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Definition of a Freight Broker

June 11, 2019 Anna Young

Freight Audit Report & Analysis-1

Definition of Freight Broker

A freight broker is an individual or company that is contracted by a shipper to be a liaison between the shipper and a motor carrier to facilitate the movement of their property from origin to destination by accessing its vast network of carrier relationships.

Freight brokers make their money on the buy-sell spread it negotiates between the shipper’s billing rate and carrier’s invoice rate.

The Federal Motor Carrier Safety Administration (FMCSA) is the governing body a freight broker is required to obtain its license to operate legally.  

There are over 17,000 freight brokers operating in the US.  

The Transportation Intermediaries Association (TIA) is the industry association that provides leadership and direction to the logistics service provider industry.

Reasons Shippers Use Freight Brokers Include:

  • Saves Shippers from Adding Resources
  • Leverage Broker’s Technology
  • Save Shippers Freight Cost
  • Provides Scalable Capacity at Variable Cost
  • Knowledge and Expertise on Market Trends
  • Save Time by Accessing Capacity Quickly through its Vast Network of Carriers
  • Deep and Wide Motor Carrier Pool to Draw on for Contract Rates
  • Ensures Carriers Used on Freight is Legal

For more on freight brokers and how to leverage them for a competitive advantage: 

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