A Freight Broker’s Role In The Industry

A freight broker is the middleman of the freight shipping industry. He connects the shipper to the carrier, negotiating a percentage-based fee for his services. The key to his usefulness, for both parties, is his knowledge base. A good broker must know his area of the shipping industry, the technologies available to him to move freight, as well as the carriers best equipped to do it. Frequently this knowledge comes from having been a carrier himself at one time or another. By maintaining a large number and variety of contacts, the broker is able to connect a shipper and his specific needs with the right kind of carrier. The shipper moves his freight and the carrier fills his vehicle. Everyone saves time, aggravation, and money. Everyone wins.

Or do they? Because the broker represents his shipping clients in the transaction between shipper and carrier, the interests of carrier and broker can sometimes compete. A broker must protect the customer base that represents its income, but a carrier needs to know that it will be adequately compensated. He needs to know that his interests will be looked after if the is a dispute about payment.

So how to keep from getting burned? The key is communication. A properly structured agreement between broker and carrier will keep all three parties protected and their business relationship flourishing.