What is a Freight Broker?

A freight broker is the person or entity that has authority to arrange for the transportation of a shipper's goods without ever having physical possession. A freight broker is the middle man in the transportation of goods. Often simply called the broker by drivers when they are not being called crooks, leeches and worse,lol. The name recognized by the feds on the books is actually property broker.

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Why do freight brokers get a bad rap? Well, there are a few bad apples that causes that problem with slow pay to drivers (already struggling owner operators usually) and excessively low rates in certain lanes.

Brokers can set the percentage they will charge for arranging freight.

If a broker wants to gouge a trucking company that is in an area where there are no other chances of getting load out he/she can.

Usually they don't abuse this leverage as standard business practice, but as I said there are bad apples as in any job.

There are also some unhappy and unrealistic drivers out there who are responsible for some of the rhetoric. Why? Because freight brokers actually do important work and provide a necessary service for many trucking operations. THEY SHOULD get a small cut for the work they do, how else could they exist to provide the service? If the trucking companies didn't need them they would not use them.

Drivers could send their wives or partner to broker training or go themselves or learn the ins and outs of freight brokering.  And enter the field themselves to cut out using another broker, instead they find it easier to bad mouth all brokers who DID put in the time, money and commitment to learn the trade.

(You see this poverty mentality in many areas of life...I digress...)

The most common comment is, "I am doing the work and they are sitting on their rears in a office taking a cut." Not a second's thought is placed on all of the work that is actually done in the office (or at home) in connection with the load that driver has hauled.

Don't get caught up in the hype of thinking all freight brokers are bad. That's just as ignorant as the mindset many people have, believing (or behaving as if) all police are bad or all drivers are cheaters or all people with dreads are thugs, etc.

Owner operators, it is smart to do what you can to make direct connections with shippers and receivers if you want to avoid the freight brokers. The good broker is simply filling a need for those without connections, often in bad or slow freight areas. Most of our (Our meaning the trucking company I drive for, not all truck drivers) backhaul loads are from Freight brokers.

Freight brokers are essential to the trucking industry and they will only become more needed as the economy recovers and manufactures need arrangement for the movement of more and more goods.

It's often cheaper for companies to outsource to Freight Brokerage Companies to get their products moved than to train their own employees for an additional task.

You can become a freight broker with the right training and guidance and the money to put up for a surety bond. If you don't have the $10,000 for a bond, you can still jump in as an agent for a freight broker after training. There are all types of freight broker training programs available online and at some training institutions.

I went to freight broker training at Transport Training America (now called Freight Movers School) a few years ago. I chose them because they are the first ones that I came across that had online freight brokerage training but also classes held in physical locations across the country.

I went to the Atlanta freight brokering classes. I would recommend them to anyone because the instructor was knowledgeable and funny and most importantly, seemed to want us to learn the material.

You know, sometimes people just want to get the class over with. The money is in the bank already. Seems they had a different mentality.

Also there was opportunity to put your training in practice upon graduation as an agent for them. An agent is someone who works under a freight broker.  Which could be a reason they actually want you to learn.

Becoming an agent is an excellent way for the wife or girlfriend of a trucker to get involved in the trucking industry and bring more money to the table. Especially if the husband is planning on becoming an owner operator.

The skills and experience gained pursuing the training for becoming a freight broker could be part of a plan for accelerated financial stability for the family and possibly a way for the trucker to eventually come off the road if so desired.

May be something worth looking into for the right spouse at home.

It does take the right type of person because there is a lot of paperwork, calling, following up. Once you build up clientele and a solid professional reputation the work becomes less of a challenge.

Basically it's just like many other start up as far as the dedication and persistence.

Where freight brokering differs from many other types of business is the flexibility and opportunity to work from home. If you build the business large enough, (get enough clients who decide you service is so good there is little reason to use others) you could have agents working for you while you handle your business and enjoy your family. 

Any bored, go getter, wives at home should at least look into freight broker to see if they would be interested.

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Freight Broker Training

When looking for freight broker training, there are several factors to consider to ensure you receive comprehensive and quality education in the field. Here are some key points to look for in freight broker training:

  1. Comprehensive curriculum: Look for a training program that covers all the essential aspects of freight brokering, including industry regulations, legal requirements, operations, sales and marketing, customer relationship management, and financial management.
  2. Experienced instructors: Ensure that the training is conducted by industry professionals or experienced freight brokers who have practical knowledge and insights to share. Their expertise will enhance your understanding of the subject matter.
  3. Interactive learning: Look for training programs that offer interactive learning opportunities, such as case studies, simulations, and real-world examples. This type of engagement can help you grasp concepts better and apply them in practical scenarios.
  4. Practical exercises and assignments: Hands-on exercises and assignments can provide valuable experience and reinforce your learning. Look for training programs that include practical exercises, such as creating mock freight shipments, negotiating rates, and managing documentation.
  5. Access to industry resources: Verify if the training program provides access to industry resources, such as freight databases, load boards, and software tools commonly used in the freight brokerage business. These resources can help you familiarize yourself with industry practices and streamline your operations.
  6. Ongoing support and mentorship: Consider programs that offer ongoing support and mentorship even after the training is completed. Having access to experienced professionals who can guide you through challenges or provide advice can greatly benefit your career as a freight broker.
  7. Reputation and reviews: Research the reputation of the training program and read reviews or testimonials from previous participants. Look for programs that have positive feedback and a track record of producing successful freight brokers.

It's important to note that while there are paid training programs available, there are also free or low-cost resources, such as online courses or guides, that can provide a good starting point for learning about freight brokering. Consider your budget and needs when choosing the training option that works best for you.

Sources:

  1. Guide: How To Become A Successful Freight Broker - DAT
  2. Freight Broker Training - DAT
  3. Freight Broker Training - Step-by-Step - | Udemy

How Freight Brokers Make Money

Freight brokers make money through commissions and fees earned from facilitating the transportation of goods between shippers and carriers. Here's a comprehensive answer to your question:

  1. Commission-based earnings: Freight brokers typically earn a commission based on the gross margin of each transaction. Gross margin is the difference between the price charged to the shipper and the price paid to the carrier for transporting the goods. The commission is calculated as a percentage of the gross margin. Freight brokers are paid based on the profitability of each individual transaction rather than the gross revenue [2].
  2. Fees and service charges: In addition to commissions, freight brokers may charge fees for their services. These fees can vary depending on the specific services provided, such as arranging transportation, coordinating logistics, managing documentation, and handling customs clearance. The fees charged by freight brokers contribute to their overall earnings [2].
  3. Building and maintaining client relationships: Freight brokers play a crucial role in developing and maintaining strong relationships with both shippers and carriers. By cultivating trust and reliability, freight brokers can attract repeat business and gain new clients through referrals. The ability to bring in new clients and manage existing accounts contributes to their income [1].
  4. Negotiating rates: Freight brokers negotiate rates with both shippers and carriers to secure the most favorable terms for their clients. By leveraging their market knowledge and industry expertise, brokers can obtain competitive rates for transportation services. The ability to negotiate effectively can impact the profitability of each transaction and consequently influence a broker's earnings [1].
  5. Advancing in the field: Freight brokers can increase their earning potential by gaining experience and advancing their skills. Managing experience and overseeing junior brokers can lead to higher compensation. Additionally, pursuing advanced degrees or certifications in logistics and supply chain management can enhance a broker's qualifications, income potential, and eligibility for promotions [1].

It's important to note that the specific earnings of freight brokers can vary based on factors such as geographic location, experience level, the size of transactions handled, and the overall performance of the brokerage firm. The information provided in the references indicates salary figures and compensation trends as of specific dates, but it's advisable to consult more recent sources for the most up-to-date and accurate information on freight broker earnings.

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Get training to become a freight broker online or in a classroom. Check with your local community college and if they don't have a program check out the school I went to.

Transport Training International

Want a more personal level of freight brokerage training?
Margurit O'Neal Suwanee, Ga.
Office 770-814-0977

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A job as a freight broker is another way to make money in the trucking industry. Freight brokers have flexible lifestyles and offer a needed service. That's why the need for freight brokers is so high.

You may hear some drivers complaining about brokers, calling them rip offs, etc.  As with anything else, there are shady brokers out there who cause these reactions.

If you find a name, number scribbled on a flyer in a truckstop, I don't think I would use that broker.

Using the services of reputable freight broker is also a safe bet. The reason freight brokering is thriving is because of the quality of service and need in the industry.

They DO however, have to get paid just like we do any business do so they charge a fee for their service.  It doesn't make freight brokers over all crooks.


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