Unlike automotive brokers, whose function is to assist buyers when they purchase a new vehicle, truck brokers, often known as freight brokers, help companies arrange shipping services with independent freight lines or owner/operators. Truck brokers also arrange and manage billing and payments for the freight lines with whom they work. Most brokers work on commission rather than on a base salary many are self-employed and their earnings fluctuate with their ability to make deals and the volume of goods shipped in any given period.
Although they may not receive a consistent salary because their earnings are tied to their job performance, truck brokers earn $39,000 annually as of July 2011, according to SimplyHired.com. Brokers who work strictly as agents, handling pickup and delivery scheduling for clients but not assuming billing and payment processing responsibilities, earn smaller salaries because of their decreased responsibilities. Freight agents earn an average annual salary of $34,000, according to SimplyHired.com.
Salaries by Region
Freight brokers who live in large metropolitan areas may expect to earn higher salaries than the industry average. Virtually all cities reporting salary data to SalaryExpert.com earned significantly more than the national average. Freight brokers who work in New York receive the highest average annual salary, $76,349 as of July 2011. Those working in Chicago and Houston also earned some of the largest average salaries, earning $73,381 and $73,173, respectively. Sixty percent of the cities reporting salary data to the website reported average earnings between $54,924 and $60,672.
Truck brokers who work for themselves are free to set their commission rates at whatever they find necessary. Rates may be influenced by the amount of competition in their market. Many truck brokers charge a commission of 17 percent for their services, while freight agents often work for an eight percent commission. To earn average salary figures listed by SimplyHired.com, a truck broker would need to book more than $229,411 in freight charges in a year, or a freight agent would need to arrange for $425,000 in shipping fees.
Licensing and Bonding
Because they also handle billing in addition to logistics, freight brokers must be licensed like any other type of broker. To operate as a freight broker, the Federal Motor Carrier Safety Administration (FMCSA) requires brokers to be bonded and licensed. Brokers must receive broker’s authority recognition from the FMCSA and processing agent status. Brokers must also carry at least $10,000 in surety bonds in order to operate.