How Do Freight Brokers Make Money?
There are a couple different models to explain how freight brokers make their money:
- They earn a commission on each load they ‘sell’, schedule, and see through to delivery.
- Their earnings come from ‘selling’ loads to carriers for less than shippers are willing to pay, ideally covering expenses and netting them a profit.
How Does One Become a Freight Broker?
Freight brokers may operate as independent businesses, franchises, or they may work for a larger freight brokering company. Independent freight brokers may take home more of the money they earn, but they also have a lot more legal responsibility and liability, as is the case with many independent businesses.
Brokers must be licensed by the FMCSA, also known as gaining MC authority, insured, must have processing agents (a person assigned as being able to be served legal papers in the state) in each state where the brokerage will operate, and they must obtain a bond or trust.