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Freight broker agent: meaning

English

24 August 2021

When it comes to carry freight, there are so many things that could go wrong: delays, damage, miscommunication…A freight broker is the one that facilitates the communication between carriers and shippers, in order for the freight or cargo to arrive safely and on time to its destination.

What is a freight broker responsable for?

A freight broker is the one who provides and arranges the transport of goods by matching available transportation agencies and vehicles with specific cargo. Some freight brokers are as small as a single person that manages cargo arrangements for small companies and individuals. While others cater to bigger companies.

This means that they can be responsible for the financial aspects, such as: invoicing shippers, paying carriers, extending credit, assisting with claims… They are basically responsible for all the cargo arrangements that may include:

  • Cargo rate management.
  • Cargo monitoring.
  • Loading arrangements at specific times and locations.
  • Unloading arrangements at specific times and locations.
  • Monthly reporting dashboards.
  • Manage cargo services.
  • Warehousing and storage of goods while being transported.
  • Compatibility arrangements, so the cargo matches the transportation vehicle.
  • Arrangements between different cargo and delivery services.
  • Reducing the chances of cargo delays.
  • Cargo insurance between locations. 
  • Cargo safety standard implementation.

But is it the same as a freight agent? A freight agent is the one that generates sales by securing clients and could potentially eran an ni come based on the sales generated.

Freight broker

What is a freight agent?

Freight agents are business owners and work on commission under the authority of a licensed freight broker to coordinate cargo shipments. The role of a freight agent includes: sales, customer service and logistics. On a day to day basis, a freight agent’s tasks include:

  • Sales: this includes calling potential customers, negotiating cargo rates, sourcing carriers and negotiating with carriers and shippers.  
  • Customer service: this includes ensuring pickups, ensuring scheduled deliveries, keeping clients informed regarding the process of a shipment.
  • Logistics: this includes dispatching transportation vehicles and problem-solving issues that could affect a shipment’s pickup or a shipment‘s delivery. 

That being said, freight agents are commonly referred to as independent freight agents. These are different even if the tasks they do are the same. So, using the word “independent” only defines if the agent works as an employee or as an independent contractor.

Freight broker or freight agent?

Well, the principle difference between these two is that the first one is licensed through the FMCSA and is required to secure a surety bond, assuming the risk of granting credit to customers and more. Instead, the second one is not required to have a license or surety bond. In fact, it is not required to grant anything of the things listed above.

And what about a freight company?

A freight company, on the other hand, is the company that is in possession of all the delivery vehicles. These companies are the ones that transport goods and freight brokers usually offer to deliver to several cargo companies at the same time.

The best freight delivery companies are used for the delivery of loads and freight brokers use several freight companies for their transportation. This enables the company to reach more destinations a lot quicker and enables being capable of managing mass deliveries a lot quicker. All this by using different freight companies for deliveries which are able to reduce the cost involved in freight delivery.  

The services and benefits of a freight broker are incredibly hight and different from one another. Freight brokers are the ultimate intermediary to choose for your shipments and to secure your loads at the right time, in order to deliver them to their clients.

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