Can a freight broker make millions?
The fact is, the freight brokerage business is very fragmented with thousands of brokers and the majority of freight brokerage firms does less than $5 million per year in sales. It's important to note that while gross revenue is great, the key lies in running a profitable and sustainable business.
Annual Salary | Monthly Pay | |
---|---|---|
Top Earners | $106,134 | $8,844 |
75th Percentile | $80,800 | $6,733 |
Average | $64,828 | $5,402 |
25th Percentile | $51,700 | $4,308 |
Rank | Company | Net Revenue (Millions) |
---|---|---|
1 | C.H. Robinson Worldwide | 1,793.0 |
2 | Total Quality Logistics | 1,394.0 |
3 | Coyote Logistics | 710.0 est |
4 | WWEX Group | 837.0 |
Yes, freight brokers can indeed make 7 figures – many have successfully grown 6, 7 and even 8 figure businesses.
High Demand and Growth
According to the U.S. Bureau of Labor Statistics (BLS), industries that hired the most cargo brokers include: Freight transportation arrangement (52,450 jobs) Couriers and express delivery services (7,570 jobs)
According to Indeed.com, the average national salary for freight brokers is $62,105 plus about $28,000 in commission per year. The average starting salary is solid, too, at around $40,000, with unlimited opportunities for commission.
Freight brokers make their money in the margin between the amount they charge each shipper (their customer) and what they pay the carrier (the truck driver) for every shipment. Although it varies from one transaction to the next, healthy freight brokers typically claim a net margin of 3-8 percent on each load.
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.
The terms "freight broker" and "freight forwarder" are often used interchangeably when people are discussing the movement of goods.
How stressful is being a freight broker?
Yes, being a freight broker is stressful.
This, combined with the significant amount of work it takes to organize and manage shipments, often results in freight brokerage being a stressful job. However, many people find this stress worth it for the money they earn and the freedom of being their own boss.
- Lack of control: When you use a freight broker, you're giving up some control over your shipping process. - Dependence on technology: Freight brokers typically rely heavily on technology, so if there are any problems with their systems, it can cause delays in your shipments.
The estimated total pay for a Freight Broker is $131,322 per year in the United States area, with an average salary of $85,733 per year. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users.
- Expand Within Your Clients' Companies. ...
- Look Up and Down the Supply Chain. ...
- Make Cold Calls. ...
- Utilize Social Media. ...
- Create a Referral and Rewards Program. ...
- Reach Out to Similar Businesses. ...
- Offer to be a Backup. ...
- Offer a Free Audit.
The average age of freight brokers is 40+ years years old, representing 54% of the freight broker population.
2024 has started with strong volume growth for the North American intermodal market. Through March the market has shown an 8% y/y growth. Part of this growth is due to weaker 2023 figures and the other is due to an increase in international and port volumes.
- Load Boards. This is one of the most common ways brokerages find loads. ...
- Referrals. ...
- Actively Seeking Out New Shippers. ...
- Cold Calls. ...
- Warm Calls. ...
- Online Tactics. ...
- Targeted Marketing Campaigns. ...
- Partner with BlueGrace.
In conclusion, freight brokering is a job that can be both hard and lucrative. To do well as a freight broker, you should put a high priority on building strong relationships with your clients. You should also answer questions quickly, know your costs inside and out, and keep learning more about the business.
They are market experts – Top performers are always experts in their fields, which means they take time to learn and cultivate their knowledge. Freight brokers become experts using all the data and analytics tools they can find, pull all the information together, and advise their clients as experts.
- Landstar System.
- Total Quality Logistics.
- Echo Global Logistics.
- Nolan Transportation Group.
- Coyote Logistics.
- Arrive Logistics.
- Ascent Global Logistics.
- RXO Logistics.
How do freight brokers find rates?
To get shippers, the freight broker will need to understand that the rates are ultimately determined by supply and demand. To be more specific, brokers calculate freight rates as a ratio between trucks and loads in any given area or lane.
The average margin under 250 miles sat at 15.2%. The 1,000-plus-mile haul segment sees just 11.7% average margins for brokers.
Depending on your expertise, your salary range can be anywhere from 10% to 35% commission for each truckload. Ultimately, the average broker ends up getting margins of around 15%. This percentage is a portion of the total amount of money that customers give you. So, how much do freight brokers make?
Freight brokering can be a highly profitable business. Brokers typically earn a commission on every shipment they arrange, which can range from 10% to 30% of the total shipping cost. With high shipping volumes, the profit margins can be substantial.
While it is uncommon, yes, a trucking company can broker loads if it possesses both FMSCA motor carrier and property brokerage authority. Trucking companies that possess both authorities are a one-stop shop for customers.
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