Everything about Freight Brokers (and What They Do)

What is a freight broker?

A freight broker is a middleman who connects shippers with carriers to facilitate the transportation of goods from one place to another. Essentially, they act as intermediaries between the parties involved in the shipment of freight.

Freight brokers are responsible for negotiating rates with carriers, arranging the transportation of goods, and ensuring that all necessary paperwork and documentation are in order. They typically work on behalf of the shipper to find the most cost-effective and efficient means of transporting their goods, while also ensuring that the carrier is reliable and capable of meeting the shipper's requirements.

In exchange for their services, freight brokers receive a commission or fee based on the total cost of the shipment. Freight brokers can work independently, or as part of a larger brokerage firm, and they may specialize in particular types of freight or modes of transportation, such as air, rail, or sea freight.

What’s the difference between freight brokers and freight forwarders?

Although freight brokers and freight forwarders share some similarities in their roles as intermediaries in the transportation of goods, there are some key differences between the two.

A freight broker acts as a middleman between a shipper and a carrier, negotiating rates and arranging transportation for goods. They typically do not take possession of the goods themselves but rather facilitate the transaction between the shipper and the carrier.

On the other hand, a freight forwarder is responsible for the actual physical movement of goods from one location to another. They often handle multiple aspects of the shipment process, such as packing, warehousing, documentation, and customs clearance. Unlike a freight broker, a freight forwarder may take possession of the goods themselves in order to facilitate their transportation.

Another difference between the two is that while freight brokers typically work on a commission-based model, freight forwarders often charge a flat fee for their services.

What’s the difference between freight brokers and carriers?

The main difference between freight brokers and carriers is that freight brokers act as intermediaries between shippers and carriers, while carriers are the companies that physically transport the goods from one location to another.

Freight brokers do not own any trucks or transportation equipment themselves. Instead, they work on behalf of the shipper to find a carrier that is capable of transporting the goods. Freight brokers negotiate rates and handle the logistics of arranging the shipment, but they do not handle the actual physical movement of the goods.

On the other hand, carriers are companies or individuals who physically transport goods from one place to another. Carriers can be trucking companies, shipping lines, railroads, or air cargo carriers. They own the transportation equipment and are responsible for the actual movement of the goods from the point of origin to the destination.

What’s the difference between freight brokers and dispatchers?

The main difference between freight brokers and dispatchers is that freight brokers act as intermediaries between shippers and carriers, negotiating rates and arranging transportation for goods, while dispatchers work on behalf of the carrier to manage the logistics of the transportation process.

Freight brokers work on behalf of the shipper to find a carrier that is capable of transporting the goods, negotiate rates and handle the logistics of arranging the shipment. They are typically paid a commission or fee for their services.

Dispatchers, on the other hand, work for the carrier and are responsible for managing the logistics of the transportation process. They coordinate with drivers, manage schedules, and ensure that the goods are transported safely and efficiently. Dispatchers are often employed by trucking companies and other carriers and are responsible for the day-to-day operations of the transportation process.

What services does a freight broker provide?

Freight brokers provide a range of services to shippers and carriers to facilitate the transportation of goods, including negotiating rates, arranging transportation, ensuring compliance, providing tracking and communication, resolving issues, and providing expertise.

Order tender

The initial stage of any transportation process is called order tendering. During this process, you will need to provide your freight broker with all the relevant information pieces regarding your shipment. These will need to include things like contact information, relevant addresses, the weight, type, and dimension of your load, and anything else that may be relevant. With all the data collected, a freight broker will then go on to look for either a suitable freight company or a qualified carrier.

Additionally, you may be required to provide additional data, such as any specific handling conditions. Your freight broker will then ensure that they find the right match for you, down to the last detail. These will include the right type of truck that can handle your load, a reputable truck driver, as well as any other standards that need to be met.

Load scheduling

After order tendering is taken care of the next step is load scheduling. The majority of freight brokers use a specialized software solution called TMS (transport management system). This software enables freight brokers to optimize their operations and make them more streamlined.

TMS enables brokers to find suitable and reputable freight carriers more easily. The way it works is that a freight broker will place your load information in TMS after which the system will list them the most suitable matches. Once the load booking is confirmed, the broker will move on to schedule pick-up and delivery dates.

Loading

Once the load is scheduled for pick-up, it comes time to take care of loading. As one of the crucial steps of the transportation process, loading needs to be done just right. Once again, you can rely on your freight broker to oversee this process. 

Here, a freight broker will contact the drivers to ensure that they arrive on time and that everything moving forward will go as scheduled. Next, they will supervise the process of cargo loading, ensuring that everything goes safely and seamlessly. Additionally, they will check to make sure that the right type of truck is there to pick up your load. For instance, if your freight requires a reefer truck specifically, anything other than that simply won’t do. Finally, the carrier will sign a bill of landing, and thus take full responsibility for your freight.

Transit

While your load is in transit, meaning that it’s on the road from point A to point B, it can easily be tracked and managed through TMS. As a shipper, you have full right to use this software solution to ensure that your load is being safe, handled properly and that everything’s going according to plan.

Additionally, you will receive regular updates up until the point your freight reaches its final destination. This will not only bring peace of mind to shippers, but it also offers the opportunity to act fast in case something happens to go astray. 

Unloading and biling

Once the load reaches its destination, the consignee will sign the bill of landing. This way they confirm that the cargo reached them and that it’s now in their possession. Then the carrier needs to confirm that the freight reached them successfully and it comes the time for unloading. As soon as all the necessary paperwork is signed, the freight broker can then invoice the shipper.

In the end, when the freight broker invoices the shipper, the shipper will need to pay the bill within the predetermined timeframe.

Obviously, hiring a freight broker will take a lot of work and worry off of your shoulders, allowing you to use that time and energy on something else. With a good freight broker, you can rest assured knowing that all of your shipping efforts will go smoothly.