There are two main types of professionals when it comes to freight: the freight broker and the freight forwarder. While they may do some of the same things, there are some key differences between the two that entrepreneurs should be aware of before choosing which one to go into business with. This article will take a closer look at those differences and what they mean for freight brokers and freight forwarders.
Freight Broker
A freight broker is responsible for coordinating the transportation of goods and materials between suppliers and customers. They act as a middleman between the two parties, negotiating rates and ensuring that shipments are delivered on time. In order to become a freight broker, you must have a license from the Federal Motor Carrier Safety Administration (FMCSA). The average salary for a freight broker is $62,000 per year with additional compensation for commissions.
In order to become a freight broker, you’ll need the following licenses and registrations:
- Operating Authority (MC Number) from the FMCSA
- Business license from the state in which you operate
- Bail bond
- Surety bond
- Freight broker bond
- UCR registration
Freight Forwarder
A freight forwarder is a company that specializes in the coordination and shipment of goods and materials. They are responsible for ensuring that shipments are delivered on time and within budget. Freight forwarders must register with the Federal Motor Carrier Safety Administration (FMCSA). They must also have a license from the U.S. Department of Transportation (DOT). The average salary for a freight forwarder is $54,000 per year.
In order to become a freight forwarder, you’ll need the following licenses and registrations:
- Operating Authority (MC Number) from the FMCSA
- Business license from the state in which you operate
- Unified Carrier Registration (UCR) registration
Key Differences Between a Freight Broker and a Freight Agent
The main difference between a freight broker and a freight forwarder is that a freight broker must be licensed by the Federal Motor Carrier Safety Administration (FMCSA), while a freight forwarder does not.
Another difference between the two is that freight brokers typically earn a higher salary than freight forwarders. The average salary for a freight broker is $62,000 per year, while the average salary for a freight forwarder is $54,000 per year.
Finally, freight brokers are responsible for coordinating the transportation of goods between suppliers and customers, while freight forwarders specialize in the coordination and shipment of goods.
Conclusion
Choosing between a freight broker and a freight forwarder will ultimately come down to what services you need and what you’re looking for in terms of salary and responsibilities. If you need someone to coordinate the transportation of goods between suppliers and customers, then a freight broker is the best option. However, if you’re looking for someone to specialize in the coordination and shipment of goods, then a freight forwarder is the better choice. Whichever you choose, make sure you do your research to ensure that they are licensed and reputable.