The Changing Role of a Freight Broker

The Changing Role of a Freight Broker

The Changing Role of a Freight Broker

Freight brokers act as middle-men between the buyer, owner or shipper of a product and the trucking company responsible for movement of freight. Such entities or organizations bring together a shipper that needs transporting merchandise with a certified motor carrier that intends to provide these services. Therefore, they fall in the category of transportation intermediaries. Thus, these companies are neither an asset-owning carrier nor a shipper, but play a significant role in movement of freight from one place to another.

The brokers accept an order for load that has to be moved from a customer. They also arrange for transportation of goods by locating carriers that enable the movement of load. The revenue of a broker is generated by paying the freight carriers less than what they are paid by customers. This is called profit margin or broker's margin.

A freight broker offers an important and useful service to both shippers and motor carriers. They assist shippers in finding a trustworthy motor carrier that might be unknown to shippers. At times, a shipper might be faced with difficulties in finding a carrier for transportation of a small load to another location. The broker arranges for a carrier that transports the cargo irrespective of its size.

Likewise, the brokers also help the carriers in filling their trucks and later receive a commission for the work. Motor carriers also look to them when they want to fill an empty void in a trailer or the whole trailer. Therefore, the broker finds a shipper who needs to transport the freight to a particular location. In addition, the broker negotiates a suitable freight rates that is acceptable to both the parties. Often, certain companies allow these brokers to synchronize all their shipping requirements. Freight brokers utilize different methods such as water, land and air carriers for transportation of cargo.

The shipping industry is indeed vast. Therefore, a variety of participants are required for enabling its growth and prosperity. Different entities like a shipper, motor carrier, freight broker, freight forwarders and others are dependent on each other. The services of each complement the needs of others.

In ideal conditions, every entity of the industry would manage its traditional role. However, drastic changes in the transportation industry have forced the players to perform multiple roles. Therefore, every successful freight broker can expand his/her business by establishing new companies or subsidiaries that provide a wide range of services.

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