One of the first things to find out about a career in transportation is distinguishing between the various players in the logistics and transportation industry. Some of the major players include freight brokers, freight agents and freight forwarders, and it's something you learn right off the bat in freight broker training school.
Initially, all of these roles may look and sound the same. Of course , they do very much the same thing, have the same freight training, know all there is to know about brokering, and have been trained by folks who have the same experience and knowledge in the industry. But when they hunker down to work, there are noteworthy variations in what they do.
Freight Brokers
Teachers in freight broker training firms worth their salt will make it plain that there's a definite difference between the freight broker and the freight agent.
The freight broker runs the business. For starters, they must have a property broker's authority from the Federal Motor Carrier Safety Administration (FMCSA), carry a $10,000 surety bond, and have designated agents in the states they'll be operating in for legal claims purposes.
Freight brokers can be self-employed full time and work from home. Having the profits from brokering arrangements between shippers and truckers all to oneself doesn't hurt either.
But freight brokers must divide their time between running a whole business and the crucial, enterprise-boosting activity of finding new shippers and carriers. They must think about cash flow, billing and collection, marketing, networking, and all of the backroom grunt work that goes into managing a company. At the end of the day, they might not have the time to do the crucial things that have to be done to generate income.
And here's where freight agents come in handy.
Freight Agents
Many fresh graduates from freight broker training often start their brokering career as freight agents. Being a freight agent enables them to hit the ground running, recover their training investments quick and at the very same time, get the knowledge that only a hands-on exposure to freight brokering can give.
Why start as a freight agent straight out of freight broker training school? For the main reason that freight agents (or freight broker agents) do not need the authority, surety bonds and insurances that are part of a full freight brokerage business.
As a freight agent, you work under a freight broker so there is not any heavy financial pressure to add stress to your new career path. You can kickstart your earning potential speedily with merely a PC, fax and phone line, and Internet access right from a home based office. That's a very cheap startup indeed!
Your principal responsibility is getting new clients and carriers. You'll spend most of your time marketing your freight brokerage services, networking to find shippers and carriers, doing reference or background checks on them, ensuring that your loads get to where they need to go on time, and resolving load problems, to name a few. In short, you are more into the operational side of freight brokering instead of on the strategic management side.
The upside to this arrangement is that you will not need to fret about invoicing, billing, collections, cash flow, payroll and all those things that go into managing a brokerage company. Your freight broker looks after all of that. Your business is getting more business, period.
The disadvantage to this arrangement is that you'll have to share your earnings from commissions with your freight broker.
Freight Forwarders
To the new person right out of freight broker training school, the freight forwarder and the freight broker are often interchangeable. That is easy to understand since to the untrained eye there is somewhat of a similar role in what these people do. But to old hands in the freight industry, there's a substantial difference between the two.
While freight brokers usually move loads from shippers to carriers without even seeing the freight they're moving, freight forwarders handle the products that have to be carried to different destinations. Most critically, they transport cargoes and shipments worldwide.
To ship loads overseas, freight forwarders have to get smaller cargoes and blend these into one big shipment. That means they'll have to possess the products physically, consolidate them (often according to a single destination), and then decide on what type of shipping they will use - whether they'll move the load by land, air or water.
For a freight forwarder, moving cargo and cargo internationally means they need extra experience and understanding beyond being a domestic freight broker. You're going to need to have a solid grounding in customs laws, procedures and practices, and have experience in vessel requirements and loading. Ability in one or two foreign languages will not hurt either.
There are many more players in the freight brokering industry, but for the moment, it's often best to know the biggest difference between freight forwarders, freight agents and freight brokers so you'll have a firm foundation and clearer picture about these urgent roles in the tranportation industry.
Initially, all of these roles may look and sound the same. Of course , they do very much the same thing, have the same freight training, know all there is to know about brokering, and have been trained by folks who have the same experience and knowledge in the industry. But when they hunker down to work, there are noteworthy variations in what they do.
Freight Brokers
Teachers in freight broker training firms worth their salt will make it plain that there's a definite difference between the freight broker and the freight agent.
The freight broker runs the business. For starters, they must have a property broker's authority from the Federal Motor Carrier Safety Administration (FMCSA), carry a $10,000 surety bond, and have designated agents in the states they'll be operating in for legal claims purposes.
Freight brokers can be self-employed full time and work from home. Having the profits from brokering arrangements between shippers and truckers all to oneself doesn't hurt either.
But freight brokers must divide their time between running a whole business and the crucial, enterprise-boosting activity of finding new shippers and carriers. They must think about cash flow, billing and collection, marketing, networking, and all of the backroom grunt work that goes into managing a company. At the end of the day, they might not have the time to do the crucial things that have to be done to generate income.
And here's where freight agents come in handy.
Freight Agents
Many fresh graduates from freight broker training often start their brokering career as freight agents. Being a freight agent enables them to hit the ground running, recover their training investments quick and at the very same time, get the knowledge that only a hands-on exposure to freight brokering can give.
Why start as a freight agent straight out of freight broker training school? For the main reason that freight agents (or freight broker agents) do not need the authority, surety bonds and insurances that are part of a full freight brokerage business.
As a freight agent, you work under a freight broker so there is not any heavy financial pressure to add stress to your new career path. You can kickstart your earning potential speedily with merely a PC, fax and phone line, and Internet access right from a home based office. That's a very cheap startup indeed!
Your principal responsibility is getting new clients and carriers. You'll spend most of your time marketing your freight brokerage services, networking to find shippers and carriers, doing reference or background checks on them, ensuring that your loads get to where they need to go on time, and resolving load problems, to name a few. In short, you are more into the operational side of freight brokering instead of on the strategic management side.
The upside to this arrangement is that you will not need to fret about invoicing, billing, collections, cash flow, payroll and all those things that go into managing a brokerage company. Your freight broker looks after all of that. Your business is getting more business, period.
The disadvantage to this arrangement is that you'll have to share your earnings from commissions with your freight broker.
Freight Forwarders
To the new person right out of freight broker training school, the freight forwarder and the freight broker are often interchangeable. That is easy to understand since to the untrained eye there is somewhat of a similar role in what these people do. But to old hands in the freight industry, there's a substantial difference between the two.
While freight brokers usually move loads from shippers to carriers without even seeing the freight they're moving, freight forwarders handle the products that have to be carried to different destinations. Most critically, they transport cargoes and shipments worldwide.
To ship loads overseas, freight forwarders have to get smaller cargoes and blend these into one big shipment. That means they'll have to possess the products physically, consolidate them (often according to a single destination), and then decide on what type of shipping they will use - whether they'll move the load by land, air or water.
For a freight forwarder, moving cargo and cargo internationally means they need extra experience and understanding beyond being a domestic freight broker. You're going to need to have a solid grounding in customs laws, procedures and practices, and have experience in vessel requirements and loading. Ability in one or two foreign languages will not hurt either.
There are many more players in the freight brokering industry, but for the moment, it's often best to know the biggest difference between freight forwarders, freight agents and freight brokers so you'll have a firm foundation and clearer picture about these urgent roles in the tranportation industry.
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