Often, people confuse a freight broker and a freight agent as being the same. While there are key similarities between the two logistic careers, there are also stark differences. Knowing what sets these two apart is especially critical for people who want to enter into this profession. Without further ado, let’s take a look at each career path in detail.
What Is a Freight Agent?
The primary role of a freight agent is to build a network where they can sell services to customers and carriers. In addition, a freight agent can be a singular person or it can be a team of people working as independent contractors under a freight broker’s license. As such, they’re considered the sales agents in this industry.
Although they organize transfers, freight agents are not authorized to arrange shipments on their own. They often work on commission alongside freight brokers to complete certain projects.
What Is a Freight Broker?
On the other hand, a freight broker is a person or an organization that arranges transportation between customers and carriers. While the agent takes care of building the consumer base, the freight broker is responsible for completing transactions and ensuring that the transportation from the carrier to the consumer goes smoothly. For this reason, a freight broker needs to obtain a broker license from the Federal Motor Carrier Safety Administration (FMCSA), a bond with a value of at least $75,000, and the right insurance.
Compared to freight agents, brokers hold more accountability when it comes to overseeing the movement of transportation.
What’s The Difference Between Freight Broker and Agent?
Apart from their primary job descriptions, there are other differences between the two career paths.
In terms of salary, freight agents earn less money than freight brokers. On average, a freight agent can make anywhere from $37,000 to $50,000. Their salary depends on the commissions they get in a year and the skills that they can provide.
As for freight brokers, they have a national average salary of over $62,000 a year. This doesn’t count the compensation they get from commissions from their projects which can amount to around $28,000 annually. That said, if you want to earn more in the industry, it’s best to explore a path in freight brokering.
When it comes to daily tasks, freight agents only take care of one thing: finding customers and carriers and arranging their freight.
Freight brokers, on the other hand, need to contend with everything else, such as compliance, claims, invoicing, and credit checks. They can also offer more services like technology and transportation management to add value to their customers.
What Do You Want To Become?
If you want to get your foot at the door, starting as a freight agent can be the right move. But if you want to take it a step further, you can become a freight broker.
At Jansson, an independent agent of Landstar, we have the experience and tools to guide you toward the right career path. Check our logbook for articles, how-tos, and explainers for every corner of the logistics trade.