Shipment businesses work at a huge scale today across the world. There are so many players that are responsible for the success of the whole shipment process. Among them, one of the key players is a freight broker. If you want to understand the role of a freight broker properly, then continue reading this as we explain the complete role of a freight broker.
What is a Freight Broker?
It can be described as an individual or an entity that acts as a middleman between the shipper that needs to send or ship goods and an authorized carrier. To put it simply, a logistics freight broker or any freight broker is considered a transportation intermediary.
A transportation intermediary is neither a shipper nor an asset-owning carrier, but it plays a vital role in the movement of freight. Interestingly, there are no limitations to the size of operation that a freight broker manages. It can be an individual entity running a home office, or it could be a massive company with thousands of employees and with million dollar capital. It is their responsibility to fulfill legal and statutory aspects of the shipping industry. They have to ensure that their truckers safely deliver the cargo. Also, they are responsible for making payments to truckers and collecting that from shippers.
Requirements of Becoming a Freight Broker
- A freight broker must have a Federal Motor Carrier Safety Administration (FMCSA) motor carrier authority.
- The broker must have a surety bond of $75000
- Brokers can come from any industry. However, data indicates that mortgage brokers and auto brokers usually are more successful than brokers from any other industry.
- They must be skilled in relationship sales.
Benefits of working with a Freight Broker
There are numerous benefits of working as a freight broker here as follows:
- Brokers have Bonds and Licensing in Hand
It is a timely process to operate as a broker. However, if you are an agent you can work under the broker’s authority almost immediately. Brokers already have a long list of important documents such as insurance, surety bonds, and licenses. Therefore, you just have to shift freight and get paid.
- Brokers have an Established Network of Carriers
A long time of work experience allows the brokers to have a great network of owner-operators and truckers. Thus, you can easily focus on finding new business and clients knowing that you already have trucks available to carry those loads.
- Brokers Pay on a Predictable Payment Schedule
One of the great benefits of working with a broker is that it helps you to be financially stable. Agents working with brokers have the perks to get paid timely and enjoy large no of commissions along with the base salary.
- Work with Multiple Brokers
Agents can work with any number of brokers. An agent can work with as many individuals or companies they like as they deem fit. It is totally a choice of an agent to increase the number of brokers they work with and earn more income by choosing additional partnerships.
Other Key Players in the Industry
It is not just the freight broker that is responsible for the whole shipping process, but there are many other key players as well that have a massive contribution to the industry.
- Shipper
An individual or a business that wants to move their freight.
- Carrier
A carrier can be described as a company that provides transportation for goods. Carrier companies are further of two types. One that is private and provides transportation of its own cargo and another one is for hire that moves freight of others in exchange for providing transportation services.
- Freight Forwarder
Freight forwarders are different from freight brokers. Forwarders take possession of goods and accumulate several other small shipments to make one larger shipment. They arrange for the transportation of those shipments using different shipping methods such as air, water, and land.
- Import-Export Broker
They are the facilitators for importers and exporters. They play the role of middlemen between the exporters and importers. They have contact with US customs, government agencies, and every other organization or company involved in international freight transportation.
