What Does a Freight Broker Do and Why They’re Essential

Every single day, over 53 million tons of freight move through the United States. This amasses to about $54 billion in value being moved by air, by rail, and by truck. According to the Bureau of Transportation Statistics, in the year 2022 in-house transportation contributed $835 billion and for-hire transportation contributed $912 billion to the US GDP.

The busy US supply chain consists of a large number of agreements between shippers and truckers, it is reasonable to say that increasing the efficiency of this connection and negotiation process can increase the overall efficiency of the supply chain. This is how freight brokers can act as a lubricant to the system because they can facilitate exchanges between shippers and carriers. This article will describe what freight brokers are and what they do in modern logistics and shipping.

What is a Freight Broker?

A freight broker is an intermediary that helps negotiate rates, supervise deliveries, and organize paperwork for transactions between shippers, receivers, and carriers. Brokers use a network of partners in the shipping industry, coupled with reliable software, to match up people wishing to ship items with the best-fit transportation service.

To complete their roles as freight agents, all brokers must obtain a license and possess extensive expertise in trucking and shipping services. With proper experience, tools, and skills freight brokers can optimize shipping cost, load capacity, and route efficiency while accepting a flat or percentage-based fee as payment.

What Does a Freight Broker Do?

A truck brokerage team or individual freight agent will facilitate the transportation of goods from one point to another. This can involve a broad range of skills and specialties. Some of the more essential tasks include:

• Carefully negotiating different freight rates to find the best possible solutions.
• Matching the best shipping partner with various load capacities, weights, and temperature-controlled settings.
• Actively tracking various shipments to keep all parties well informed (often in real-time).
• Maximizing the national (and global) supply chains for optimal efficiency.
• Double-checking all areas of logistics for full compliance with local, state, national, and international regulations or safety standards.
• Documenting all transportation and logistics needs that fall within their roles as freight brokers.
• Facilitating the payments for shipping and transportation needs between various stakeholders and providers.

There are freight brokers that complete specific job activities, meaning that some may prefer to only handle medical equipment while others deal only with cold freight (temperature-controlled goods). It all depends on where the freight agent thinks they can make the most money.

Why are Freight Brokers Essential?

The primary reason freight agents are crucial to the greater supply chain infrastructure is the efficiency in space, cost, and networking. There are approximately 3.5 million truck drivers in the US, so networking to coordinate truckers and people looking to have goods transported is fundamental. The smoother the movement of goods throughout the nation, the better it is for the economy. Some other benefits to consider are the following:

• Reducing Shipping Costs: A logistics broker learns how to best leverage a network of providers through negotiation that benefits everyone involved. These skills cultivate efficient cost administration.
• Increasing Shipping Efficiency: Optimizing the various capacities of different truck loads is crucial to what a freight broker does. From last-mile trucking to utilizing difference-sized vehicles, getting the most out of each inch makes a big difference in lowering expenses and streamlining services.
• Ensuring Timely Delivery of Goods: Today’s consumer marketplace demands quick delivery of goods. Sometimes that is time-dependent. Other times that efficiency creates better competitive advantages for suppliers, wholesalers, and other business models.
• Build a Reliable Supply Chain Network: Freight brokers live and breathe by the network of suppliers, shippers, logistics agents, and other transportation specialists to find an equitable arrangement. These networks fuel the global supply chain.
• Create Scaling Opportunities for Businesses: If a company suddenly grows from going viral on social media or a seasonal spike in demand causes a greater need for a trending toy, freight brokers offer the scale opportunities these entities need to maintain (and profit from) operations.
• Cultivate Enhanced Communication: Shipping and logistics have just as much to do with streamlined communication as they do with physical tires on the road. Freight brokers massage software and innovative technologies to ensure it meets and actively anticipates today’s supply needs.
• Help Problem Solve: The shipping industry is no stranger to sudden delays, challenges, and other roadblocks. Maybe a sudden storm in the Midwest causes issues with the East Coast receiving freshly laid eggs. Freight brokers offer solutions due to the vast networks and resources available, which they have grown over years of experience.

The point is freight agents are the linchpins in the operations of goods around the country. By serving as intermediaries, they create relationships that grow over time. Nearly all actors in the supply chain rely on these connections.

What Makes a Great Freight Broker?

The challenge of securing the quality relationships and connections needed for smooth logistics and shipping is finding an experienced and reputable freight broker. Luckily, some fundamental skills and credentials can help ensure that the chosen person will do a good job.

It’s important to always verify that the logistic broker is licensed. A freight broker should be licensed by the Federal Motor Carrier Safety Administration (FMCSA), have variable insurance, and operate under Unified Carrier Registration (UCR).

It helps to work with a shipping broker who has experience with similar items you are hoping to move. If you have a large quantity of medical supplies, choose a freight broker that understands temperature controls for different compounds.

Looking at online reviews is helpful, but word-of-mouth marketing is the better choice. An expert freight broker will have a strong network of transportation connections. It should be easy to find referrals and references, so you can have peace of mind.

One last point to consider is technology. To remain competitive today, a truck brokerage must use modern tools, often backed by AI (artificial intelligence), ML (machine learning), or other cutting-edge tools. No matter what, they should have strong communication skills and keep their clients well informed (in real-time) of the location of any goods.

Any Other Notes About Freight Brokers?

Two often overlooked aspects of freight brokers are the knowledge of different shipping methods and time management. There are a lot of moving parts when running an efficient freight brokerage. Without time management, these parts can quickly come to a halt, which causes a domino effect that may slow the movement of goods. Thus, freight brokers need top-quality internal management and communication to allow for accurate communications with their clients.

Secondly, shippers want to be matched with the right kind of carrier to transport their goods. Different trailer sizes or carrying capacities make a significant difference for overall cost and feasibility. Hence, brokers ought to be well-informed of the ins and outs of different types of shipping equipment.

Conclusion

The general importance of experienced and motivated freight brokers in the shipping, trucking, and logistics sectors cannot be overstated. The economy relies heavily on efficient and cost-effective transportation. When freight brokers succeed, plenty of money is made, and the overall flow of trade and commerce is more efficient.

Partnering with a skilled freight agent is an important strategic move for any business or shipping provider. Doing the homework ahead of time to ensure they are licensed, experienced, and ready for the job at hand solves many shipping challenges – leading to happier, repeat customers