How to Make Money in Logistics and Shipping as a Freight Broker Agent

The job of a freight broker agent is to connect shippers who have goods to transport and carriers who have the capacity to move those goods. Today’s freight brokerage market is rich with opportunity, and it is essential to know what it takes to be successful -- and profitable -- from the start. That begins with recognizing the most common reasons why new freight broker agents fail, and how to avoid these pitfalls whenever possible.

Not planning for capital expenses

The financial barriers to entry into the freight brokerage business are not as high as other transportation or logistics companies. That does not mean that overlooking necessary startup expenses and future financial needs is a smart choice. New freight brokers need to be aware of the costs associated with starting the business, including but not limited to:

• A laptop and cell phone for business use

• Potential office space

• Branding and marketing costs

• Freight broker licensing and bonding expenses

• Technology for managing the business

• Outsources professionals, such as an accountant or bookkeeper

These costs can add up quickly, and freight brokers who are not prepared with financing or cash on hand to cover them may not have the ability to stay afloat for long.

Overlooking marketing needs

The freight brokerage industry is highly competitive, with newly licensed brokers entering the market each year. With so many options, shippers and carriers need to know that your brokerage is both available and able to take on new business. Creating a marketing strategy is necessary if you want to remain relevant to your current or potential customers. Consider options for print or radio ads, as well as technology-driven marketing campaigns through e-mail, social media, or the web.

Missing networking opportunities

Although marketing is a necessary component of being a successful business owner, networking can make all the difference in making the right industry connections. For freight brokers new and old, having the ability to meet and build relationships with other industry professionals, including other brokers, is a helpful aspect of business growth. Seek out opportunities to network, whether in person or through online forums and commit to following up with contacts you gather in a timely fashion.

Failing to communicate with prospects and customers

Because there are so many freight brokers in the industry today, being able to communicate effectively with prospects and current customers is a must. Not returning phone calls or e-mails, avoiding uncomfortable calls when loads do not go as anticipated or failing to provide accurate information during any part of the sale process can be devastating to your business. Have a plan for communication with prospects and customers so that they feel valued.

Setting rates incorrectly

Another common mistake among freight brokers is the inability to set rates correctly. Pricing services too low can lead to a loss instead of profits for the business, even though it may generate more customers. Alternatively, pricing on the high end of the spectrum may turn customers away over time.

Failing to stay educated

As with many other professions, having the most up-to-date training and education is crucial not only to personal development but as a business owner as well. 

Mismanaging time

Getting into the freight brokerage industry takes some industry experience as well as business connections, but those don’t get brokers far unless they are willing to put in the work. Acquiring new customers, creating new opportunities, and staying on top of business management all require time and effort. The most successful freight brokers determine the most efficient ways to manage their time, often outsourcing tasks to other professionals when it is beneficial to the business.