Last Updated February 11, 2025
The trucking industry is nothing less than complex. With so many constantly moving parts, literally and figuratively, it’s crucial that each party involved in the transportation of goods is on the same page.
If there’s one role in the trucking industry that makes life easier for every party involved in a shipment—from shipper to carrier—it’s the role of the freight broker.
Freight brokers act as important neutral entities. Their general task is to look out for the best interest of both shippers and carriers in order to get goods transported as quickly and securely as possible.
Learning the ins and outs of what freight brokers do, their limitations, and how they help carriers find business is important for anyone starting or running their own trucking company. By the end of this guide, you’ll be able to determine whether or not it’s worth sacrificing a bit of your profit margins for all the benefits that come with partnering with a freight broker.
What Is a Freight Broker?
A freight broker is a person who serves as a middleman between shippers and carriers. Typically, brokers are essentially contracted out by shippers to help identify the right carrier to haul a given load. Think of a real estate broker who helps homeowners find the right buyer for their home; that’s what freight brokers do for shippers in need of a carrier for their shipment.
Brokers don’t actually handle goods at any point throughout the shipping process. Rather, they’re responsible for being the go-to point of contact for shippers and carriers working together to ship goods.
What Do Freight Brokers Do?
Trucking brokers manage and oversee all communication between shippers and carriers. Their job is to make the supply chain process as smooth and efficient as possible for all parties involved.
Before all of this happens, brokers are tasked with connecting shippers with carriers, identifying viable matches based on factors such as the two parties’ locations, timing (ensuring the shipment works with the carrier’s schedule), and load size. Then, the broker acts as the intermediary while negotiating rates with carriers on behalf of the shippers.
Specific freight broker responsibilities throughout the entire shipping process include:
- Connecting shippers with carriers
- Negotiating rates between the parties
- Handling and distributing paperwork to each party as necessary
- Ensuring full compliance
- Arranging shipment of goods
- Monitoring shipment progress
- Providing updates on progress as needed
- Acting as customer service agents for all involved parties, including the receiver
- Resolving any potential disputes
Benefits of Using a Freight Broker
Based on seeing all of a broker’s typical responsibilities, it’s not difficult to see why so many carriers choose to work with freight brokers. Generally, they are considered highly beneficial for carriers.
Lessens Manual Labor for All Parties
The most general perk of using a freight broker is that it decreases the workload for shippers and carriers. Much of the tedious paperwork, such as BOLs and invoices, is processed, handled, and verified by the broker. Trucking brokers will also coordinate pick-up and drop-off times and locations.
Increases Shipping Capacity for Businesses
For shippers, using a broker means access to a much larger quantity of carriers due to the broker’s connections and resources. This is particularly helpful when businesses have abnormally large shipping needs. If nobody in their existing carrier network can take on the larger-than-usual load, the broker’s network of carriers can come in handy. It allows shippers more flexibility and scalability without having to invest in additional trucks or equipment.
Assists Carriers With Finding New Loads to Haul
For carriers, a major benefit of working with freight brokers is that it opens the door to a whole new world of opportunities for finding loads to haul. While carriers can find loads in other ways, such as load boards, using a broker to do so can lead to even more sensible and higher-paying loads. Rather than spending hours browsing load boards, which can cut into productivity, brokers can do the work for them.
Streamlines the Shipping Process
Brokers act as the liaison for shippers and carriers. Adding a third party to take control of certain aspects of the process means there are more people putting in effort toward scheduling and completing a haul, which ultimately speeds up the process.
Ensures Fragile or Perishable Goods Aren’t Damaged
Products damaged en route to their destination create a serious, time-consuming problem for shippers, carriers, and receivers—and in this industry, especially, time is money.
When brokers are involved, added layers of protection are put in place to prevent this from happening. They have preventative safety measures that ensure precious cargo isn’t damaged, thus mitigating risk.
Reduces the Likelihood of Serious Disputes
The added measures brokers put in place to prevent damage to goods in transport to their final destination is just one example of brokers doing everything they can to eliminate the likelihood that a shipment takes a left turn and things don’t go according to plan.
Freight brokers don’t want to be liable for any costly errors during the haul. They cross their t’s and dot their i’s to the best of their ability to maximize the chances of a smooth delivery. This means that there’s a significantly lower chance of a serious dispute between involved entities when there’s a freight broker involved. For carriers, the key is finding a broker with a good credit score in order to ensure you’re working with a reliable broker.
How Do Carriers Find Freight Brokers?
The easiest way for carriers to find brokers is by scanning online load boards, essentially an online forum or marketplace where brokers list available shipments. Typically, the best load boards have filters so carriers can whittle down the list to loads that make sense for them. Examples of filters include pick-up and drop-off locations, dates, load size, and rates.
Carriers can also ask around their network to get suggestions for established brokers. Once a broker is identified, you can look them up on the FMCSA website via their DOT number or MC number. This will confirm that the broker is in good standing with the FMCSA (meaning they’re licensed, insured, etc.).
Jennifer Fink, altLINE freight factoring operations manager, notes that often, carriers will find that all it takes is one successful partnership with a broker to build a strong foundation for a permanent partnership.
“This industry is all about networking and relationship-building,” Fink said. “If you’re a carrier and you find a broker you like working with, be forthcoming about how much you appreciate working with them and keep trying to do business with them. Having a good, trustworthy broker on your side can go a long way to helping you find new business.”
How Do Freight Brokers Find Carriers?
Just like carriers use load boards to find shipments to haul, brokers use broker load boards to find carriers to work with. Broker load boards allow brokers to locate carriers who are actively looking for loads to haul.
Brokers have other resources within their own network to find carriers and shippers, including searching the FMCSA website for registered carriers and browsing other freight carrier directories. Brokers might use these directories to cold-call carriers nationwide to evaluate their needs and see if they could benefit from using a broker.
Are Freight Brokers Worth It?
Whether or not freight brokers are worth using will depend on the trucking business. Keep in mind that brokers can charge anywhere from 10-70% commission for helping identify loads and manage shipments, with the industry standard being around 50-60%. Therefore, brand-new trucking business owners who are operating on very slim margins might not be able to afford brokers.
However, it’s quite common for established carriers to work with a trusted broker or have a network of brokers. This allows them to have continuous business and a full schedule.
The best thing you can do as a carrier is to evaluate what you may or may not be able to afford when it comes to brokers. You might be in a position to afford a broker who charges 14% commission for a given load but not one who charges 20% commission.
With that said, it’s important not to just go with the cheapest broker. Other aspects worth evaluating include their insurance coverages, reputation, and how sensible hauling their posted shipment would be for your business.
When you first test the waters with brokers, try to get a feel for a specific one who you particularly enjoy working with and focus on building a strong relationship with them. Having a trusted partner to help you find business whenever you need it can be very beneficial.
In-Summary: What Is a Freight Broker, and What Do They Do?
Freight brokers’ jobs are to make life easier for shippers and carriers. They act as the liaison between all involved parties during the transportation of goods. When a broker is involved in a transaction, it can ease communication, reduce the chances of disputes, accelerate the time from pick-up to drop-off, and streamline the process entirely.
However, freight brokerages need to make a profit just like carriers and shippers do. They charge a commission for each load, so evaluate what you can and cannot afford before using a broker.
Freight Broker FAQs
Are freight brokers going out of business?
Freight brokers aren’t necessarily going out of business, but the broker industry is undoubtedly facing significant challenges. In 2023, the freight broker industry decreased by 15.1%. Additionally, the largest freight brokerages in the country dominate the landscape, so it can be challenging to start a freight broker business from scratch.
What do freight brokers make?
According to Indeed.com, the average freight broker makes $62,105 per year. This figure can vary significantly by state.
How do brokers pay carriers?
Once negotiations between a carrier and a broker are complete, the agreement with the brokers is verified via an invoice. The carrier sends an invoice to the broker for the loads scheduled to be hauled, with payment terms depending on what the two parties agreed two in the contract, such as net 30 or net 60. Then, the broker pays the carrier either through self-financing or a specific form of trucking financing, such as freight broker factoring or a line of credit.
What percentage do freight brokers charge?
Freight broker commission ranges from 12-20% per load, meaning they earn 12-20% of the gross margin of each load.
This figure will change on a case-by-case basis depending on the broker and on specific factors regarding each shipment. For instance, a few factors that affect how much freight brokers charge include:
- Whether or not they have an existing, healthy relationship with their client
- The demand (high vs. low) for their services for a specific load
- The credentials and reputation of the freight broker
- Both the broker’s and the shipper’s ability to negotiate rates.
Michael McCareins is the Content Marketing Associate at altLINE, where he is dedicated to creating and managing optimal content for readers. Following a brief career in media relations, Michael has discovered a passion for content marketing through developing unique, informative content to help audiences better understand ideas and topics such as invoice factoring and A/R financing.
