A freight broker is an

intermediary An intermediary, also known as a middleman or go-between, is defined differently by context. In law or diplomacy, an intermediary is a third-party beneficiary, third party who offers intermediation services between two parties. In trade or barte ...

between a shipper and a freight service provider. Freight brokers can specialize in certain types of freight, such as equipment hauling on lowboys, oversize, bulk tanker, auto, or other types of freight transportation. A freight broker in the United States must be licensed by the Federal Motor Carrier Safety Administration (FMCSA) and be granted authority as verifiable via the FMCSA Licensing & Insurance database. A freight broker, in freight transport (

cargo In transportation, cargo refers to goods transported by land, water or air, while freight refers to its conveyance. In economics, freight refers to goods transported at a freight rate for commercial gain. The term cargo is also used in cas ...

), over

land Land, also known as dry land, ground, or earth, is the solid terrestrial surface of Earth not submerged by the ocean or another body of water. It makes up 29.2% of Earth's surface and includes all continents and islands. Earth's land sur ...

in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

truck A truck or lorry is a motor vehicle designed to transport freight, carry specialized payloads, or perform other utilitarian work. Trucks vary greatly in size, power, and configuration, but the vast majority feature body-on-frame construct ...

is often used as part of the

logistics Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the Consumption (economics), point of consumption according to the ...

. This may be part of an overall shipbroking using a cargo broker, a freight forwarder, third party logistics broker (3PL), and even a fourth-party broker, when

outsourcing Outsourcing is a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally. Outsourcing sometimes involves transferring employees and assets from one firm to another ...

is needed (as opposed to in-house) for freight transportation. The brokering can be single mode or by

multimodal transport Multimodal transport (also known as combined transport) is the transportation of goods under a single contract, but performed with at least two different modes of transport; the carrier is liable (in a legal sense) for the entire carriage, even t ...

ation and can use specialized brokers on a permanent basis or as needed to ensure timely

traffic management Traffic management is a key branch within logistics. It concerns the planning, control and purchasing of transport services needed to physically move vehicles (for example aircraft, road vehicles, rolling stock and watercraft) and freight. Tr ...

. A load may be posted on a truck load board by shippers, brokers, or agents. This may occur with special orders, brokers and/or agents that do not have an established logistics base, or brokers and agents seeking a backhaul for a truck not in a high-traffic lane. Many brokers specialize in certain freight such as full truckload (FTL) or

less than truckload Less-than-truckload shipping or less than load (LTL) is the transportation of an amount of freight sized between individual parcels and full truckloads. Parcel carriers handle small packages and freight that can be broken down into units less ...

, auto, boat or

yacht A yacht () is a sail- or marine propulsion, motor-propelled watercraft made for pleasure, cruising, or racing. There is no standard definition, though the term generally applies to vessels with a cabin intended for overnight use. To be termed a ...

, bulk tanker (

liquid Liquid is a state of matter with a definite volume but no fixed shape. Liquids adapt to the shape of their container and are nearly incompressible, maintaining their volume even under pressure. The density of a liquid is usually close to th ...

dry goods Dry goods is a historic term describing the type of product line a store carries, which differs by region. The term comes from the textile trade, and the shops appear to have spread with the mercantile trade across the British Empire (and Common ...

), oversize, equipment hauling on lowboys, flatbed, drop deck, or any other mode of freight transportation with enough loads.

Co-brokering

Co-brokering is a legal practice used to ensure there is an available truck to transport freight. A 4PL may use a 3PL broker to match loads with trucks, with a shippers knowledge. The primary broker will take a lesser amount of the fee and the secondary broker will book the load for transport receiving a larger share of the same fee.

Concerns

Double-brokering or rebrokering is illegal in the United States of America and occurs when a broker charges a fee then contracts the load to a second broker who will reduce the freight charge also collecting a fee that can be up to 15%. For example, an $1,150 load going 400 miles would net a carrier $977.50, but the same load double-brokered might result in $875.00 to the carrier. This margin on the second booking would net the broker an ''additional 14.3%''. The shipper may not be aware of this and will likely not be dispatched to pick up the load. This might have serious ramifications in case of an accident or incident, especially if there are operating issues with the carrier. Confusion on payment might lead to a possessory lien (as opposed to "freight charges held hostage."), a load not delivered, and lawsuits.

References

Freight transport {{transport-stub

Co-brokering

Concerns

See also

References