Freight Agent vs. Freight Broker: What is the difference?

The logistics and transportation industry offers many opportunities to grow your career and find success. In fact, many professionals find unlimited earning potential and a work-life balance that is determined by them.

Two logistics job titles that are often used interchangeably are "freight agent" and "freight broker." While there are similarities, the two positions operate differently. Below, GlobalTranz takes a look at these roles and tells you how they are different.

What is a freight agent?

A freight agent is generally an authorized party or individual that operates a logistics operation under the branding, and with the assistance of, a shipping company — typically a third-party logistics (3PL) provider.

What is a freight broker?

A freight broker is the middleperson between shippers, carriers and customers and provides logistics solutions for the pickup and delivery of products. They are often independent, and work with multiple 3PLs while managing their entire operation.

9 Differences Between Freight Broker vs Agent

Although a freight agent and freight broker perform many of the same tasks, there are some distinct differences between these two positions. Here are nine important ones you need to know about.

Licensure and liability

• Freight broker — Is licensed through the Federal Motor Carrier Safety Administration (FMCSA) and is legally responsible for the cargo they help transport.
• Freight agent — Does not require the same licensing and is not liable for cargo they help move.

Income

• Freight broker — Earns money through the margin spread between the sale price to the shipper and the freight cost of the underlying motor carrier.
• Freight agent — Earns its money on a commission it negotiates with its customer and the underlying asset motor carrier. Commission ranges from a 60/40 to 80/20 split.

Experience

• Freight broker — Must have extensive logistics/shipping experience, particularly working with freight shippers and carriers. They also should have experience in sales, particularly in transportation.
• Freight agent — Must have some logistics and freight shipping experience. Additionally, be entrepreneurial and/or have an impressive sales background to start a freight agency.

Shipping modes

• Freight broker — As the name implies, a freight broker specializes in freight shipping and provides less-than-truckload (LTL), full truckload (FTL) and other freight solutions to companies with shipping needs.
• Freight agent — Is backed by a 3PL provider and offers a full suite of logistics services including freight, managed transportation, specialty freight services, technology and e-commerce solutions — which allows them to work with a wider variety of customer types.

Marketing support

• Freight broker — Works independently on marketing plans, lead generation, website presence, social media and email marketing and makes decisions they feel are best for them.
• Freight agent — Often relies on 3PLs to provide sales collateral and other marketing resources. However, they do have the opportunity to augment or run their own marketing efforts, as well.

Back-office support

• Freight broker — Generally handles all office functions internally, including recruiting, hiring, billing, invoicing, accounting, customer service and other tasks. They do, however, have the option to work with a third party of their choice to handle these services.
• Freight agent — Gets support from a 3PL to handle back-office tasks such as recruiting, hiring, customer credit verifications, collections and invoice resolution, opt-in truckload service and more. This allows them to focus on their business and finding new customers.

Training

• Freight broker — Since they are often independent, they have to be self-reliant when seeking out continuing educational opportunities to advance their careers and stay on top of current trends in logistics.
• Freight agent — Receives training and development opportunities from their 3PL that enhance their current logistics skill level. This includes business coaching, networking opportunities and more.

Technology

• Freight broker — May get access to shipping technology from the logistics companies they work with to help them move freight, but generally selects their own, non-integrated CRM and other applications.
• Freight agent — Generally given access to shipping technology — including a transportation management system (TMS) and e-commerce solutions — that integrates with 3PL’s CRM platform. This creates a singular and seamless sales management experience.

Overall

• Freight broker — Relies on logistics companies for freight solutions and technology but remains highly independent in the way they sell and operate their business — that includes tasks like selecting and paying for their own health insurance. Freight brokers also are able to work with multiple logistics companies, define their marketing strategies and work with few restrictions.
• Freight agent — Works closely with their 3PL and utilizes its complete business kit including back office support, marketing, training and more. They also get nice perks like health insurance options for them and their families. However, they are free to grow their business and add employees and generally are not bound by geographic boundaries when seeking new business.

Other Freight Sales Opportunities

If your experience level does not fit into the freight broker or freight agent category, there are still opportunities for you to break into the logistics industry. With some minimal experience, particularly in sales, you can take advantage of the following opportunities:

• Freight Agent Sales — Freight agencies often expand their teams and are looking for motivated individuals for sales roles. This is a great first step toward owning your own freight agency.
• Corporate Sales — Many freight sales professionals work within a 3PL as a direct employee. There isn’t as much freedom, but this is a great way to learn the logistics industry and gain experience.