What is a Freight Broker and their role/responsibilities?

 

A Freight Broker is a middle man/intermediary between those who have products or freight (shippers) and those who transport them (carriers).  It takes drive, initiative and strategy.  Brokers are a core link within one of the most vital industries in the US economy:  Transportation and Shipping/Receiving.

 

How to Succeed as a Freight Broker

 

So, how can you know if you’re good enough for the job?  Being a skillful broker begins with having great people/analytical skills.  It’s good to make trusting and productive relationships with all of your clients, as well as to have an attention for detail in finding the most efficient connections between shippers and carriers.  It’s this combination of skills that leads to successful freight brokering. 

 

Also, remember these three (3) points that may be helpful to you when you are just starting out as a freight broker:

 

1. Niche – find a specific niche or type of manufacturer or product that a shipper specializes within and focus on that.  Do not be everywhere and all over the place.  You want to become skilled in just a few specific areas of the shipping industry.  That way, you will begin to master those areas and build up your customer base more efficiently.

2. Leads – shipper leads are all over the place, starting with online searches.  Begin to look to them and call inquiring about how you can assist them in moving their freight for them.

3. Association/Membership Meetings – there are plenty of shipper/manufacturer associations that have meetings quarterly, monthly, etc.  Attend those meetings, introduce yourself, and shake hands with them explaining who you are and what service you can provide for them and their capacity.  Know your role before going to these meetings.

 

It’s also becoming common for owner operators to become freight brokers as well.  This allows them to broker their truck and excess freight to other carriers as an additional source of income and added flexibility.  They also have the advantage of already being in the industry and having many shipping connections.

 

Freight Broker Role/Responsibilities/Daily Duties

 

Some of the main duties and responsibilities of a freight broker revolve around cold calling shippers and getting them under contract.  Shippers are the ones who sell the loads/freight either directly to a carrier or use a freight broker to help them move their loads. 

 

Say, for example, a shipper has a target rate on a load of $5000 (this amount is the most that the shipper is willing to pay).  The freight broker wins the bid for the load.  The freight broker takes their markup price off the top of the load (say 15% or $750) and then re-sells the load to the carrier for $4250 ($5000 - $750).  This is one way of how the process works. 

 

Also, maintaining a steady daily workflow of freight brokering, including posting loads (on load boards), setting up carriers under your brokerage (through carrier packets, approval through compliance, and rate confirmations), and finally booking loads and invoicing.

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Freight Agent Role/Responsibilities/Daily Duties

 

The role, responsibilities and daily duties of the freight broker agent is simple and similar to that of the freight broker.  Agents generate customers (shippers), solve their freight needs by moving their loads, making sure everything is smooth and timely.  Different types of paperwork, such as simple contracts between the shipper and brokerage and the broker/carrier agreement are the responsibility of the freight agent.  Checking safety records of carriers and credit ratings of shippers is also a duty of freight agents.  Billing payables and receivables is also a function that freight agents take on.  Freight agents follow the 4 R’s.  Freight agents do not have legal compliance (FMCSA and IRS) or financial responsibilities (authority, bond/trust, processing agent and insurance).  These legal and financial obligations fall upon the freight broker.