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Freight Broker Income: Salary vs. Commission


Arik Bibicoff / Contributor / Marketing Director at Eagle Express Service



A freight agent is an independent third party that facilitates the exchange of services for compensation between entities that ship materials, and the carriers that haul them. You may have heard the term ‘freight broker’ as well. While these two terms do have their similarities, it is important to understand the subtle differences between a freight broker vs. a freight agent. A freight broker requires to acquire a freight broker license, insurances, and a surety bond to cover itself in the case of liability, damages, or the inability to make payments. Due to these requirements, logistics professionals often turn to a position of lesser responsibility as an independent freight agent. As an agent, you are not required to have a license and do not assume any risk of the client’s creditworthiness. You also are not required to have a bond, since your broker would be the one responsible for collecting/administering payment. However, a broker is likely going to require some percentage of your revenue/profits, so it is a worthwhile investment for them to cover operational costs of having you on board. Aside from that, freight agents have the same tasks and responsibilities as a broker, they just mitigate the risk.

The rapid growth cycle of the logistics industry has led to a rise in the number of freight broker agents. The U.S. Bureau of Labor Statistics will grow by 29% by the end of the decade, which is over double the 14% growth rate for other jobs. With the increase in popularity within the position, there are often questions from people working in other fields about how to break into the industry. Unfortunately, it is not that simple. For those who have been in the industry for a large portion of their professional careers, you can attest to this. The world of freight brokering is very different from a traditional business setting, with lots of technology and jargon that must be thoroughly comprehended before committing to a career as a freight agent. All the freight broker courses and training provide you with general knowledge of the tasks required for a freight broker/agent but cannot portray the level of persistence necessary to obtain shippers, know when to adjust rates to accommodate for market fluctuations, or when to get tough during negotiations with carriers to protect your profits.

All too often, there are wide ranges of income potential for a freight agent, due to the various compensation programs offered by brokers throughout the industry. One example would be the varying income levels between a salaried freight agent, and an agent that works independently. The figures illustrated below are indicated to be agent’s SALARIES and do not illustrate the full income made by a freight agent in a given year. Data collected from the following sources: Trucker Path, ZipRecruiter, Bureau of Labor Statistics, and Indeed.

Freight Broker Average Earnings: Indeed

According to the information displayed in the chart, a freight agent will likely make around $3,200 – $5,000 in salary per month. In addition to salary, agents will make a commission off each load they move. In my professional experience as a Freight Agent Acquisition Specialist, freight agents/brokers on salary make between 8 – 12% commission per load. If an agent is booking an average of 10 loads per week at $300 margins and 10% commission per load, then you’re looking at a total monthly income of $4,400 – $6,200. Not bad for booking and moving loads from shippers. How does the total income of a freight agent compare to that of an independent agent (freight broker agent)?

In some cases, brokers will seek out agents that work independently, where they are not obligated to pay the agent a base salary. These agents often accrue a higher income, for they are granted much more aggressive commission splits, to compensate for the lack of base salary. According to Freight Tec, companies within the industry offer commission splits that range from 25 – 70% being paid to the agent. The industry average comes in around 50 – 60%, after any deductions from fees. Some brokerages do things a bit differently, and DON’T split the agent’s commissions at all. Instead, brokers like Eagle Express Service, implement a fixed administrative fee off the agent’s gross revenue and let he or she keep 100% of his or her commissions. Agents working under this compensation program can yield a significantly higher income over any other brokerage if they can sustain good profit margins on their loads. When it comes down to it, there are a lot of variables involved with deciding on a broker that is right for you. Below, we have illustrated the various incomes possible for a freight broker agent:


VARIABLE INCOME POTENTIAL

15% PROFIT

20% PROFIT

Industry Standard Broker – 60% Commission

15 Loads Per Week

Load average amount – $2,000

Annual Revenue – $1.44M

15% profit margin – $129,600

20% profit margin – $172,800

Progressive Broker – 100% Commission – 5% Admin Fee

15 Loads Per Week

Load average amount – $2,000

Annual Revenue – $1.44M

15% profit margin – $144,000

20% profit margin – $216,000

These numbers are being produced by the top 10 – 15% of freight broker agents in the industry. Some agents make less, and some make much more. It ultimately depends on the experience, availability, and work ethic of the agent. To get your load volume within a range of these, you can also use these prospecting tactics to increase your customer pipeline by working on leads with a high probability of conversion!

As stated previously, there are a lot of different factors that can affect the income of a freight agent. One of the biggest factors is the compensation breakdown, which is ultimately decided by the broker. The highest, most accommodating compensation plan is going to be the one that benefits you the most.  Size, assets, and the company’s business model all play a role in determining the commission structure for agents. A large, asset-based company can usually get away with paying their agents a lower commission because of they offset it with the trucks, a reputable name, and hefty financial backing. As an agent, this may impede on some of your profits, so be sure to evaluate what is going to be the most beneficial to the financial health of your business.

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