How stressful is being a freight broker?
Being an Independent Freight Agent can be extremely demanding. If you're not careful, you might find yourself working over 60 hours a week! You should do everything you can to keep and maintain a regular work schedule. It helps provide structure, builds good habits, and will increase your efficiency.
Stay Up-to-Date on Regulations: The freight brokering industry is highly regulated, and it is essential to stay up-to-date on all of the latest rules and regulations. This includes understanding things like insurance requirements, bond requirements, and safety regulations.
On average, the yearly freight broker salary in the U.S. is $71,500 ($36.67 per hour). Entry-level positions begin at $45,000 per year, while most experienced professionals earn up to $107,500 per year. As a freight broker, you can start your own trucking business and become your own boss.
Further, the W2 model of freight brokering shows an even more dramatic statistic. Nearly 95% of newly hired brokers turnover within the first 6 months.
- 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.
Becoming a freight broker is a relatively easy and low-cost way to start a business. Still, from there, you're facing a steep learning curve, a fiercely competitive industry, and tight margins—a perfect storm for two-thirds of new brokers who fail in their first year. But it's not all doom and gloom.
The average age of freight brokers is 40+ years years old, representing 54% of the freight broker population.
The market size of freight brokerage reached USD 51.7 billion in 2023 and is set to witness 6% CAGR from 2024 to 2032, owing to the rise of e-commerce that has led to an increased demand for efficient and flexible freight solutions.
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.
Yes, freight brokers can indeed make 7 figures – many have successfully grown 6, 7 and even 8 figure businesses.
What is a good margin for a freight broker?
Again, the entire study showed about a 15% margin for brokers, which is in line with what the Transportation Intermediaries Association, the most prominent group representing brokers, has said in its most recent quarterly industry reports.
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.
While freight brokers generally are not liable for cargo claims (i.e. loss or damage to cargo), there are several ways brokers can become liable for cargo claims.
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.
Freight brokers typically work in dynamic and fast-paced environments, typically in an office setting. Some freight brokers run their own businesses and work for themselves, while others work for established brokerage firms.
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.
Freight brokers typically make 3-8% of what they charge for each load. Freight brokers make their money by charging shippers more than they pay carriers for each load. After they use some of this money to pay off their expenses, they usually have 3-8% left over as profit.
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.
Starting off 2023, there were roughly 300,000 active freight brokers, according to the Federal Motor Carrier Safety Administration. That was an all-time high.
Brokers must register with the Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) for brokerage authority. However, logistics brokers don't take possession of the freight. Freight brokers primarily handle shipments with U.S.-based origination and destination points.
What is the best paying freight?
Hazmat Hauling
The Hazmat industry has some of the best paying trucking companies. This is because Hazmat hauling involves transporting hazardous materials such as chemicals, fuel and explosives.
While freight brokering can be a stable profession, relying solely on one source of income can be risky during a recession.
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.
Freight broker commission is calculated on the gross margin of a booked load. You can determine gross margin by subtracting the amount the shipper is charged from the amount you (the broker) pay the carrier. The margin left over directly impacts how much money a freight broker earns.
The short answer is no. In the transportation world, brokers find loads for carriers. It's the trucking company that owns the trucks, while the shipper owns the freight that must be moved from point A to point B. Still, there's a lot more to explore when it comes to these transportation roles.
References
- https://www.aacargo.com/learn/highvalue.html
- https://www.zippia.com/answers/how-much-do-freight-brokers-make-off-each-load/
- https://corporatefinanceinstitute.com/resources/accounting/profit-margin/
- https://freightbrokerschools.org/strategies-for-building-and-growing-a-freight-brokerage-team/
- https://www.indeed.com/career-advice/career-development/how-to-become-freight-broker
- https://www.ibisworld.com/industry-statistics/number-of-businesses/freight-forwarding-brokerages-agencies-united-states/
- https://www.transflo.com/blog/outlook-for-freight-brokerages-2023/
- https://truckstop.com/blog/become-freight-broker/
- https://www.cloudtrucks.com/blog-post/10-freight-brokering-tips-for-success
- https://www.jwsuretybonds.com/blog/how-much-does-freight-broker-make-per-load
- https://www.atechlogistics.com/exploring-the-most-in-demand-types-of-trucking-in-todays-market/
- https://www.jwsuretybonds.com/blog/freight-broker-salary
- https://trinitylogistics.com/blog/freight-agent-versus-a-freight-broker-whats-the-difference
- https://www.pearceworldwide.com/blog/2023/7/31/do-freight-brokers-own-their-own-trucks
- https://www.atsinc.com/blog/how-freight-brokerages-make-money-explained
- https://www.shipmatefulfillment.com/post/the-pros-and-cons-of-freight-brokers-when-is-it-right-for-your-business
- https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Freight-Broker-Salary-by-State
- https://www.mordorintelligence.com/industry-reports/united-states-freight-brokerage-market
- https://www.ziprecruiter.com/Salaries/Freight-Broker-Salary--in-California
- https://www.zippia.com/answers/is-being-a-freight-broker-stressful/
- https://www.freightbrokerscourse.com/is-being-a-freight-broker-a-hard-job/
- https://www.bdc.ca/en/articles-tools/entrepreneur-toolkit/templates-business-guides/glossary/gross-profit-margin-ratio
- https://kchtrans.com/2023/11/29/the-rise-and-fall-of-the-freight-market/
- https://tai-software.com/how-does-a-freight-broker-calculate-rates/
- https://www.freightwaves.com/news/check-call-the-grim-future
- https://www.dat.com/resources/how-to-become-a-successful-freight-broker
- https://www.indeed.com/career-advice/pay-salary/how-much-do-freight-brokers-make
- https://www.quora.com/Is-it-possible-to-be-a-part-time-freight-broker-while-having-a-full-time-job
- https://www.talent.com/salary?job=freight+broker&location=texas
- https://targettrans.com/post/3-advantages-of-using-a-freight-broker/
- https://freightbrokerbootcamp.com/blog/how-much-can-a-freight-broker-or-freight-agent-earn/
- https://www.firststarlogistics.com/blog/benefits-of-becoming-a-freight-agent/
- https://www.firststarlogistics.com/blog/3-ways-freight-brokers-can-increase-commission/
- https://www.eagexpress.com/how-much-does-a-freight-broker-agent-make/tag/freight+broker+commission+structure
- https://www.firststarlogistics.com/blog/how-can-a-freight-broker-provide-value-to-shippers/
- https://getscalefunding.com/scale-funding-insights/current-freight-trends/
- https://blog.freightview.com/grow-your-margins-by-marking-up-your-freight
- https://resolute-logistics.com/blog/freight-broker-vs-dispatcher
- https://otrsolutions.com/is-trucking-recession-proof-an-in-depth-analysis/
- https://www.bryantsuretybonds.com/blog/cost-freight-broker
- https://www.gminsights.com/industry-analysis/freight-brokerage-market
- https://www.zippia.com/freight-broker-jobs/demographics/
- https://www.roserocket.com/blog/a-day-in-the-life-of-a-freight-broker
- https://www.nar.realtor/magazine/broker-news/7-habits-of-successful-brokers
- https://www.roserocket.com/blog/top-5-tested-marketing-strategies-for-freight-brokers
- https://www.hedgestone.com/is-freight-broker-a-good-business/
- https://www.atsinc.com/blog/carriers/best-load-boards-truck-drivers-and-carriers
- https://uwf.edu/continuinged/about-us/blog/top-4-reasons-to-start-a-freight-broker-career.html
- https://kopflogisticsgroup.com/2023/08/can-you-be-a-freight-broker-and-a-carrier/
- https://www.firststarlogistics.com/blog/10-reasons-why-you-should-become-a-freight-broker/
- https://www.smart-trucking.com/freight-shortage-2023/
- https://www.ziprecruiter.com/Salaries/Independent-Freight-Broker-Salary--in-Texas
- https://www.firststarlogistics.com/blog/proven-ways-to-find-shippers-as-a-freight-broker/
- https://wickerparklogistics.com/blog/how-to-be-a-successful-freight-broker-get-a-thriving-career
- https://www.bts.gov/archive/publications/freight_in_america/geography_of_us_freight_shipments
- https://ecapital.com/blog/what-truck-loads-pay-the-most-without-need-of-special-cdl-endorsements/
- https://www.eagexpress.com/how-much-does-a-freight-broker-agent-make/tag/freight+broker+profit+margin
- https://fuentesfirm.com/freight-broker-liability-for-loss-or-damage-to-cargo/
- https://www.penskelogistics.com/solutions/freight-brokerage/forwarder-vs-broker
- https://mybluegrace.com/how-do-freight-brokerages-find-loads/
- https://otrsolutions.com/best-paying-trucking-niche-in-2024/
- https://truckstop.com/blog/freight-broker-commission/
- https://www.linkedin.com/pulse/technology-replace-traditional-freight-brokerage-model-skip-kavanaugh
- https://www.overdriveonline.com/business/article/15661579/how-much-money-are-freight-brokers-really-making-from-truckers
- https://www.warriorlogistics.com/trucking-in-2024-the-most-in-demand-trucking-jobs-and-opportunities/
- https://blog.intekfreight-logistics.com/freight-exits-persist
- https://trinitylogistics.com/blog/what-exactly-is-a-freight-broker
- https://www.chrobinson.com/en-us/resources/insights-and-advisories/north-america-freight-insights/april-2024-freight-market-updates/
- https://www.glassdoor.com/Salaries/freight-broker-salary-SRCH_KO0,14.htm
- https://expressfreightfinance.com/freight-broker-pros-cons/
- https://www.freight360.net/starting-a-freight-brokerage-4-considerations/
- https://www.firststarlogistics.com/blog/how-to-find-customers-for-freight-brokerage/
