Freight Brokers, Freight Agents, and Freight Forwarders: What’s the Difference?

The very first thing you’ll learn in freight broker training school is distinguishing between the different players in the logistics and transportation industry. Some of the major players include freight brokers, freight agents and freight forwarders.

At first, all three may look and sound the same. After all, they do almost the same thing, have the same freight training, know all there is to know about brokering, and have been trained by people who have the same experience and knowledge in the industry. But when they hunker down to work, there are noteworthy differences in what they do.

Freight Brokers

Teachers in freight broker training schools worth their salt will tell you that there’s a definite distinction between the freight broker and the freight agent.

The freight broker runs the brokerage firm. For starters, s/he must have a property broker’s authority from the Federal Motor Carrier Safety Administration (FMCSA), carry a $10,000 surety bond, and have designated agents in the states they’ll be operating in for legal claims purposes.

Freight brokers can be self-employed full time and work from home. Having the profits from brokering arrangements between shippers and truckers all to yourself doesn’t hurt either.

But freight brokers must divide their time between running an entire business and the all-important, enterprise-boosting activity of finding new shippers and carriers. They have to think about cash flow, billing and collection, marketing, networking, and all the “backroom” grunt work that goes into running a going concern. At the end of the day, they may not have the time to do the important things that need to be done to increase revenues.

And this is where freight agents come in handy.

Freight Agents

Many fresh graduates from freight broker training schools sometimes start their brokering career as freight agents. Being a freight agent allows them to hit the ground running, recoup their training investments quickly, and at the same time, get the knowledge that only a hands-on exposure to freight brokering can give.

Why start as a freight agent straight out of freight broker training school? For the main reason that freight agents (or freight broker agents) do not need the authority, surety bonds and insurances that come with a full freight brokerage business.

As a freight agent, you work under a freight broker so there’s no heavy financial pressure to give your career start a hiccup. You can jumpstart your earning potential quickly with just a computer, fax and phone line, and internet access right from a home office. That’s a very low-cost start-up indeed.

Your main responsibility is getting new customers and drivers. You’ll spend most of your time marketing your freight brokerage services, networking to find shippers and carriers, doing reference or background checks on them, making sure that your loads get to where they should go on time, and troubleshooting load problems, to name a few. In short, you’re more into the operational side of freight brokering rather than on the strategic management side.

The upside to this arrangement is that you won’t need to worry about invoicing, billing, collections, cash flow, payroll and all that jazz that goes into directing a brokering company. Your freight broker takes care of that entire headache. Your business is getting more business, period.

The downside to this arrangement is that you’ll have to share your earnings from commissions with your freight broker.

Freight Forwarders

To the freight broker training school freshman, the freight forwarder and the freight broker is often interchangeable. That’s easy to understand since to a layman there’s somewhat of a similarity to what they do. But to old hands in the freight industry, there’s a considerable distinction between the two.

While freight brokers typically move loads from shippers to carriers without even seeing the freight they’re moving, freight forwarders directly handle the goods that must be transported to different destinations. Most importantly, they transport cargoes and shipment internationally.

To ship loads overseas, freight forwarders have to receive smaller cargoes and combine these into one big shipment. That means they’ll have to possess the goods physically, consolidate them (often according to a single destination), and then decide on what method of shipping they’ll use—whether they’ll move the cargo by land, air or water.

For a freight forwarder, moving cargoes and shipment internationally means additional knowledge and experience beyond being a domestic freight broker. You’ll need to have a solid grounding in customs—laws, procedures and practices, and have experience in vessel requirements and loading. Fluency in one or two foreign languages won’t hurt either.

There are many more players in a freight brokering industry. For now, if you’re following your own curriculum, it’s best to know the difference between freight forwarders, freight agents and freight brokers so you’ll have a good grounding while you progress in your self-paced freight broker training.

10 Top Reasons Why You Should Become a Freight Broker Today

The job outlook for a freight broker these days is exciting. It’s the fastest growing occupational category in the transportation industry, the highest at 29% compared to all other occupations.

With an improving economy and the increasing preference for online shopping, freight brokers are ever in demand.

If you’re still sitting on the fence about freight broker training or shifting careers, here are the top 10 reasons why you should become a freight broker today.

 10. Freight brokers can be totally independent.

When you’re a freight broker, you call the shots. You can choose to start as a one-man operation or, as you grow, you can employ one or two employees to help you keep track of everything. Either way, there’s no boss breathing down your neck while you’re on the telephone speaking with a customer. You make the decisions, not somebody else.

 9. Freight brokers have more time with their families…at home.

If you’re a truck driver, being on the road 6 days out of a week can get old, fast. Sure you get to see different places but you don’t really have time to see the sights. All you’re concerned about is getting from point A to point B in the shortest possible time or you lose paying customers.

As a freight broker, you set your own working time so you’ll have more hours spent teaching junior how to catch a football, having weekly date nights with your significant other, or even going on honest-to-goodness sightseeing trips.

 8. Freight brokers earn more, especially if they have their own trucking company.

You probably know the freight industry better than the palm of your own hand. More importantly, you have an industry network that’s worth hundreds of thousands of dollars. Take advantage of this database of shippers and carriers. Add a freight broker service to streamline your trucking operations, improve customer service, and keep the commissions to grow your business rather than letting other freight brokers cut into your revenues.

 7. Freight brokers have 60-second commutes.

It’s the ultimate fantasy of those earning for a living: working from the comforts of your own home. Lunch is served hot and enjoyed for an hour, not on the run. And there’s only a one-minute walk to the fridge for some mid-afternoon energy boost. No time wasted getting stuck in an hour-long, traffic-riddled commute. Plus, you can sleep in on some days. What’s not to like?

 6. Freight brokers have low start-up costs.

Provided you have a good credit standing, you’ll need less than $3,500 to get started on your freight broker career–from freight broker training and licensing to setting up shop. Some of the freight brokers we’ve known began their lucrative careers with the dining table doubling as their work space. You have the flexibility of starting bare bones or dressing up your work area however you see fit. You’re the boss, it’s your call.

 5. Freight brokers spend as little as $400 monthly on their overhead expenses.

If you’re a one-man operation and you work from home, you’ll often find yourself saving dollars on overhead. Your time will be spent mostly on the phone–negotiating with shippers and carriers, researching and tracking shipments.

 4. Freight brokers earn as much as they want.

This is a booming industry and the only limit to your income is your commitment to success. There’s plenty of business to go around, especially with ecommerce flourishing. Shippers are sending out goods from warehouses and distribution centers more and more and this can only mean one thing for you: more opportunities to earn.

 3. Freight brokers have an ever-expanding universe.

The more your freight brokerage business is growing, the more you’re shoring up your smarts in the industry. And the more you’re building up your leadership, the more you’re acquiring new industry contacts who work anywhere from Seattle to Yonkers. Your universe as a freight broker is expanding exponentially…and so is your income.

2. You’re freight broker career is the start of a stable family business.

Once you’ve achieved success as a freight broker, there’s nowhere to go but up–including a robust business where the rest of the family can get involved. Your children can start learning the ropes; you can begin employing people you trust; and your business can end up becoming one of the valuable businesses in your state! The possibilities are endless.

1. Your freight broker career is a priceless legacy.

A viable family-run freight brokerage company is a valuable asset that can take care of your family for generations–whether they continue to run it or sell it at top dollar. It’s a positive win on all sides.

Clearly, the future for you is bright. Become a freight broker today!

5 Things to Know Before Starting Freight Broker Training

Before jumping in to freight broker training, it’s a good idea to learn the different skills, roles, and responsibilities of a professional freight broker.

The job of a freight broker will vary depending on whether you’re an independent broker, or you’re a freight broker who works for a larger transportation company.

However, generally speaking, these are the things that you will be responsible for as a freight broker agent.

Things to know before starting Freight Broker Training

Managing customer relationships

A freight broker needs to be good at building relationships. Successful brokers maintain close contact with their clients – both shippers and carriers. Building your contact list for both of these groups will play a big part in your success. You will want to be the first person that comes to mind for both shippers and carriers when they think about who to contact regarding work. Build great relationships and you will make your job as a freight broker much easier.

Communicating with shippers and carriers

Having strong communication and interpersonal skills is also important. You need to maintain regular contact with shippers and carriers. Shippers will need to be up to date how their shipment is progressing, and supplying them with appropriate and up to date information about their shipment will go a long way in building trust. Same thing goes for Carriers. You will want to make sure that you communicate with them about available work that you have for them. Make yourself a valuable resource of information for both parties.

Negotiating rates

This will be a big part of your job. Negotiating rates with shippers and carriers will determine how successful you will be. You always want to be fair to both shippers and carriers and you also need to make sure that you have enough margin for your services or company that you are profitable and are providing a valuable service.

Being up to date on the latest freight industry best practices

 The landscape of the transportation industry changes regularly. Whether it’s freight classifications, fuel surcharges, related legislation, etc. you need to be up to date as much as possible on everything that’s happening in your industry. The freight broker who can do the best job keeping their shippers and carriers up to date with the latest relevant information on the industry will bring great value to their business, and be a valuable resource.

Knowing and understanding industry terminology

Do you know what a bill of lading is? What about LTL? Do you know who the consignee is, or what intermodal transport is? The most successful freight brokers will be those who can speak the language of the business. You will need to know all the terms and lingo associated with your business.

Finally, you will need to be up to speed on all the relevant legal issues surrounding freight transportation. To be successful, make sure you cover all the bases, leave no stone unturned and be diligent in working with your shippers and carriers. Build yourself up as the go-to resource and you will be able to build a successful career as a freight broker.

Freight Broker Agent – How to Become a Freight Agent

Being a freight broker agent is a good job to start with if you want to build a career in transportation and logistics. Indeed, the transportation industry offers a rewarding future. It can turn out as a promising place for successful career and profitable business. In fact, many people have ventured into this business path due to several advantages. It is perfect even for those who do not have a college degree. A number of extensive trainings or classes plus a strong platform from experience are enough to begin potential source of income.

Many successful brokerage firms and individual freight brokers started their careers by being a freight agent. Prior to attending in-classroom and online classes for freight brokerage business, they worked with big agencies or trusted brokers for experience. This is actually essential to gain motivation and learn valuable tools for revolutionized approach.

What to do to be a Freight Broker Agent

If you have decided to become a freight broker agent, there are few requirements and standards you must conform with. To become a freight agent, you must establish good reputation from extensive experience in order to build your customer base.  You need to have a broad understanding of the subject by acquiring formal training such as freight class or truck brokerage license classes. Aside from enrolling in freight broker training online, you can also consider taking up a program from decent freight broker schools. This will help you understand how freight brokerage business works and know basic terminologies being used when doing transactions.

Legal processes and documents must also be settled if you wish to become effective in this field. Since most agents are working under the umbrella of a freight broker or a freight brokerage firm, you have to be knowledgeable on how to deal with disputes. You are also liable on having correct insurance, bonds and licenses. Good credit score so you can get loans to pay the carrier promptly is very important.

Freight Broker Agent Needs Experience

A freight broker agent has to establish a good portfolio by having solid experience in an industry related to brokerage and cargo. While gaining that experience, you must learn to keep a list of contacts for future brokerage endeavors. Remember that when keeping a list of contacts make sure to develop a strong relationship with them.

After garnering experience in the industry and cultivating contacts and prospects, you may also venture to independent brokerage. Just make sure that before entering in the industry as independent contractor, you are prepared on how to deal with shippers and trucking companies in all situations.

Freight Broker Agent – Tips on How to Become a Freight Broker Agent

As a third party intermediary, there are certain things to accomplish before becoming a freight broker agent. Here is the list of the things you have to remember and carry out to jumpstart your career in the freight brokering business.

Freight Brokering and Freight Broker Agents

  1. Experience in the transportation industry and working for manufacturer or trucking company is a natural first step. You will gain sufficient information and understanding about the whole operation if you have experience in the industry.
  2. Freight broker agent training and freight broker books available online will provide knowledge and strategies for marketing, sales, operations and licensing in the transportation industry. Taking advantage of online classes will help you practice and learn the fundamentals of the business.   Parallel to in-classroom training, you can obtain the overview of the career and the regulations surrounding the industry.
  3. Having strong communication skills is a plus factor to become a successful freight broker agent. You have to develop a far-reaching contact list. Having a network of shippers and truckers can help you build your customer base. By talking to them, you can establish a constant business relationship.
  4. Establishing a good reputation and proficiency in the field locally is also important. You can geo-target your business by focusing on a particular region or city. You can also evaluate the market demand for specialized services like heavy loads, perishable goods or fragile items.
  5. You have to discover your shipper’s needs and desires. Make sure you know how to cover all the bases with prospective customers by being thorough. Pay close attention to all the details like the time and place of pickup and delivery, method of transport, etc..

Tips for Freight Broker Agent on Handling Tasks

  1. Once the company hires you for assistance, you can then talk about your commission fee. You can check loading boards online each morning.
  2. Find a trustworthy trucking company that offer suitable services for the goods. You can also have agreement with various trucking companies to be your partner.
  3. You can send a contract to the trucking company containing all the information. They will need to sign off and send it back once they agree to take the goods.
  4. You can then call the manufacturer or shipper to let them know the schedule of pickup and delivery. Just make sure there will be no delays on the shipment by staying in touch with the driver to ensure everything is progressing well.
  5. Inform the manufacturer or shipper immediately when the goods have been delivered. You can pay the trucking company for the delivery service then send an invoice to the manufacturer or shipper for your fees.

You can be more occupied if you have your own freight brokerage company than working as freight broker agent. You must have excellent funds or good credit score to get loans that you may need to run the company. You have to pay the trucking service promptly. Insurance, bonds and licenses are also your responsibility.