Whether you’re thinking about a career in freight management or seeking the right professional to optimize your shipments, freight brokers and freight dispatchers are two names you may have stumbled upon. While both of these shipping experts aid in the efficiency of cargo movement from point A to B, they are two very different professions.
From whom they work for to their registration requirements to how they make commissions, a variety of factors set these two careers apart. Below we lay out everything you need to know about freight dispatchers vs. freight brokers.
What is a Freight Broker?
Freight brokers are independent contractors hired by companies with cargo to ship (shippers). While they perform many tasks, their main duty is to plan the movement of freight from point A to point B in the most economical and efficient way. Once contracted, they use their connections and negotiation skills to find freight transporters to take on the load. At no point in a freight broker’s job do they come in contact with the freight. Instead, they are a middle man that connects shippers and shipping companies.
Beyond the time and cost they save shippers, freight brokers are also highly valued by trucking companies and other freight carriers. This is because they can direct business their way and maximize loads—filling all space to avoid deadhead miles.
Salary: How much does a freight broker make? On average, this profession pays $53,372 + commission in the U.S. The commission is based on the negotiated rate the broker can secure with shipping companies—the lower the rate, the larger their commission.
Education: You can become a freight broker with only a GED. However, to secure a higher paying position, a bachelor’s degree in Business or Supply Chain Management & Logistics is recommended. Alternatively, there is a broad range of freight broker training schools which give those who complete their programs the knowledge needed to thrive in this line of work. Becoming a broker agent or freight agent first is another path many take to get their foot in the door. You’ll get to work for a freight brokerage to learn the ropes—without needing licensing or assuming any liability.
Career Outlook: If you’ve ever had interest in getting a freight broker license, there is no time like the present. Between 2018 and 2028 this career is projected to grow 7%. This will create approximately 32,400 new freight broker job opportunities across the U.S.
For more information and FAQs see our guide: How to Become a Freight Broker.
Responsibilities of a Freight Broker
- Facilitating movement of freight.
- Using negotiation skills to broker deals with shippers and freight services.
- Tracing and tracking shipments.
- Optimizing shipping time through route analyses, detecting any inefficiencies.
- Following all industry requirements and legalities, including getting a freight broker bond and freight brokerage authority.
- Keeping up to date with broker registration and all regulations laid out by the Federal Motor Carrier Safety Administration (FMCSA).
- Tracking trends and changes in the shipping industry, logistics industry, and trucking industry.
- Carefully vetting transportation services, truck drivers, and other shippers for reliability.
- Finding freight transporters to take on loads using load boards.
- Sourcing new clients and carriers.
- Ensuring all paperwork is filled out, including carrier packets.
- Effectively deal with any claims due to damaged or lost shipments.
- Doing basic accounting, such as invoicing and general bookkeeping.
What is a Freight Dispatcher?
A freight dispatcher bridges the gap between shippers and truckers, finding freight for trucks and tracking cargo while it is on the move. They fill trucks by utilizing load boards and working with freight brokers. Once the cargo is loaded, they are then responsible for tracking its movement until it reaches its destination. In addition to these tasks, they do much of the paperwork and administrative work related to sending out shipments.
While freight dispatchers are a proven asset to any carrier, they are especially beneficial to small-owner operators without the systems in place to handle large volumes of paperwork.
Salary: According to Zippia, the average freight dispatcher in the U.S makes $38,299 + commission. Like freight brokers, their commission is based on the rate they negotiate with shipping companies. However, the two professions are interested in different rates—freight brokers try to negotiate low while dispatchers try to negotiate high. It isn’t uncommon for them to be negotiating with each other.
Education: A bachelor’s degree in Supply Chain Management & Logistics or Business will secure you a higher paying position, but many dispatcher jobs are available with a GED.
Career Outlook: As freight volume continues to increase, the need for professionals like freight dispatchers will follow suit to support the supply chain. The trucking industry’s total revenue hit $791.7 billion back in 2019 and has since continued to grow.
Responsibilities of a Freight Dispatcher
- Knowing where the freight is from pick up to drop off.
- Receiving and inputting information regarding the whereabouts of cargo on the go.
- Optimizing fleet movement using a transport management system.
- Using load boards and freight brokers to find loads.
- Working with truck drivers to find loads.
- Scheduling trucks to pick up and deliver freight.
- Logging shipping schedules and tracking truck repair and maintenance schedules.
- Planning the most efficient routes based on weather, traffic patterns, and scheduled construction. For example, if it is known that the S. Highway is under construction and experiencing delays, good dispatchers will find an alternate route.
- Using communication skills to keep customers up to date on expected delivery and pick up times.
- Negotiating rates that are in the best interest of your company.
- Generating invoices and submitting them to the factoring company (for carriers using factoring).
- Preparing paperwork, such as dispatch documents.
- Handling any customer service issues.
Freight Broker vs Freight Dispatcher: Key Differences
|Licensed and regulated through the FMCSA||Unlicensed and unregulated|
|Needs a freight broker bond||Does not need to be bonded|
|Represents themselves/their freight brokerage||Represents the carrier or a truck dispatch service|
|The lower freight rates they negotiate with shipping carriers, the better their commission||The higher freight rate they negotiate for a shipping carrier, the better their commission.|
|Generally works independently from the shipper and shipping companies||Often works directly for a trucking company or other carrier. Although, independent dispatchers also exist.|
|Deals with some paperwork such as carrier packets||Deals with large amounts of paperwork relating to carriers|
|Bills the shipper and pays the carrier||Never invoices the shipper|
|Has a relationship with the shipper||Has no relationship with the shipper|