A freight agent is an independent contractor who helps connect shippers with carriers willing to haul the freight. A freight agent works for a freight broker and plays a crucial role in the movement of freight, as a customer-facing salesperson of sorts who must find available carriers to ship a client?s freight.
Listing of the Differences in a Freight Broker and Freight Agent freight agent commission structure Freight brokers earn money through the margin spread between what the sale price to the shipper and the freight cost of the underlying motor carrier. The freight agent earns its money on a commission of the spread it negotiates with its customer and the underlying asset motor carrier.The commission ranges anywhere from a 60 / 40 split to an 80 / 20 split.
Example of commission calculation: Intermodal price to the shipper: $2,500 Intermodal price from railroad & dray carriers: $2,400 Margin: $100 $60 commission paid to the freight agent $40 is the take for the freight broker
Quite often there is a limit to what a freight agent can be paid on its commission based on a minimum accepted gross margin percentage and / or a fixed dollar gross margin amount. A freight broker has a more consistent look and feel across its offices versus freight agents under a broker. So, while there will be some similarity in the services offered by a freight agent there are cultural differences because the freight agent is an independent contractor and has their own culture.
While the freight agent has its own culture, it does bring with it the reputation of the freight broker it is representing.Freight agents are typically small businesses that operate out of their homes, while a freight broker is most often a much larger entity. A freight agent cannot pursue all shippers.
There is a clearance process where the freight agent must check with the freight brokerage it represents that the potential customer, they are working with is not already a customer of the freight broker or another agent of the freight broker.