freight agent commission rate

How Much Can a Freight Broker Make?

Freight Brokerage has the potential to yield high annual revenues with exciting profit margins! Depending on various factors, including number of customers, volume of shipments, and profitability on those shipments, a freight broker can make between $50,000 (inexperienced) and $500,000 (very experienced) per year.

1-3 Years Experience: $50,000 - $100,000

4-6 Years Experience: $100,000 - $250,000

7-10 Years Experience: $250,000 - $350,000

10+ Years Experience: $400,000+

Should I Consider Being A Freight Agent?

If you are interested in being involved in logistics but don’t want all of the responsibility of running your own company, there is a solution for you. By working for a brokerage, you can use their insurance, bond, and authority in exchange for a percentage of your revenue or profits. A freight agent has the same job description as a broker, minus the headache of dealing with the day-to-day operations of the business. Due to these requirements, logistics professionals often turn to a position of lesser responsibility as an independent freight agent.

As an agent, you are not required to have a license and do not assume any risk of the client’s creditworthiness. You also are not required to have a bond, since your broker would be the one responsible for collecting/administering payment. However, a broker is likely going to require some percentage of your revenue/profits, so it is a worthwhile investment for them to cover operational costs of having you on board. Aside from that, freight agents have the same tasks and responsibilities as a broker, they just mitigate the risk.

How Much Does A Freight Agent Make?

In some cases, brokers will seek out agents that work independently, where they are not obligated to pay the agent a base salary. These agents often accrue a higher income, for they are granted much more aggressive commission splits, to compensate for the lack of base salary. According to Freight Tec, companies within the industry offer commission splits that range from 25 – 70% being paid to the agent.

The amount of commission varies depending the third-party logistics company/freight broker you work for and how they structure their agent’s compensation:

  • Large 3PL Companies (Landstar, LDI, Armstrong, etc.) — [50-70%] commission

  • Mid-sized 3PL Companies (Eagle Express Service) — [100%] commission

Strive To Be In The Top 5-10% Of Earners

If you’re looking to become or already are a freight broker, you’re typically looking to earn as much money as possible within the scope of your capacity. I can assure you that being in the top 5-10% of freight brokers in terms of revenue for your size company, will make the long hours and hard work worth it. Ultimately, it depends on the experience, availability, and work ethic of the agent. To increase your customer base, use these strategies to increase your customer pipeline by working on leads with a high rate of conversion!

Demand For Freight Brokers/Agents

The rapid growth cycle of the logistics industry has led to a rise in the number of freight broker agents. The U.S. Bureau of Labor Statistics will grow by 29% by the end of the decade, which is over double the 14% growth rate for other jobs. With the increase in popularity within the position, there are often questions from people working in other fields about how to break into the industry. Unfortunately, it is not that simple. For those who have been in the industry for a large portion of their professional careers, you can attest to this. The world of freight brokering is very different from a traditional business setting, with lots of technology and jargon that must be thoroughly comprehended before committing to a career as a freight agent. All the freight broker courses and training provide you with general knowledge of the tasks required for a freight broker/agent but cannot portray the level of persistence necessary to obtain shippers, know when to adjust rates to accommodate for market fluctuations, or when to get tough during negotiations with carriers to protect your profits.

Make Good Money As a Logistics Account Manager

Like the idea of facilitating communication between customers and carriers but don’t like sales? Become a Logistics Account Manager and get the best of both worlds!

According to a list of salaries from Bureau of Labor Statistics, a Logistics Account Manager that’s salaried will likely make around $3,200 – $5,000 in salary per month. In addition to salary, account managers may sometimes earn a commission off each load they move.

In my professional experience speaking with employees in this type of role, a commission could range between 8 – 12% commission per load they move. If an agent is booking an average of 10 loads per week at $300 margins and 10% commission per load, then you’re looking at a total monthly income of $4,400 – $6,200. Not bad moving someone else’s freight. How does the total income of a logistics account manager compare to that of a full-fledged broker or independent agent?

Work Within Your Capabilities

As stated previously, there are a lot of different factors that can affect the income of a freight agent. One of the biggest factors is the compensation breakdown, which is ultimately decided by the broker. The highest, most accommodating compensation plan is going to be the one that benefits you the most.  Size, assets, and the company’s business model all play a role in determining the commission structure for agents. A large, asset-based company can usually get away with paying their agents a lower commission because of they offset it with the trucks, a reputable name, and hefty financial backing. As an agent, this may impede on some of your profits, so be sure to evaluate what is going to be the most beneficial to the financial health of your business.