A freight broker is a transportation intermediary, which is a corporation that is neither a shipper nor an asset-owning carrier but plays an important role in cargo transportation.
Both motor carriers and shippers benefit from the services provided by brokers. They assist transporters in filling their vehicles in exchange for a commission. They assist shoppers in locating dependable motor carriers that they may not have been aware of otherwise. In fact, several businesses employ brokers as their traffic department, allowing them to handle all of their shipping and transportation management requirements through the broker.
To succeed in such a large and diverse business, a diverse set of participants is required. The titles of some of these individuals may be a little unclear, and their responsibilities may overlap. So, who are the major participants in the brokerage industry, and what do they do?
Brokerage's Major Players:
Broker of freight. To move their goods, a freight broker connects shippers with motor carriers.
Shipper. A shipper is a person or company with merchandise or goods to transfer.
Transporter of motor vehicles. Auto Transport companies normally ship vehicles interstate and internationally.
There are two sorts of motor carriers: "Private" (a firm that offers truck transportation for its own goods) and "For Hire" (a company that provides truck transportation for other people's cargo) (A company that is paid to provide truck transportation of cargo belonging to others).
Forwarder of goods. Freight forwarders are often confused with freight brokers, although they are not the same. Forwarders often take ownership of commodities, consolidate multiple smaller shipments into one large shipment, and then arrange for transportation of that larger item via land, air, and water carriers.
Broker for imports and exports. Importers and exporters use them as intermediaries. Import-Export Brokers work with the United States Customs Service, other government agencies, multinational carriers, and other enterprises and organizations participating in global freight transportation.
Brokerage for agricultural trucks. Unregulated agricultural truck brokers, which are usually small and only operate in one area of the country, arrange motor carrier service for specifically excluded agricultural products.
Associations of Shippers. Shipper's associations are tax-exempt, non-profit cooperative organizations founded by shippers to combine goods and cut transportation expenses. Shipper's Associations work in a similar way to freight forwarders, however, their services are only provided to its members and not to the general public.
Of course, in an ideal world, each company in the industry would perform its usual duty and that would be the end of it. However, the transportation business is changing at such a fast pace that once-clear lines are constantly blurring. A successful freight broker may also expand his or her firm by forming subsidiaries or additional companies that provide additional freight services.
As you can see, freight brokers come in a variety of shapes and sizes. Hopefully, this clarifies their roles and the services they offer. A good freight broker or third-party logistics provider is a valuable tool in your supply chain. You might be interested in becoming a freight broker, so you can read a guide to becoming a freight broker
