Professionals known as freight brokers serve as a bridge between shippers and carriers. They support shippers in determining the best carrier for their freight and settling on a price and delivery schedule. Many people ask if freight brokers are in demand because they have become more and more in popularity in recent years. The short answer is yes, there is a demand for freight brokers. Freight brokers are crucial to ensuring that commodities are moved effectively and affordably in the increasingly expanding logistics sector. The Bureau of Labor Statistics projects that employment of freight brokers will increase by 7% between 2019 and 2029, which is faster than the average for all occupations.
Dispatchers and freight brokers are two distinct occupations that are equally important to the logistics sector. Despite the fact that they both collaborate closely with shippers and carriers, their roles are distinct. The interaction between shippers and carriers is managed by freight brokers, who also negotiate rates and contracts. On the other side, dispatchers are in charge of making sure carriers are following rules and that shipments are picked up and delivered on time.
Generally speaking, freight brokers make more money than dispatchers. Payscale reports that the average annual income for a dispatcher is $41,000 while the average annual salary for a freight broker is $48,000. However, depending on experience, geography, and other factors, the pay for both occupations might differ significantly.
The average fee for freight brokers is a percentage of the entire freight cost. Depending on the broker, the kind of freight, and the intricacy of the shipment, the percentage may change. The average broker commission in 2020 was 15%, according to DAT, a top supplier of statistics for the transportation sector. For large-volume, low-margin shipments, this can be as low as 5%; yet, it can also be as high as 30% for specialized or challenging-to-move freight.
With a market share of 7.6% in 2020, C.H. Robinson was the biggest freight brokerage company in the world. TQL, Echo Global Logistics, and XPO Logistics are three further significant competitors in the sector.
In conclusion, the logistics sector has a significant demand for freight brokers. They are essential in establishing connections between shippers and carriers and ensuring that items are moved effectively and affordably. Generally making more money than dispatchers, freight brokers charge a fee based on a percentage of the overall cost of the shipment. With a market share of 7.6% in 2020, C.H. Robinson will be the largest freight brokerage company in the world.