Is being a Freight Agent right for you? - xpert

Trucking Inc.
Freight Agent Training
Is being a Freight Agent right
for you?
As a Freight Broker Agent you perform the
same duties as the “Freight Agent” under the
watchful eyed of the Broker
You are the responsibility of the broker,
everything you do as a broker needs to be
monitored somewhat by the Broker to insure
that it meets the guidelines of the FMCSA
You transactions as a Broker Agent are covered
by the Broker’s bond and BOC-3. The buck
stops with the Freight Broker so it’s important
to keep the relationship clean and error free
with each transaction.
You need to find a reputable honest broker to
work with. A reputable broker pays all parties
to your transactions and pays you your hard
earned commissions in a quick timely manner.
Prompt and timely payment is very important
to the success of broker agents, reason being if
you are late or checks bounce to your carriers
will go with the Brokers who pay on time.
This affects your bottom line and means that
you do not get paid on time as well.
Day to Day Operations
Lets say you decide to become a Freight Broker Agent, considered
to be a good and advancing field to be in. As we have indicated
being an agent is essentially the same as being a broker without
the fiscal or financial responsibilities associated with the shippers,
carriers, and you commission. With this being taken care of by your
reputable broke r you can focus on building you brokerage
business. This consists of several things that you need to do well
on a day to day basis.
Negotiation skills: First you need negotiation skills to work with
and build relationships with both shippers and carriers, as you are
negotiating price, timing, and details between the shipper, carrier
& broker. A good broker believes in strong personal relationships
with the customers as the essential component to sustain a
successful operation. As the broker Agent you carry the Brokers
torch to accomplish these objectives.
Trustworthy and Honest: Business credibility is a must and is
established by, the credit strength of the broker or 3PL, all bonds,
trust and insurance documents are in place. The rest is up to you
and your reputation to solve the shipping needs of your client’s
requirement as they arise on demand. Honest prompt
communication between all parties is a must have trait, even if the
news is bad such as the occurrence of a accident, truck break down
Day to Day operations Cont’D.
Have Great Carriers/ Trucker Sources: On the other hand in
order to ship goods you need carriers (trucks). The Broker Agent
and the carrier’s sign a broker/carrier agreement for load
It is important to work with reliable carriers who diligently
attend to the detail of moving the covered load. It is up to you
to develop well established carrier relationships.
This is done by, paying air market for carrying your loads,
prompt payment to your carrier relationships, keeping them
busy which helps them with their business including helping
with backloads to backhauls.
The Process: the Broker Agent establishes the relationship with
the shipper using the Broker’s credentials and correspondingly
establishes relationships with carriers who are available to carry
When a shipping order is taken the Broker Agent springs into
action to find the appropriate truck resource to move the goods
for the shipper from point A to B. Once the shipment is
delivered by the carrier the carrier bills the broker. The invoice
includes the bill of laden and many carriers want to be funded
at time of delivery (Brokers front this expense) The broker then
bills the shipper and collects the monies which is typically 30
days out, or net 30.
Expected Pay Commissions for
Independent Broker Agents
You need to be paid fairly for the efforts, skill,
experience, and clients that you bring to the job at hand
even when you are working under your brokers flag, this
is your business and livelihood. There are two types of
Independent Broker Agents: Commission- You can
expect to be paid 50 to 60% of the gross profit proceeds
of the transactions you bring in minus the carrier costs.
It is important that your contracted Broker has financial
strength to keep everyone paid and the relevant
financial institutions happy.
Employee Type Broker Agent: Depending on the type
and size of logistics company there are positions where
you are a direct employee, where most are compensated
with a base pay + commission. Note: If you have no
shipper clients or experience this is a good place to start
with, but often salary agents are under a non-compete
agreement which makes it difficult to transition to an
independent broker agent position because clients
remain with the company.
Expected Pay Commissions for
inDepenDent Broker agents Cont’D
The below graph results are from a voluntary survey of
industry specific segments conducted by (*
note keep in mind that most surveyed within the logistics
industry are from direct employee type companies.)
2010 Freight Agent Job - direct vs. commission salary plus
experience in truck freight brokering
Interpretation: Direct Freight Broker Agents with 5+ years’
experience; pull a higher average pay rate with a 3.5%
increase in salary.
Watch out for: When you see Brokers advertising
commissions higher that 50-60% make sure you read your
contract agreement carefully and do your due diligence on
the broker and his or her operation to insure they are credit
worthy. There can be no worse fate than to sign an exclusive
Broker Agent agreement with a Broker who is in financial
trouble. The failure of your broker to pay your carriers and
collect from your shippers will quickly torpedo your business
opportunities, prospects and reputation.
The best Freight Brokers are interested in your success as a
Freight Broker Agent and are available to support your
efforts with no hidden agendas or funny pay/commission
schemes. For example, we train you, you work for
considerably less than industry standard for a year or more
and more so, the exclusive or non-compete, work for hire
type contract which means that they own the client
relationships that you develop and you can't take them with
you if you want to go independent.
Consider the following when
looking into your Freight Broker
Agent positions:
• Does the Freight Broker have a good
Does the Freight Broker have a good credit
Do Freight Broker Agents like working with
the Freight Broker?
Is the compensation package fair 50-60%?
Does the Freight Broker offer tools and
resources to make your work easier?
Is the Freight Broker Agent agreement fair for
all parties?
(Most Important) Is the Freight Broker a
person you can see yourself working with
Does the Freight Broker offer assistance and
support if necessary?
Does the Freight Broker have a good
marketing plan to help support your
Answer these questions when you look to find
the best and most profitable operation for
your professional efforts.
Recommendation for those thinking
about being a Broker or a Broker
For Brokers: Most established Brokers were Brokers Agents at
one time. The complexities that go with running any business
require experience and know how. On the job training is the
best way to get the relevant experience to determine if you
have what it takes to be a Freight Broker.
So the recommendation to start as a Freight Broker Agent is
valid in that you can focus on one slice of the business that is
considered the most important aspect of the business,
relationship building. Once you establish your ability to do this
well you can then consider taking the next step to owning and
running your own independent Freight Broker operation. You
will find that many Broker Agents prefer to remain such and
leave all the other associated financial, administrative and daily
responsibilities to the Broker.
Broker Agents: New To Industry
While just starting out, with no contacts or book, no specialty
niche or you need the surety of a guaranteed check and benefits
a direct employee pay + commission might be the option for
starting out. Many who start this way soon find that once they
gain the experience, established contacts that it is financially far
superior option to work as a independent Broker Agent even
with buying their own benefits and office set ups.
reCommenDation Cont’D
Vertical Industry Experienced: Getting or having core experience as a
shipping clerk, dispatch agent, truck driver would be a good start for
independent broker agents because you’ve had contact & relationships
with shippers & carriers that you could bring with you. You will find a
job with a well qualified 3PL much easier with this experience in your
background. You could negotiate an on the job training period to learn
the administrative responsibilities, tools and methods as well as set up
your office and begin working with or marketing to your contact list.
You should
Make sure that you are not under a non-compete arrangement if you
intend to use the contacts you've made on the job.
Before you make the jump to independent agent, poll some of your
contacts to see if they would move their freight with you. This will give
you an idea if you'll have business to start with.
Company direct based Broker Agents or other 3PL experienced
broker agents: Before you make the jump into working as an
Make sure that you have the right to market or broker your current
client shipments. Meaning that you did not sign any legal documents/
non-compete agreements with your employer such as a work for hire
or that all clients that you serviced were proprietorial to the company.
Have a copy of your shipper data and carrier relationships - this is the
core of your business as a independent freight agent and how you'll
derive an income.
When applying for a independent freight agent position, be prepared
to demonstrate that you have active shippers and carrier relationships.
Know your numbers. Know what your average monthly gross profit and
margins are as this information further demonstrates your ability as a
freight agent as well as the logistics company potential support/
financial responsibility.
• In this hub page we have looked
into aspects of being a Freight
Broker Agent. In the process we
have covered the differences
between being a “Freight Broker”
and a “Freight Broker Agent” to
provide a foundation to consider
when entering the industry or
making the transition between
Freight Brokers.
• In addition we have tried to
dispel the myth that you can be a
successful Freight Broker in as
little as two weeks, we think it
could possibly be two years or
more depending on your
individual aptitude.

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