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Are you confused about the roles of a freight broker and a freight broker agent? Let's explore the key differences between a freight broker and a freight broker agent.
Freight Broker
A freight broker is essentially the owner of the Freight Brokerage; they file for licensing, insurance, etc., and purchase load boards, TMS, and other items to make the brokerage run smoothly.
In other words, the freight broker provides the platform for freight broker agents, ensuring they have everything they need to broker loads effectively.
Freight Broker Agent
A freight broker agent is an independent contractor who works under a licensed freight broker as an agent. They perform the essential tasks of brokering loads with guidance from the freight broker.
Key Differences
Ownership:Â One of the main differences between a freight broker and a freight broker agent is ownership. A freight broker operates their business and manages their operations, including paying carriers and billing customers, vetting carriers and customers, and setting up carriers and customers in the TMS.
A freight broker agent works on behalf of a licensed freight broker and does not manage or operate the brokerage, pay carriers and customers, vet the carriers and customers, or set up the carriers and customers in the TMS.
Load Movement:Â Freight broker agents seek out customers and obtain loads from them; they then find carriers to haul the loads they have received from the customers. Freight broker agents create rate confirmations, send out shipper and carrier packages, and communicate with the carriers and customers until the load(s) reach its destination.
Payments: Freight brokers take care of payments to the carriers and bill the customers for all loads moved. Freight broker agents do not pay anyone, including carriers and customers.
Commission Structure:Â Freight brokers earn a commission on the freight broker agent's profit from a load the agent moved. The agent receives more commission since they are moving a load for the agent's customer.
Licensing:Â Freight brokers must obtain a license from the Federal Motor Carrier Safety Administration (FMCSA) to operate legally, whereas freight broker agents do not need a license as they work under a licensed broker.
Liability:Â Freight brokers are liable for everything the freight broker agents do while contracted with their brokerage. Freight brokers have contracts, clauses, etc., in place to protect themselves in case they encounter a bad broker agent.
In conclusion, while freight brokers and freight broker agents play essential roles in the transportation industry, there are significant differences between the two positions. Understanding these two positions can help you perform better.
As a freight broker agent, you should know the duties of shippers, carriers, and freight brokers; this will help you identify when people are operating illegally or doing something wrong.
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