Freight Agent Versus a Freight Broker? What’s The Difference?

What is a freight agent versus a freight broker? Is one better than the other? How do they work together?

These are commonly asked questions of us. Being a freight broker who works with freight agents, we have experience with both. In this blog, we’ll walk you through what a freight broker is, what a freight agent is, how they compare, and how they work together.

WHAT IS A FREIGHT AGENT?

A freight agent’s primary role is to help arrange the movement of freight between their customers and carriers. A freight agent can be one person or group of people that work as an independent contractor under a freight broker’s operating license.

Unlike a freight broker, a freight agent doesn’t have their own operating authority and legally can’t arrange the movement of freight on their own. Therefore, the only way for them to do business is by working with a freight broker. Because of this, freight agents assume very little liability, as that lies on the freight broker.

Sometimes a freight agent may be called a sales agent since they often sell services for the freight broker they work with.

Freight agents earn money on a commission percentage that’s agreed upon between them and the freight broker.

While they often have their own culture, they represent the reputation of the freight broker they work with. So, freight agents want to make sure the culture of the freight broker they choose to work with is similar or aligned.

Freight agents are responsible for building their own customer base and book of business. Freight brokers will often have a clearance process in place to check that the customer is not already working with one of them or another freight agent with the company.

WHAT IS A FREIGHT BROKER?

Freight brokers are companies that arrange the movement of transportation between customers and carriers. 

It is a requirement for freight brokers to have a property broker license from the Federal Motor Carrier Safety Administration (FMCSA) and a surety bond for the minimum value of $75,000. They also need to carry the proper insurance. Freight brokers need to maintain a level of compliance yearly as guided by the FMCSA. The FMCSA requires that freight brokers keep all records on file for at least three years.

Freight brokers have the responsibilities of overseeing the invoicing of their shippers, paying their freight agents, working with freight factoring companies, and making sure their carriers receive payment for any loads moved. Freight brokers are also required to keep their records for three years and to hold insurance.

SIMILARITIES BETWEEN A FREIGHT AGENT VERSUS A FREIGHT BROKER

Freight agents and brokers can both be considered freight service providers. Both provide a high level of freight capacity and service, with many considering them to be problem solvers and logistics consultants for their client base. Both freight brokers and agents work to match available freight shipments from their customers with their carriers to optimize service and price. Both also negotiate with their customers and carriers on pricing to earn a profit.

DIFFERENCES BETWEEN FREIGHT AGENT VERSUS A FREIGHT BROKER

Freight agents have less liability in comparison to a freight broker. Freight agents need freight brokers to operate, whereas freight brokers can operate without freight agents.

A freight broker will have a more consistent brand look and feel across its office(s) versus freight agents that operate under the broker.

In comparison to size, freight agents are often smaller businesses, not always, but most often. While freight brokers are usually a much larger entity.

When it comes to daily tasks, freight agents only take care of finding their own customers and carriers and arranging their own freight. Whereas freight brokers do that and everything else, like invoicing, compliance, claims, credit checks, and more.

Freight brokers can offer other services like transportation management and technology. Freight agents have the opportunity to do that too, but those resources are only available based on the freight broker they work with.

WHY WOULD ONE PREFER TO BE A FREIGHT AGENT VERSUS A FREIGHT BROKER?

There are many reasons one might choose to work as a freight agent vs. a freight broker. For one, there is a much lower cost to being a freight agent because of the entire back-office support provided by a freight broker. This includes those tasks like invoicing, payables, receivables or collections, and curating marketing materials. It also consists of the larger costs like technology, such as a transportation management system to operate, cargo and liability insurance, the required surety bond, and contract management.

Additionally, a freight agent’s potential customer base may not like working with a small broker but would work with a freight agent knowing they are protected at a higher level by the freight broker they work under.

A freight broker also provides the freight agent with long-standing motor carrier relationships and contracts that are available to offer shipper solutions for them from day one.

Working as a freight agent would essentially simplify the business for them. Working as a freight agent allows them to focus on what they do best, cultivating customer relationships. In contrast, the freight broker handles many items a freight agent would otherwise have to operate, pay, and worry about if they were a stand-alone entity.

WHY THEY WORK GREAT TOGETHER

By working with a freight broker, freight agents get to focus on what they do best – building a strong customer base and servicing them with robust logistics solutions. In addition, small freight agents can quickly grow with the support and reputation of a well-known freight broker.

By working with freight agents, freight brokers can grow a nationwide or worldwide presence without building or obtaining office space. Additionally, freight brokers can see a growth in revenue by working with freight agents who work well at building new customer relationships.

TRINITY’S FREIGHT AGENT PROGRAM

Some people simply prefer tasks a freight agent has to complete versus a freight broker. They enjoy what they do and don’t want to worry about the rest of it. If that’s you, Trinity has a great agent program for those who like working more independently.

At Trinity, we have 30 years of experience aiding the success of our agents, with many seeing a 25 to 45 percent increase in their business over a two-year period from their initial start date with us. In addition, we offer many extras for our freight agent network, such as:

Continued Education Opportunities

We have an in-house Education Team available. Every month, they host virtual classes offered to increase sales skills, learn more about our logistics solutions, or help with technology. They also provide many virtual classes through our Learning Management System that you can take on your own time.

Technology

We offer many best-in-class applications and an entire Team of in-house software engineers, constantly striving to provide you and your customers with the best logistics technology available.

Agent Support Team

We also have a Team solely dedicated to assisting and encouraging our agent network. These Team Members work with you to help you set and reach your own goals, offer suggestions, and help you every step of the way. You’ll never fall behind or feel unsure with Team Trinity rallying behind you.

Consider joining our Agent Network today, so you can gain more time to focus on your customers, generate more revenue, and we’ll focus on everything else.

Author: Christine Morris