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Shipping and Freight

Can anyone help me in understanding how does the freight broker operate his business in the freight industry?

Answers 1

Firstly, understand that a Freight Broker is the third part company that builds a bridge between the freight carriers and the freight customers. Freight brokers do not own the freight carriers, hence both are different part of one same business. The primary purpose of the freight broker is associated with lower shipping rates from the carriers due to volume. On the other hand a freight carriers primary purpose is to transport the shipment from one point to another. Volume or the bulk shipment is the key, which helps freight brokers get a better rates than the customers going directly to the carriers. A freight broker will have multiple customers that ship under their account, and this number can stretch from hundreds to thousands of customers. With freight brokers bringing all this business to the carriers, they are in a higher position of power than your average shipper. This power enables them to negotiate lower rates and contracts that are unavailable to the typical consumer. The freight broker can then pass these lowered shipping rates to their customers. This is the most basic service offered by a freight broker: cheaper shipping rates. While this is the primary business that generates revenue for the brokers through commission, other part of the business includes providing customer services - such as call and tracking system, scheduling pickups, dealing with delivery issues, claim issues or handling other collateral situations.


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