Freight Brokers vs. Freight Agents: What’s the Difference?
Becoming a freight broker or a freight agent is a smart choice for anyone interested in an exciting career, working from home and earning a good salary. These are careers with a lot of flexibility for earning and working hours, but they are not the same. Both are involved in matching shipping companies with carriers to move goods, but there are crucial differences you will need to consider before making a decision for your future career.
What Do Freight Brokers Do?
First, it’s important to understand what these careers are and what professionals in the industry do on a daily basis. Brokers and agents do similar work and have many of the same daily duties. Essentially, the jobs are related to finding carriers to help move goods for shipping companies. In this profession, you will match shippers with carriers while also managing the finances and other important aspects of transportation.
A freight broker may be an individual or a company, a small business with only a few employees or a large company with hundreds of workers. In any of these cases, the main roles of a freight broker are:
- Matching cargo or shipping companies with carriers and transportation companies to move their goods
- Negotiating prices for shippers and carriers
- Ensuring carriers earn a profit from moving cargo
- Organizing the moving of cargo and making adjustments as needed to get goods to destinations, undamaged and on time
- Billing clients and shippers
- Problem solving when things go wrong, such as missing cargo or damaged goods
- Tracking cargo
What Makes Freight Agents Different
The main difference between an agent and a broker is that the agent typically works for the broker. A freight agent may be an independent contractor or an employee, but because they work under the umbrella of a broker they don’t take on the liability for the work they do. Agents do the matching and negotiating and earn a living typically by taking a commission, or a percentage of the broker’s earnings.
Freight brokers have to be licensed through the Federal Motor Carrier Safety Administration, a part of the Department of Transportation. They also have to hold a surety bond and liability insurance. An agent does not have to carry these expenses, or liability, because they work under the authority of a licensed freight broker.
Agents may work for individual brokers, small businesses or large brokerage companies, and many work from home. The amount of money you can earn as an agent depends on how many shipments you negotiate, because pay is based on commission. This allows agents to have flexibility in their work, choosing their hours and how much they want to earn.
The daily work of a freight agent involves much of the leg work of brokering. An agent spends a lot of time communicating with shipping customers and the carriers who will move their goods, managing logistics, negotiating prices and problem solving.
The work of a freight agent is very similar to that of a broker, but there are crucial differences. For either career, you are not required to have specialized training or education, but brokers do have to be licensed and insured. For both types of career, it does benefit you to learn before you start working, but once you understand the business, you can choose to jump in as an agent or a broker.