Freight Forwarders vs. Freight Brokers

September 20, 2022
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Both freight forwarders and freight brokers are essential players in the shipping and logistics industry. The shipping services they offer, including processing shipments in the most cost-effective and time-efficient way, help keep the supply chain moving smoothly. 

Additionally, their expertise and connections are an irreplaceable asset to companies looking to ship freight. It is this overlap that often leaves people thinking these shipping jobs are the same. However, that is not the case. 

Freight forwarders and freight brokers differ in everything from salary to shipping responsibilities, to how hands-on they are with cargo. Below are the key differences—and similarities—between these two fast-paced professions in the freight industry. 

What is a Freight Broker?

A freight broker's job mainly entails connecting shippers/cargo owners (whoever needs to ship freight) with freight carriers (trucking companies, shipping vessels, cargo planes, etc.). They are essentially a middleman that uses their connections and skills to find freight carriers to get goods from point A to point B in a timely and cost-efficient manner. 

Note that freight brokers are generally independent contractors—they work for those with goods to ship in exchange for a commission. They do not own the goods being shipped or any of the shipping vessels. Additionally, they never directly or physically handle the freight—unlike freight forwarders.

Education: Many higher paying positions require a bachelor's degree in a related field, such as Business or Supply Chain Management & Logistics. However, there are also entry-level freight broker jobs available that only require a high school diploma. 

Salary: On average, this profession pays $53,372 + commission in the US. How much a freight broker makes depends on multiple factors, including experience, location, success, and partner networks.

Career Outlook? Good! Between 2018 and 2028, this career is projected to produce 32,400 freight broker job opportunities across the US—a growth of 7%. Part of this substantial growth is the freight volume increase due to the boom of e-commerce, making freight brokers desired by both shippers and shipping companies. Companies shipping goods benefit from hiring a freight broker since they help free up time, secure low rates, and get freight out quickly. A primary advantage to freight carriers is that brokers can help them fill any empty cargo space, making shipments more lucrative and efficient. 

For more information see our guide, How to Become a Freight Broker.

Responsibilities of a Freight Broker

  • Facilitating the 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.
  • Registering with the Federal Motor Carrier Safety Administration (FMCSA) for interstate and foreign commerce.
  • Tracking trends and changes in the shipping industry, logistics industry, and trucking industry. 
  • Carefully vetting transportation services, truckers, and other shippers for reliability. This includes assessing safety scores and past history.
  • Sourcing new clients and carriers.
  • Using load boards.
  • Ensuring all paperwork is filled out, including carrier packets. 
  • Effectively deal with claims due to damaged or lost shipments.
  • Doing basic accounting, such as invoicing and general bookkeeping. 

What is a Freight Forwarder?

A freight forwarder plays an active role in the shipping process. They not only do many of the same tasks that a freight broker does (such as finding and negotiating with freight carriers), but they also deal with warehousing the freight. 

This means they physically take possession of the cargo before handing it off to the shipping companies. Beyond storage, they may also perform hands-on tasks to maximize shipment efficiency, such as repackaging by breaking up bulks or consolidating smaller goods. Note that a freight forwarder can also be a customs broker, but not all are. 

Freight forwarders do not own the freight or carrier assets (trucks, trains, planes, etc.). However, they do assume legal responsibility for goods once they are in their possession—the main difference between them and freight brokers since the latter never physically handles the movement of freight.

Education: According to Zippia, a little over half of freight forwarders (54.4%) have a college degree, with most holding a bachelor's degree in business. The rest only hold a GED, with no form of post-secondary education. 

Salary: The average freight forwarder salary is $43,475, with the top 10% making over $58,000 annually. 

Career Outlook? Great! Zippia projects that between 2018 and 2028 that this career will grow 1%, producing approximately 46,900 freight forwarder jobs in the US. Much like freight brokers, freight forwarders are highly desirable due to the time they free up and the low rates they are able to secure. Their ability to break up and consolidate shipments to maximize cargo space also puts them in favor with freight carriers.

Responsibilities of a Freight Forwarder

  • Handling shipments from start to finish (booking to billing).
  • Safely and efficiently storing client's shipments.
  • Repackaging freight to maximize cargo space and consolidate shipments.
  • Filling out all paperwork, including house bills of lading, certificate of origin, etc. 
  • Getting bonded and insured. 
  • Understanding all legal requirements, including registering with the FMCSA and signing rate sheets.
  • Tracking trends and changes in the shipping industry, logistics industry, and transportation laws.
  • Understanding a company's needs and the shipping needs for all types of freight.
  • Finding shippers ready to take on cargo when it is ready to go to avoid delays. 
  • Using load boards.
  • Consistently and clearly communicating with all parties. 
  • Using negotiation skills to broker deals with shippers and freight services.
  • Tracing and tracking transportation of goods. 
  • Effectively deal with claims due to damaged or lost shipments.
  • Source new clients and carriers for your forwarding business.

Freight Forwarders Vs. Freight Brokers: Key Differences

When it comes to a freight broker vs freight forwarder, here are the differences that set these professions apart. 

Freight Forwarder

Freight Broker

Takes a hands-on approach, storing and handling shipments Takes a hands-off approach and never handles cargo
Offers consolidation of packages, breaking up bulks, and packaging Never comes into contact with or alters the state of packaging or goods
Can not work from home due to the physical nature of the job Can work from home easily since they are mainly dealing with negotiation and logistics
Assumes legal liability since they take possession of the freight Never legally responsible for the freight since they never come in physical contact with it
Uses their own bill of lading, shipping freight under their own operating authority Is given bill of lading by cargo owner 
Frequently prepares large volumes of paperwork for clients relating to their shipments Deals with some paperwork such as carrier packets, but less than freight forwarders
Carriers are responsible to the freight forwarder Carriers are responsible to the cargo owner
Can work on commission but often has a flat rate salary. Usually has a base salary + commission based on the difference between what the shipper pays and the freight rates secured
Frequently handles international shipping Doesn't typically handle international shipments, with the exception of some brokers that specialize in certain regions.

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