Freight Brokers and Agents

Here are some common things people wonder about when they think about freight brokers.

A freight broker is self-employed and has a broker authority. A freight broker will do his or her own invoicing to customers and will pay the motor carriers. Practically the freight broker runs a complete business.

A freight agent on the other hand, works for another freight broker and does not need to obtain a broker authority. The freight agent will work under the authority of his or her freight broker and is not responsible for invoicing or paying the carrier companies. And just like with most other things in this world, there are pros and cons to each of these options.

A fully self-employed freight broker is required to get their broker authority but they retain a hundred percent of the profit on each load. The freight broker is also totally responsible for invoicing the customer and making collections as well as paying the carriers. Having sufficient capital and good cash management skills are an absolute necessity to being a freight broker. Since time is required to run an entire business, the freight broker has relatively less time to search for new customers and find carriers.

A broker agent is not required to get his or her broker authority so this option is less costly. But the broker agent splits his or her commission on each load with the freight broker under whose authority he or she works. Most of the agent's time is spent searching for new customers and finding carriers.

In conclusion, as a broker agent, you don't need a broker authority because you work under the authority of another freight broker. The two fundamental differences are the scope of the duties and responsibilities and the fact that the broker agent does not need a broker authority.

For more resources regarding American freight or even about unclaimed freight and especially about freight trucking please review these pages.