A freight broker can only operate legally is he is licensed by the Federal Motor Carrier Safety Administration (FMCSA). The freight broker needs to meet certain bond and insurance requirements to get accredited. The primary job of a broker is to assist a shipper manage and transport cargo from point A to point B, usually done by contracting a carrier that is suited for the job. The freight broker is never directly involved in handling or transporting the load. The broker, in essence, serves as the middleman for the shipper and carrier.
go to site A freight agent, on the other hand, does not need a license from the FMCSA. An agent does not need to meet any bond or insurance requirements. The agent works directly under the freight broker. The agent’s primary job is to work with the shipper to facilitate the movement of the shipment from point A to point B. Most freight agents are freelancers and work on a commission basis. The usually charge a rate of 50-70% of the gross profit of each load they handle.
A freight broker can only handle so much. If his freight brokerage business is successful, he will eventually encounter the wall of not being able to accommodate the growing demand for his company’s services. The broker can either be content with operating at full capacity or he can scale up and expand his business to satisfy the demand. The latter option is more advisable and the best way to scale is by hiring independent freight agents.
Independent freight agents are service providers and not employees. They do not work for the freight broker. Instead, the broker is their client. They have little to no liability but have the obligation to follow the broker’s direction. They make sure that everything goes smoothly.
http://www.aftlv.com/money-cant-buy-you-love-essay/ money cant buy you love essay The freight broker remains to be the sole person in charge of assessing shipper credit, invoicing shippers, paying the carriers, making the collections, shouldering bad debts, and dealing with freight claims. He can, however, let the agent take care of the following tasks:
- Search for shippers that are in need of carrier services.
- Provide the freight rates to the shippers.
- Make sure the shipments are all accounted for and are in good condition.
- Find qualified carriers that can meet the demands of the shippers.
- Negotiate with the shipper and the carrier to finalize the arrangement.
- Dispatch the drivers.
- Schedule the pickup and delivery of shipments.
- Make sure the loads arrive on time to their destination by solving any problems that can cause delay or damage to the shipment.
Hiring the services of independent freight agents allows you to scale your freight brokerage company as much as you want or need. They also help you build a good reputation by making sure every shipment is completed without incident.