Arik Bibicoff Contributor
Marketing Director at Eagle Express Service
now is the time
There has never been a better time to be in the freight business, especially as a freight broker. According to a recent article from DAT, the number of shipments, as well as revenue per shipment is at an all-time high. This is especially pleasant news because this is not normally considered a “busy” time of the year for the industry. Nothing but clear skies and lots of opportunities for freight brokers to capitalize in this solid economy. Companies are continuously looking for ways to save time, resources, and money. You will save them the headache of having to create their own shipping department, if they even have the capital to do so. Let them focus on their business, while you focus on yours. The results of this growth spurt in the number of freight brokers in the industry have yielded some interesting results. According to DAT’s reports from January of this year, freight brokers achieved record numbers – lead by a 41% increase in the volume of loads moved and a 26% increase in the revenue per load, compared to the numbers from the same time in the previous year (1). In addition, the Global Freight Brokerage Market 2017 – 2021 has projected the market to grow approximately 4% (2). The global need for transportation has lit the fuse for freight brokerage to begin scaling all around the world.
make a lot of money
This varies due to a wide assortment of factors, not limited to but including: location, time allocation, work ethic, and resources. The freight broker works independently, meaning he or she works from home or a home office. They set their own schedule and ultimately decide on how often they want to work, as well as how much they want to make. The position is really designed for the highly-motivated and entrepreneurial self-starter. Those types of individuals tend to move the most shipments, and by default, make the most money.
To provide some sort of statistical estimates, an experienced freight agent with a consistent customer-base can make anywhere from $60,000 - $250,000 in profit annually. So, what’s the difference between someone whose earnings gravitate to the lower end of the spectrum versus reaching the upper echelon? There are three primary contributors, the quality of relationships and service with customers the agent has, how many shipments they’re moving for each customer, and the profit margins being held on each shipment. A smart agent will do their homework to make sure they are obtaining the highest possible amount from their customers to move each shipment while negotiating the lowest rate available with a trusted carrier. When you’re being compensated strictly on commission, you or your dispatching team must understand the importance of maintaining a substantial gross profit margin. At the end of the day, freight brokers and individuals looking to become freight brokers need to understand the importance of working with a company that is going to pay you out as much commission as possible. Otherwise, you’re leaving your hard-earned money on the table. With the income potential being that it is, it can be a very lucrative opportunity.
Due to the rise in popularity, freight brokering has experienced an increase in employment numbers.
The Bureau of Labor Statistics listed occupational employment and wages from May 2016, which read:
Employment RSE – 2.8%
Wage RSE - 0.9%
Some may question if there is going to be continued growth due to the saturation of brokers in the industry. However, an increase in brokers usually suggests there is an opportunity for substantial income potential awaiting them on the other side. The US Bureau of Labor Statistics reported in 2010 that the freight broker industry will grow by 29% by the end of the decade. In comparison to the growth rate of other jobs, freight brokering is anticipated to grow upwards of 14% more.
IS FREIGHT BROKERING FOR ME?
First, you must understand the type of lifestyle that comes along with being a freight broker. Most days, you'll be receiving phone calls from drivers in the early morning regarding updates on their location, arrival at their destination, or in some cases, an issue with the delivery. You must be readily available to take these calls to ensure the successful arrival of your shipments. This is not your 9-5 job, you must be ready to handle situations with drivers virtually 24/7. If you're willing to put in the man hours, you have no ceiling when it comes to your income potential. The workload, however, is constant and requires you to roll with the punches as you face different obstacles along the way. The only way you'll really know if freight brokering is a career choice for you is to give it the old college try. If you are going to divulge into the industry, it is wise to partner up with a company that can provide you with the essential tools for running a profitable brokerage: factoring services, back-end administrative support, modern technology, and a solid industry reputation.