One of the very first things to find out about a career in transportation is distinguishing between the different players in the logistics and transportation industry. Some of the big hitters include freight brokers, freight agents and freight forwarders, and it is something you learn right off the bat in freight broker training school.
At first, all of them may look and sound the same. Of course , they do very similar things, have the same freight training, know all there is to know about brokering, and have been trained by people who've got the same experience and knowledge in the sector. 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 tell you that there's a definite distinction between the freight broker and the freight agent.
The freight broker runs the brokerage firm. To start, 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 will be operating in for legal claims purposes.
Freight brokers can be self employed full time and telecommute. Having the profits from brokering arrangements between shippers and truckers all to oneself does not 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, promotion and marketing, networking, and all the backroom grunt work that goes into managing a company. At the close of the day, they may not have the time to do the critical things that have to be done to increase income.
And this is 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 allows 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 directly out of the freight broker training school? For the actual reason that freight agents (or freight broker agents) do not need the authority, surety bonds and insurances that come with a full freight brokerage business.
As a freight agent, you work under a freight broker so there isn't any heavy financial pressure to add stress to your new career path. You can jumpstart your earning potential swiftly with merely a PC, fax and telephone line, and Internet access right from a home based office. That could be a extremely cheap startup indeed!
Your most important responsibility is getting new shippers and drivers. You will spend almost all of your time selling your freight brokerage services, networking to find shippers and carriers, doing reference or background checks on them, making sure that your loads get to where they must go on time, and resolving load problems, to name just a few. In brief, you are more into the operational side of freight brokering rather than on the strategic management side.
The upside to this arrangement is that you will not need to stress 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 drawback to this arrangement is that you will have to share your revenue 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 usually interchangeable. That's simple to understand since to a layman there is sort of a similar role in what these people do. But to old hands in the freight industry, there is a substantial difference between the two.
While freight brokers usually move loads from shippers to carriers without even seeing the freight they are moving, freight forwarders handle the goods that are to be transported to different destinations. Most significantly, they transport cargoes and shipments globally.
To ship loads overseas, freight forwarders have to receive smaller cargoes and integrate these into one big shipment. That means they must possess the products physically, consolidate them (frequently according to a single destination), and then decide on what type of shipping they'll use - whether they'll move the cargo by land, air or water.
For a freight forwarder, moving cargo and shipments globally means they need additional 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 knowledge of vessel types and loading. Fluency in 1 or 2 foreign languages won't hurt either.
There are several more players in the freight brokering industry, but for now, it's best to know the biggest difference between freight forwarders, freight agents and freight brokers so you will have a firm foundation and clearer picture about these vital roles in the tranportation industry.
At first, all of them may look and sound the same. Of course , they do very similar things, have the same freight training, know all there is to know about brokering, and have been trained by people who've got the same experience and knowledge in the sector. 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 tell you that there's a definite distinction between the freight broker and the freight agent.
The freight broker runs the brokerage firm. To start, 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 will be operating in for legal claims purposes.
Freight brokers can be self employed full time and telecommute. Having the profits from brokering arrangements between shippers and truckers all to oneself does not 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, promotion and marketing, networking, and all the backroom grunt work that goes into managing a company. At the close of the day, they may not have the time to do the critical things that have to be done to increase income.
And this is 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 allows 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 directly out of the freight broker training school? For the actual reason that freight agents (or freight broker agents) do not need the authority, surety bonds and insurances that come with a full freight brokerage business.
As a freight agent, you work under a freight broker so there isn't any heavy financial pressure to add stress to your new career path. You can jumpstart your earning potential swiftly with merely a PC, fax and telephone line, and Internet access right from a home based office. That could be a extremely cheap startup indeed!
Your most important responsibility is getting new shippers and drivers. You will spend almost all of your time selling your freight brokerage services, networking to find shippers and carriers, doing reference or background checks on them, making sure that your loads get to where they must go on time, and resolving load problems, to name just a few. In brief, you are more into the operational side of freight brokering rather than on the strategic management side.
The upside to this arrangement is that you will not need to stress 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 drawback to this arrangement is that you will have to share your revenue 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 usually interchangeable. That's simple to understand since to a layman there is sort of a similar role in what these people do. But to old hands in the freight industry, there is a substantial difference between the two.
While freight brokers usually move loads from shippers to carriers without even seeing the freight they are moving, freight forwarders handle the goods that are to be transported to different destinations. Most significantly, they transport cargoes and shipments globally.
To ship loads overseas, freight forwarders have to receive smaller cargoes and integrate these into one big shipment. That means they must possess the products physically, consolidate them (frequently according to a single destination), and then decide on what type of shipping they'll use - whether they'll move the cargo by land, air or water.
For a freight forwarder, moving cargo and shipments globally means they need additional 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 knowledge of vessel types and loading. Fluency in 1 or 2 foreign languages won't hurt either.
There are several more players in the freight brokering industry, but for now, it's best to know the biggest difference between freight forwarders, freight agents and freight brokers so you will have a firm foundation and clearer picture about these vital roles in the tranportation industry.
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Learn more about how to become a freight broker, freight broker careers and freight broker training at Freight Broker Training HQ .
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