What Is a Freight Broker and What Do They Do?

What is a freight broker?

A freight broker is a middleman who coordinates the movement of freight between the shipper and the carrier. They’ll have gone through freight broker training, earned their broker authority, and have all the necessary skills and tools for matching shipper loads with carriers.

Shippers rely on a freight broker to help them get loads placed (particularly those loads that the shipper might struggle to get delivered on their own) and ensure products are delivered safely and on time. For example, a shipper may turn to a broker if all their contract carriers cancel, leaving loads that need to be moved ASAP,  or they need access to trucks on notoriously difficult routes. On the other hand, carriers depend on brokers to locate loads and help them arrive at the highest possible rate they can achieve to maintain a growing business.

What does a freight broker do?

A freight broker’s primary role is connecting shippers and carriers for the best possible rates so that goods can keep moving. This includes several responsibilities, including building relationships with shippers with cargo to haul and carriers searching for loads. Often, brokers are responsible for searching for qualified carriers to find the best fit. In other cases, carriers may seek out brokers as they look for freight on the lanes they run.

Negotiating is also essential, as freight brokers must find the middle ground between what shippers want to pay and what rate is ideal for carriers. Brokers are also responsible for assisting with the logistics after a carrier agrees to haul a load, including providing pickup and dropoff details.

Do carriers need to work with a freight broker?

While there are many instances where a carrier can work directly with a shipper, carriers often depend on a freight broker to make their lives easier. There are several reasons for this:

• Brokers have shipper relationships. Carriers often use a load board to secure loads to haul. And to find the most options and trusted partners, carriers and brokers turn to the DAT load board. This platform’s advanced search and filter features, along with its accessibility via the DAT One mobile app, make it a natural time-saver. In addition, carriers can find brokers with existing shipper relationships directly and can view credit score ratings, reviews, and more to make sure that they are only partnering with the most reliable businesses. Carriers can also let brokers come to them by posting their truck details.

• Brokers simplify the process of striking a balance between what carriers want and what shippers want. Carriers and shippers often come at things from completely different angles. Carriers generally want to make as much profit as possible, whereas shippers are often eager to find opportunities to cut costs. Of course, they don’t necessarily want the cheapest service provider on the market and the low-quality service that often comes at that price point, but they do prioritize controlling costs. Enter brokers. By purchasing a broker’s services, carriers can quickly arrive at a fair rate that satisfies all parties. Plus, if a carrier forges a strong, long-term relationship with a broker, they will likely consistently earn a better rate than they would by seeking out a different broker for every load.

• Brokers handle key ins and outs of transportation. Even for independent owner-operators that run their own businesses, spending time searching for the perfect load and dealing with the logistics can get in the way of what will actually bring in profit: getting out there and hauling loads. When working with a freight broker, independent owner-operators are depending on someone who has a freight broker license and has likely participated in freight broker training online. As a broker for loads, they are building a business reputation based on the quality of their shipper-carrier matches. So, carriers can lean on a broker as they might lean on their own sales team. With a broker’s help, there’s no need to cold call shippers to find loads or dedicate hours to networking, leaving carriers with more time and bandwidth to focus on doing what they do best: hauling loads successfully and safely.

Why are freight brokers important?

Other benefits freight brokers bring to the transportation industry are flexibility, resilience, and speed. If shippers and carriers exclusively work in one-on-one ways, market condition changes could lead to many obstacles. It would be challenging to get loads hauled if specific lanes were clogged or a carrier became unavailable at the last minute.

People who are great at freight broker jobs secure the proper authority, undergo the right training, and study the market closely as they build their businesses. The best freight brokers for owner operators have a track record of setting up a freight broker business that can handle trucking in any market environment.

How to become a freight broker

Becoming a freight broker takes time, but it’s well worth the effort. DAT’s broker start-up guide offers a detailed breakdown of the critical steps to becoming a freight broker. Here are some of the essential things all future freight brokers need to do:

• Establish a business. This requires freight broker hopefuls to set up a legal entity and complete the right documents to secure their operating authority.

• Find the right partners. Freight brokers will also need to decide on a BOC-3 process agent who will be available to them if their company ever faces a court case.

• Get the right risk-management protection in place. This is known as a trust fund or a freight broker surety bond. In the event the broker can’t satisfy contracts, this money gives shippers and carriers confidence that they’ll have money to cover them without a loss.

• Participate in training to get knowledge and skills. DAT understands how vital training is for developing talented freight brokers. Through our partner Freight 360, we provide comprehensive broker training with compelling video, text, and more across 40 lessons.

• Learn the ropes of establishing contracts and winning business. Truck brokers are responsible for detailed record-keeping, including contracts and receivables. To build a broker business, they will also need to establish shipper and carrier relationships. The DAT load board is among the best resources for finding qualified partners and getting loads hauled.

How much does it cost to become a freight broker?

The investment needed to become a freight broker varies from one business to the next, though most will likely need tens of thousands of dollars alone for a surety bond. Future freight brokers will also need to budget for high-quality training, such as Freight 360’s broker training, to ensure their business starts off on the right foot. Additional expenses like fees for setting up the company and other necessary paperwork should also be included. Many brokers might also pay a service provider for help sorting out their authority and license requirements, such as DAT Authority, to streamline the process and save money in the long run.

When pursuing a high freight broker salary, it’s important to understand that the upfront costs can be substantial. At the same time, the ROI of entering this career with all the proper pieces in place can quickly pay down those costs, allowing those new to the business to begin to build a healthy bottom line as a truck broker. And, of course, the things people learn about how to become a freight broker along the way are priceless.

What tools will help freight brokers succeed?

To start, the first tool everyone needs is a load board for brokers. With the DAT load board, freight brokers can seek out carriers, including independent owner operators. Freight brokers can use data-driven insights like market rate data, truckload pricing, seasonal trends, and much more. Study individual lanes or lanes within a region to determine how to get loads placed for shippers quickly and efficiently.

The second tool that can take freight broker training to the next level is a transportation management system, also known as TMS software. DAT Broker TMS is an all-inclusive platform that includes tools for managing finances, tracking loads, and studying carrier rates. Brokers save time and become more profitable with TMS software. Optional modules add new layers of visibility and analytics for any growing load broker business.

How do carriers find freight brokers?

Carriers seeking loads to haul can also benefit from a tool like the DAT load board. Search for freight brokers and read reviews from other carriers who’ve partnered with that broker in the past. Carriers and owner operators can also send messages and begin to build business relationships with the truck broker partners of interest. The DAT One app makes scouting for freight brokers easy, even if carriers are already on the road.

How do brokers find carriers and shippers?

For those considering freight broker jobs and studying the average freight broker salary, it’s natural to wonder what the day-to-day business looks like after landing the job. One of the most important parts of any freight broker’s role will be locating carriers and shippers.

The good news is that the DAT load board makes this easy. After logging on from a desktop or mobile device, brokers can share their details with prospective carriers and shippers. They can also reach out and connect with either shippers or carriers to begin a partnership. Once freight brokers have successfully negotiated and placed loads, they can use platforms such as DAT Broker TMS to keep track of those loads and manage the finances and paperwork that accompany them.

What next step should someone take to become a freight broker?

The first step to becoming a freight broker is getting an operating authority. However, figuring out the specific requirements can be confusing because there are a lot of fees to pay and forms to fill out.

Luckily, DAT Authority makes it easy to begin a freight brokerage. Our team of experts ensures that hopeful freight brokers meet all the requirements, such as getting their MC number, designating a BOC-3 process agent, and arranging for a freight broker surety bond.

Let us save you time by navigating the process and paperwork while you get your business off and running! 

How can carriers get more loads from freight brokers quickly?

The best place to start securing freight broker loads is on the DAT load board. With millions of new loads posted daily, carriers can rapidly search for loads that fit their tractor, trailer, and lanes, along with other criteria.

Sign up for the DAT load board and start finding loads with freight brokers today!