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

Freight brokers and freight agents are both professionals that work in the freight industry. They have a lot of similarities, but they also have some major differences. The major difference between these two is that freight brokers are independent contractors, while freight agents work for freight brokers. Read on to learn more about the difference between professional freight brokers and freight agents

Freight Agents and their Duties

Freight agents play a crucial role in the smooth running of the shipment industry. They don’t have the license and authority to operate on their own, and that’s why they work with freight brokers. They facilitate and organize the outgoing and incoming shipments in the various aspects of transportation such as railroad, airlines, truck, and maritime. 

They handle the fee collection, ensure that all important documents concerning the shipment are filled accordingly, and ensure the prompt pick up and delivery of shipment. They also perform other duties, such as

• Preparation and verification of tariff and custom papers.
• Tracking shipments and keeping clients updated on the goods in transit.
• They answer clients’ questions and guide clients into choosing the best shipping method that’ll comfortably meet their needs.
• Measure and record the weight and dimensions of the cargo. They also ensure that freights are properly labeled and ready to be transported.

However, freight agents mostly focus on their customers and carriers and prepare everything to ensure their clients’ freight is well taken care of.

Freight Brokers and their Duties

Freight brokers are intermediaries between people looking to ship their goods and freight shipping companies. They’re licensed, insured, and authorized to operate in the freight industry. They act as liaison officers that do the advertisement necessary to land new customers. Freight brokers do not work directly for any shipping company, but they have various freight shipping companies they can choose from for their clients. When they get a new client, they start by understanding their shipping needs and then find a carrier that can adequately meet their needs.

They take orders, negotiate rates, and ensure that shippers fill out the paperwork correctly and that the carrier gets all the prepared documents as soon as possible. Freight brokers also perform other duties, such as;

• Prepare the carriers for loading
• Ensure that the cargos are tracked, and they keep their clients informed about the progress of their shipments
• They make sure that all important information is communicated effectively between carriers and shippers.
• Invoicing and keeping inventory
• Measure the cargo and give a price estimate.
• Proper record keeping to ensure that the right freight is picked up and dropped off at the right location.

Freight brokers handle the underlying details necessary before, during, and after shipment. They handle everything from carrier storage, documentation requirements, postal cost, shipment cost estimation, and other logistics. However, a broker will typically charge their clients for these services through commission fees. Some freight brokers can also offer additional services such as warehousing, inventory distribution, storage services, rollout and supply chain fulfillment, and many more. All these additional services can be charged separately or included in their commission fee structure.

Types Of Freight Brokers

• Traditional freight brokers

This type of freight broker functions effectively by performing two separate tasks. One task is to find shippers, and the second task is to maintain good work relationships with shipment companies. They operate by finding a carrier for their client’s shipment, negotiating rates, and ensuring delivery to the destination on time. In most cases, traditional freight brokers get commissions from both their clients and the carrier company.

• 3PLs (Third-party logistics)

3PLs are somewhat different from regular freight brokers. They offer a combination of freight brokerage services as well as ensure the smooth running of the supply chain of their clients. They offer shipping, freight packaging, and warehousing and ensure that the freights are supplied to the right places. 

• Digital Freight Brokers

Digital freight brokers offer online services; the match-make shippers and carriers. When you visit their website or download the app, you’ll be asked to fill in the necessary shipping details, and the app will run swiftly to help you locate a carrier that’ll meet your needs at a reasonable rate.

• Access-based freight brokers

Access-based freight brokers have infrastructures such as airlines, trucks, and others, but they are also licensed to offer freight brokerage services. In other words, if their infrastructure is all booked up and they can’t meet your needs, they’ll outsource to one of their trusted carrier partners.

Both freight brokers and freight agents contribute immensely to the economy’s overall growth. However, if you’re looking to hire a freight broker, endeavor to consider the various types stated in this article so that you’ll be properly guided when making your choice.