How Much Do Freight Brokers Make?
Freight brokers are integral to the shipping industry. Helping to get cargo from point A to point B quickly and efficiently, they allow shippers to fulfill orders and truckers to maximize their earning potential, all while keeping the supply chain moving smoothly.
Because the freight broker business is so important, professionals working in the area are able to make a good income. The exact amount a freight broker earns will depend on their location, the number of clients they work with and their years of experience but, in general, the salary range for the profession is in line with the national average.
So, how much do freight brokers make? and how can you get into the freight brokerage business? Keep reading to find out.
How Are Freight Brokers Compensated?
Freight brokers act as the middlemen between shippers and carriers. When a shipper contacts a broker looking for freight transportation, the broker uses their network of trusted contacts to find a trucking company to move the cargo to its destination.
According to the Bureau of Labor Statistics (BLS), the national average wage for a freight and cargo broker in 2021 was $48,420. The top 25% of brokers earned more than $59,380 per year while the top 10% earned over $69,450.
The main way that freight brokers are compensated is through freight broker commission. Freight brokers earn money by charging shippers more than they pay their carriers. The exact commission rate varies between brokers. Often, a broker will work with a freight broker agent to find more clients and arrange shipments. In these cases, the agent will also take a commission for every load they arrange.
Factors That Influence Freight Broker Income
One of the main factors that influences freight broker and freight agent salaries is location. Figures show that the average income of a licensed freight broker in Arkansas is an impressive $71,220 per year. While in West Virginia, someone doing the same job earns an average of just $37,750. In New York, the average freight broker salary is $45,310, in Illinois it’s $66,448 and in Kansas it’s $75,686 per year.
Another factor that impacts on the amount freight brokers can earn is experience. Generally, the longer someone is in the freight brokerage business for, the more clients they’ll have and the better their reputation will be. This will allow them to move large amounts of freight, offer competitive prices and enable them to earn a good base salary.
Last but definitely not least, the number of shippers and carriers a broker works with has a significant effect on their earnings. The more trucks a broker has access to, the easier it will be for them to offer a smooth, integrated supply chain to their clients. This in turn should attract more shippers and help the broker to build up their customer base
How Can a Freight Broker Increase Their Income?
Brokers can increase the amount of business they do by offering high tech features like load boards. This specialist freight broker software makes it easier for drivers to find loads and manage their routes. It can help to prevent deadhead journeys and allows truckers to maximize their income.
Because freight brokers are an integral part of the transportation industry, they’re in demand across the country. Relocating to a state with more earning potential – and choosing somewhere with a low cost of living – could see freight brokers significantly boost their income.
Employing broker agents can also help to improve business. Agents do the same work as brokers but don’t require a freight broker bond or a broker license. This means that they have to work under a broker in order to be compliant with regulations. Agents take a commission on each shipment they arrange.
Should I Become a Freight Broker?
If you think a freight broker job could be right for you, one of the first things you’ll need to do is register with the Federal Motor Carrier Safety Administration (FMCSA). This is the body that will issue you with your freight broker license. In most cases, you won’t need a bachelor’s degree to get your license, however you may need to undergo basic freight broker training before you can begin operating.
Before you can get your license and start working, you’ll need to arrange a freight broker surety bond. This is one of the most important steps in how to become a freight broker as you won’t be able to get a license if you’re not bonded.
The bond you’ll need is called a BMC-84 bond and is designed specially for freight brokers. Once you’ve arranged your bond, you’ll be able to get licensed and get started on your new career.
Whether you’re an independent contractor looking for a new challenge, or a dispatcher who wants to get licensed and move up the professional ladder, becoming a freight broker could be right for you.
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