A freight broker is a company or person that arranges the transportation of freight between a shipper and a trucking company, for a fee. The broker does not own the truck and does not own the freight. Its job is to find the right carrier for the load, agree the price with both sides, and make sure the shipment is picked up, delivered and paid for.
In the United States, a freight broker that arranges interstate loads must be registered with the Federal Motor Carrier Safety Administration (FMCSA) and hold broker authority.
What does a freight broker do?
On a typical load, a broker:
Takes the request. A shipper sends the origin, destination, dates, weight and equipment needed.
Quotes a price. The broker estimates what a carrier will charge and adds its margin.
Finds a carrier. From its own carrier network, or from a load board.
Vets the carrier. Checks operating authority, insurance, safety record and identity before handing over the load.
Sends a rate confirmation. The written agreement with the carrier for that load.
Tracks the shipment. Keeps the shipper informed and deals with delays.
Collects the paperwork. Mainly the signed bill of lading or proof of delivery.
Invoices the shipper and pays the carrier.
Most of the skill is in steps 3, 4 and 6: knowing who to call, knowing who not to trust, and solving problems before the customer notices them.
How do freight brokers make money?
A broker earns the difference between what the shipper pays and what the carrier is paid. If a shipper pays $2,000 for a load and the carrier is paid $1,700, the broker keeps $300.
That $300 is the gross margin on the load. It has to cover staff, software, the bond, bad debt and everything else. Brokers watch margin on every load, and many confuse it with markup. Our guide to margin vs markup explains the difference, and the free freight margin calculator shows both numbers at once.
Why shippers use freight brokers
Capacity. A broker can reach many more carriers than a shipper's own list.
Time. The shipper makes one call instead of twenty.
Flexibility. Brokers cover loads the shipper's regular carriers cannot take.
One point of contact when something goes wrong.
Carriers use brokers too. A small carrier with a few trucks can fill them without a sales team.
Freight broker vs carrier, forwarder, agent and dispatcher
Role | What it does | Works for |
|---|---|---|
Freight broker | Arranges transportation; does not handle the freight | Both sides, paid by the shipper |
Carrier | Owns or operates the trucks and moves the freight | The shipper or the broker |
Freight forwarder | Takes responsibility for the freight and often handles it, including storage and consolidation | The shipper |
Freight agent | Sells and covers loads under another broker's authority | A broker |
Dispatcher | Finds loads and handles paperwork for a carrier | The carrier |
The line between broker and forwarder matters legally. See freight forwarder vs freight broker for the details.
Are freight brokers regulated?
Yes. To arrange interstate freight, a broker needs:
Broker authority from the FMCSA, shown by an MC number.
A $75,000 surety bond or trust, which protects carriers and shippers if the broker does not pay. See the freight broker bond explained.
A process agent filing (BOC-3).
There is no federal exam. The full process is covered in how to get a freight broker license and how to become a freight broker.
What tools does a freight broker use?
Load boards to post loads and find trucks.
Carrier vetting tools to check authority, insurance and fraud signals. Fraud is the largest risk new brokers face; start with what double brokering is.
A transportation management system (TMS) to quote, build and track loads, store documents and invoice.
Accounting and, often, factoring to manage cash flow.
If you are choosing a system, our guide to freight broker software covers what to look for.
The short version
A freight broker is the middle of a three-party deal: the shipper has freight, the carrier has a truck, and the broker brings them together and takes responsibility for making the load happen. It does not move the freight itself, and it earns the margin between the two prices.
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