A freight broker is a middle man or woman that communicate and encourages a carrier and shipper to work together. They are key players in the lucrative trucking industry.
Especially now that e-commerce is rapidly growing, freight brokers are becoming more in demand than ever. Trucking will never go down and brokers are going to benefit even with the pandemic.
The jobs and responsibilities of a freight broker are crucial in the corporate and economic landscape of today.
For those who are thinking about entering a freight broker career, here are all the facts that they need to know.
What does a freight broker do?
A freight broker acts as a bridge between two companies that specializes in selling transportation and shipping services for goods.
The scope of their job involves organizing transportation for the shipment of goods, tracking shipments, ensuring safe arrival, record-keeping, and collecting payments.
Freight brokers spend day-in and day-out in an office, answering phone calls and organizing transport services.
They are commonly viewed as a category of sales workers who generate leads, negotiate prices, and commissioning a carrier for the transport of goods.
Most freight brokers have flexible working hours and have the freedom to determine how their goals are achieved.
Responsibilities of a freight broker
- Generating sales leads for themselves as an independent broker or for their brokerage firm.
- Collecting and recording information relating to goods and its transport
- Negotiating prices, preparing quotes, and collecting payment
- Finding a carrier to transport goods
- Tracking the shipment and ensuring safe and complete delivery
- Managing and resolving issues and exigencies during shipping
Freight broker salary
A freight broker earns money by means of commission. They take the difference between what the shipper pays and what the commissioned carrier accepts as payment.
Those employed in a brokerage firm also earn a base salary on top of his or her commissions.
The average base salary of a freight broker in the US is $61,790 per year, with additional compensation of $28,400 per year in commission.
Requirements to become a freight broker
Freight brokers are essentially sales workers, which means that effective sales and negotiation skills alone can make a person qualified for the profession.
However, some firms and industries require certain licenses and professional requirements.
The minimum educational attainment needed to become a freight broker is a high school diploma or GED. Some firms prefer workers who have a bachelor’s degree in business or any related field.
Hence, those who have completed a college education may be more competitive as a candidate.
License & Certifications
Because freight brokers operate as sales workers, there are certain licenses and certifications that need to be obtained — whether they work as independent brokers or join a brokerage firm.
There are also other certifications that professionals working in this career can obtain in order to make them more competitive in the industry.
Some of the common freight broker certifications are:
- BMC-84 Bond – Independent freight brokers need to ensure that they are covered by a form of insurance in case the goods are lost or damaged during transit. That’s where the BMC-84 Bond comes in. It’s a broker bond that independent freight brokers purchase to cover loss or damage of goods on transit.
- BOC-3 – The BOC-3 form is only required for freight brokers who want to operate as a business. It allows them to allocate a process agent that will receive and take charge of legal filings against their company.
- Certified Transportation Broker (CTB) – Brokers who have been in the industry for several years or those who enter with high educational attainment are eligible to take the CTB course. In the course, professionals are taught about the industry and build their sales and operational skills. After the course, a broker needs to take a long exam that will test their basic knowledge about the industry, the job, and responsibilities. Only passers are awarded the professional CTB certification.
- USDot Number – A USDot number is a legal requirement issued by the Federal Motor Carrier Safety Administration. It is meant for monitoring compliance with rules in the profession for those involved in interstate and intrastate commerce.
- FMCSA License – After obtaining a USDot number, a professional can apply for an FMCSA license. This is required to operate as a freight broker.
Freight brokers who are employed by brokerage firms undergo training before operating on the job.
These training sessions are often technical, onboarding new employees with corporate rules and teaching them how to use the company’s software.
Skills to excel as a freight broker
A freight broker is a professional who wears many hats. Anyone entering this field needs to be knowledgeable about the industry, and at the same time possess hard and soft skills to be effective and competitive in the career path.
Some of the various skills a freight broker should have include:
- Communication – The crux of a freight broker’s job is to be a middleman for two companies. Hence, they need to have excellent communication skills to be able to sell, negotiate, and inform both parties about the progress of the shipment.
- Interpersonal Skills – Freight brokers work with a variety of different people, from companies to carrier services. The ability to form good relationships is a crucial skill that can help them acquire clients, negotiate rates, and resolve problems.
- Negotiation – A freight broker earns a commission for every shipment, the amount depending on what the shipper is willing to pay and what the carrier accepts as payment. Hence, they need to be able to negotiate rates in order to gain profit and manage the cost of the shipping process.
- Problem-Solving – There are so many complexities and issues that can arise during the transit of goods. A freight broker is in charge of managing and resolving exigencies such as delays in shipment, damage or loss of goods, etc. An excellent freight broker is able to prevent or resolve these issues and make sure that all parties are happy.
- Sales and Marketing – These professional skills help a freight broker obtain clients and make a profit. They are also essential in meeting sales quotas for freight brokers employed in firms.
- Time Management – Freight brokers have flexible work hours. But even so, the shipment and arrival of goods have strict timelines. Individuals in this profession must be able to meet these deadlines and ensure on-time delivery.
Freight brokers are critical in today’s economy. In fact, there is a high demand for them in the industry as companies are looking for ways to access carriers to transport their goods.
Anyone who is thinking about being a freight broker must meet these requirements and have these important skill sets in order to become successful in their chosen profession.