What is the profit margin for a freight broker?
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?
According to a Freight Waves survey, the average commission is 13% to 15% of a load's net revenue. Example: A shipper pays $4,000 to a licensed freight broker to move a load. The freight broker negotiates $3,000 with the trucking company to transport the load, leaving $1,000 net revenue.
The national average salary for a freight broker in the United States is $62,105 per year , with an average additional compensation of $28,000 per year for commissions.
Yes, freight brokers can indeed make 7 figures – many have successfully grown 6, 7 and even 8 figure businesses.
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.
W-2 brokers typically earn a base salary with a commission directly tied to their profits. According to a recent Freightwaves survey, median pay in this model is $40,000 salary plus an average commission rate of 13.2% on gross profits.
- 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.
- Referrals. In answer to the question of “how do brokers find loads,” the number one answer is referrals. ...
- Make Freight Tracking a Priority. ...
- Load Boards. ...
- Warm Calls. ...
- Cold Calls. ...
- Advertising and Marketing Campaigns. ...
- Shipper Lists. ...
- Re-Engage Old Accounts.
- Broker. Salary range: $45,000-$131,500 per year. ...
- Commodity Broker. Salary range: $97,500-$112,500 per year. ...
- Energy Broker. Salary range: $60,500-$78,000 per year. ...
- Associate Broker. Salary range: $44,000-$73,500 per year. ...
- Stock Broker. ...
- Broker Assistant. ...
- Brokerage Clerk.
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.
What states have highest paying broker freight?
State | Annual Salary | Hourly Wage |
---|---|---|
New York | $73,975 | $35.56 |
Vermont | $72,702 | $34.95 |
California | $71,405 | $34.33 |
Maine | $69,342 | $33.34 |
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.
To be a successful freight broker, you can't stress about the things you can't control. When an issue arises, act quickly, solve what you can and communicate your solution with all impacted parties.
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.
The average age of freight brokers is 40+ years years old, representing 54% of the freight broker population.
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.
Annual Salary | Weekly Pay | |
---|---|---|
Top Earners | $97,210 | $1,869 |
75th Percentile | $74,000 | $1,423 |
Average | $71,405 | $1,373 |
25th Percentile | $47,400 | $911 |
Start social media accounts for your brokerage on platforms like Linkedin, Facebook, and Instagram to find potential clients and referrals. Include in your profile bio a one-liner about your areas of specialty, locations you service, and if you have a particular niche e.g. oversized loads to reach your target audience.
- Business registration.
- Freight broker license application.
- Freight broker surety bond.
- Insurance policies (optional)
- Office equipment.
- Brokerage software.
- Freight broker training.
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. The primary ways a broker can become liable for cargo damage are: The broker agrees to be liable for cargo damage via contract with its customer.
Why not use a freight broker?
One of the biggest downsides to using a freight broker is not having total control over the shipment. Once the load is given over to the broker, the shipper's ability to manage that load may be hindered. Freight brokers must make money somehow. They do that by charging more for a load than they're paying the carrier.
Insurance Documents: Carriers must provide proof of insurance coverage, including liability, cargo, and workers' compensation insurance. These documents assure brokers and shippers that carriers have adequate coverage to protect their interests.
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.
- Researching Competition. ...
- Studying Purchase History and Former Customers. ...
- Cold Calling. ...
- Using Shipper Lists and Calling Leads. ...
- Browsing USDA Business Listings. ...
- Utilizing Online Search Engines.
- Talk with trusted carrier partners. ...
- Broker load boards. ...
- Digital freight matching. ...
- Check the carrier base in your TMS. ...
- FMCSA data. ...
- Internet search. ...
- Cold calling. ...
- Search carrier directories.