There are two main jobs: the freight broker and the freight agent when it comes to freight. Both have important roles in the industry, but what’s the difference between them? This article will explore the similarities and differences between these two positions, so entrepreneurs can understand which one is right for them.
What Is a Freight Broker?
Freight brokers are professionals who help connect manufacturers and retailers with trucking companies. They act as a middleman between the two parties, and their job is to negotiate shipping contracts and rates. To become a freight broker, you’ll need to have a strong understanding of the industry, as well as excellent communication and negotiation skills.
Salary for a freight broker is typically based on commission, so the more contracts they’re able to broker, the more money they’ll make. They average around $60,000 per year, but top earners can make upwards of $200,000.
To become a freight broker, you will need to fulfill the following license requirements:
- Obtain a surety bond or trust fund account in the amount of $75,000
- Register with the Federal Motor Carrier Safety Administration (FMCSA)
- Complete the Freight Broker Authority Application
What Is a Freight Agent?
Freight agents are similar to freight brokers, but work for a broker rather than independently. Their job is to find new clients and business opportunities for their employer. They’re also responsible for negotiating rates and managing relationships with trucking companies.
Freight agents are typically paid a base salary, plus commission. The average salary for a freight agent is $40,000 per year, but top earners can make upwards of $100,000.
In order to become a freight agent, you’ll need the following licenses and registrations:
- Obtain a surety bond or trust fund account in the amount of $10,000
- Register with the Federal Motor Carrier Safety Administration (FMCSA)
- Complete the Freight Agent Authority Application
Key Differences Between a Freight Broker and a Freight Agent
The main difference between a freight broker and a freight agent is that brokers are independent professionals, while agents work for a broker. Another key difference is in the licensing requirements. In order to become a freight broker, you’ll need to have a surety bond or trust fund account in the amount of $75,000, while freight agents only need a bond or account in the amount of $10,000. Finally, freight brokers typically make more money than freight agents. This is because they’re paid on commission, and the more contracts they’re able to broker, the more money they’ll make.
Conclusion
Both freight brokers and freight agents play important roles in the industry, but there are key differences between them. Keep these differences in mind when choosing which position is right for you. Always make sure you have the proper licenses and registrations in place before beginning work. And remember, freight brokers typically make more money than freight agents. So, if you’re looking to earn a higher salary, becoming a broker may be the right choice for you.