Freight agents: what is the difference between brokers?
The main difference between freight brokers and freight agents lies in the hierarchy: who works for whom. At first glance, freight agents have duties and functions similar to the ones brokers have. Agents do whatever is necessary to arrange freight deals between shippers and carriers. At the same time, agents work for brokers, not vice versa.
It means that freight agents are independent customer-centric intermediaries whose task implies providing freight brokers with info about both shippers and carriers. Making clear connectivity between customers and transport vendors is the main value of the agent’s activity.
In contrast to brokers, freight agents do not need any license to work. They bear liability for neither cargo nor transportation. They work under freight brokers who are responsible for the entire freight deal.
It may seem that agents are lucky guys who make money from thin air. Far from it, in fact. They share full responsibility with brokers once they both act as a team. No, nominally agents don’t take legal responsibility, but any respectable broker can hardly accept the service of an agent if the latter behaves recklessly. Besides, maintaining continuous communication with both shippers and carriers along the entire freight deal is a very stressful activity that costs agents many grey hairs.
How much freight agents earn
A percentage-based commission and fixed hourly salary constitute the two main types of freight agent income. Freelance agents prefer taking a commission on every deal mostly while employed agents are paid an annual salary. A hybrid combination of both incomes is not rare in the sector as well. According to a survey among freight agent employees, the average annual salary of US freight agents is about $58K.
In both cases, brokers pay their agents. In the case of commission percentage, brokers often don’t mind paying half of their spread to agents. Needless to say that this is a decent earning opportunity for agents.