What is a Freight Broker and Should You Become One?
Freight brokers manage the incredible logistic challenge of pairing people who want to transport cargo (known as shippers) with companies that are a) authorized to transport cargo, b) have enough spare room in their trucks and c) happen to be going to the same place that the cargo needs to go. The companies that transport things, commonly known as trucking companies, and better known as “carriers” in industry terminology.
Freight brokerage companies are a reasonable choice for a trucking-related business that a single person can start up, because some of them are one person shops (typically with one whiz-kid assistant for backup). Larger freight brokerages still frequently are one person shops, but the brokerage has agents spread across the country that handle different regions. Overhead tends to be low, especially compared to running a trucking business, because you can get by as a freight broker with a computer, a phone and a fax machine… and one thick rolodex of numbers.
Successful freight brokers tend to be people who know a lot of people, so if you’ve never even seen the inside of a trailer before, there might be better businesses to start. But if you’ve been a trucker for 3-5 years or more, and have meet an awful lot of trucking company owners and managers and shipping company owners and managers over those years, then a little training might put you in a nice position to start your own freight brokerage. Especially if you are good with computers and logistics, and if you have an excellent credit rating. Freight brokerage startups are not for people with terrible credit.
Your role as a freight broker is a “transportation intermediary”, which puts you into the same category as freight forwarder. Do not be confused, though, because freight forwarders are much more hands-on than freight brokers. Freight brokers basically make a lot of phone calls to make sure the right stuff gets on the right truck — they never take possession of cargo or load a truck. A freight forwarder will take possession of cargo, and will be the one to load the trucks. Freight forwarding is a much more challenging task with a lot more places for things to go wrong. Of course, there’s also a bit more money in it.
Another similar position to freight broker is an import/export broker. They do basically the same thing as freight brokers, but they get to work with the myriad laws, regulations, customs, permits, quirks, foibles and bizarre events that can happen in international shipping. If you like to travel a lot or have spent any extended time overseas, consider becoming an import/export broker. Or you can just keep things relatively simple and stateside and stay a freight broker.
If you want to work in a smaller pond than the entire US, you can specialize into being part of a shipper’s association, where groups of transport companies work together to perform the role of freight broker themselves, within their organization. Or you can specialize into being an agricultural frieght broker, which means you’ll coordinate shipments in just one area of the US, and work only with agricultural goods that do not require regulation.