
- Kentucky $42,390
- Delaware $42,790
- Maryland $42,820
Because many of these salaries depend on sales commissions, you can earn more compensation regardless of where you live and operate, so your actual salary range can vary. This list focuses on W-2 freight brokers, but other factors impact your income.
W-2 vs. licensed vs. broker agent salaries
There are other ways to become a freight broker, including a licensed broker or freight broker agent. W-2 means you work for a licensed broker in a sales and logistics position. You are paid a salary plus commission on your profits.
The licensed broker
This may be the most profitable way to become a freight broker, but it requires a significant investment upfront. First, you will need to obtain your own motor carrier (MC) authority. You’ll also need what is called a surety bond of at least $75,000 plus the insurance that goes along with being a broker.
Other expenses include transportation management software (TMS), freight matching tools (load boards) like Truckstop, and a dedicated website. You’ll also need marketing materials and a marketing budget, accounting staff and/or software, and either a chunk of liquid cash or the ability to pay factoring fees on invoices.
Like the bond, some costs will depend on your personal credit and must be paid before starting. Licensed brokers have the highest failure rate because of cash flow issues. But if you have the money to invest, you could earn a six-figure salary or more.
Broker agents or 1099 agents are independent contractors hired to handle sales and logistics. Your primary focus is getting freight and moving it. This offers a lot of flexibility because you can work for more than one licensed broker, you find your own customers, and in theory, you can work as many or as few hours as you want.
The most important thing to know about being a broker agent is there’s no base salary. You are paid solely on commission, although top brokers will pay up to 70% commission on a broker’s profits. As an independent contractor, you are responsible for paying your taxes and other expenses related to owning a small business.
Before becoming a broker agent, it’s best to have a few years of experience as a W-2 agent, some accounting and business management experience, along with some knowledge about how to market your service. If you’re adequately prepared, being a broker agent offers a lot of freedom and earning potential.
How does a freight broker salary compare to similar professions?
W-2 freight brokers average nearly the same wages as truck drivers who work as W-2 employees for a company. Similar to other jobs in transportation and logistics, owner-operators with their authority can make much more.
Like licensed brokers and agents, other sales-based positions like business or financial brokers earn more, but their salaries are also based on commissions. Like with most sales careers, you need a real passion for the job to maximize your freight broker’s income.
What is the outlook for freight broker jobs?
Due to increased demand in the logistics industry, the Bureau of Labor and Statistics predicts this career will continue to grow by 9% every year through at least 2024. The rise of e-commerce has made trucking and delivery one of the fastest-growing fields.
Shippers will continue to need trucks to deliver goods. Drivers will continue needing to keep their trucks full and avoid deadhead runs. Reliable brokers bridge the gap between these two things, using load boards and other tools to ensure everything ships on time.
How do you become a freight broker?
To become a licensed freight broker or work at a freight brokerage, you will need a combination of both education and experience:
- Take a course from a private company that teaches you to become a business broker.
- Work with a company for a while to get the on-the-job experience you need to become certified.
- Once you’ve reached a level of five points according to the industry certification standard from a combination of work experience and education, you can apply to become a certified freight broker.
- Invest in a computer, an internet connection, a dedicated phone line, and good freight broker software (often provided by your employer).
There are also specific crucial skills you will need to perform your job effectively as a freight broker:
- Strong communication
- Analytical thinking and problem-solving skills
- Collaboration skills
- Finding new customers (AKA “lead generation”) and maintaining business relationships (AKA “customer retention”)
- Strong computer skills
How can you earn more as a freight broker?
Because so much of professional freight broker salaries are based on commissions, there are three primary ways to earn more money:
- Get more clients and do more business. This means closing more sales and earning more commission by engaging actively in lead generation and customer retention for your freight brokerage.
- Ask for a raise. Once you’ve proven you have a good track record, ask for an increase in your base salary or your commission rate based on your performance.
- Be more efficient with your time. Use load boards effectively and delegate administrative or back-office tasks to others (especially if you’re a 1099 or licensed broker).
- Move. While you can work just about anywhere, your location makes a difference in how much you can earn (and keep). For example, freight brokers in Kansas make double what those working in West Virginia make. Some states also charge lower registration fees and have different licensing and insurance requirements. This can save you a few dollars. There are also varying local and state tax rates that play a role.
- Start your own company. Operating your own freight brokerage means you get to keep all of the profits.
Frequently Asked Questions (FAQs)
Use a load board to earn more income.
One of the most effective ways is to use load boards to ensure your clients are always hauling full loads and avoiding deadhead runs. This helps you cover loads faster, increasing your freight volume and profits, and means more money coming in.
Truckstop connects tens of thousands of carriers, shippers, and brokers through a complete technological solution that includes freight matching, planning and tracking tools, TMS, real-time rate analysis, and convenient payment solutions. Not only can you post and book loads, but you can uncover hidden capacity, monitor carrier compliance, view carrier performance ratings, and track freight shipments.
Find out how our platform gives you the visibility you need to get more done.
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