How Much Can A Freight Broker Make?

One of the most common questions I get from freight brokers is “How much can a freight broker make?” My answer is almost always the same, “It depends.”

Generally Freight Brokers can make very good money. I have seen many make hundreds of thousands a year, but I’ve also seen a few make next to nothing. The wonder of the profession is that there is no cap on what a person can make. You are only limited by the amount of business you can do. Therefore if a person is dedicated, hard working, and skilled in business and as a salesperson they can make much more money than many other professions could provide.

From my experience I would venture to guess that the average established Broker makes between $100,000 and $150,000 a year. That’s not bad for a profession requiring no college degree, certifications, or state exams. Among startup opportunities out there it is also one of the most affordable. A brokerage requires very few costs for startup.

So how does a freight broker make all this money? It’s pretty simple, really. When a company wishes to move a load of freight from one point to the other, he will pay for it to be moved. When a shipper uses a broker, he pays the broker to move the freight, only the broker does not actually move the freight, but rather possesses the contacts and resources to find the right person to do the job. The broker turns around and pays a carrier a lower price to move the freight than what the shipping company paid the broker. This difference is called a “spread” and is the broker’s margin or profit once operating expenses are paid for.

So if you charge a company $2,000 to move a load, and pay a carrier $1,850, you will retain a margin of $150. Each load will vary, but the current industry average spread per load is probably somewhere around this figure. Now is the most important factor that decides how much a broker makes. How many loads can you move per week? Most getting started out will move about 1-5 loads per week, once established you might move something like 5-10 or more loads each week. You will see that your annual income as a Freight Broker, then will vary directly by the number of loads you move.

For example, if a person moves an average of 5 loads per week at $150, it will amount to about $39,000 each year. If you move an average of 10 loads per week at the same margin, you’ll be making around $78,000 per year. It obviously would continue up from there.

One thing to keep in mind is that no one ever moved a load without knowing how to and being familiar with the transportation industry. If you hope to be successful as a freight broker you will need either experience in the transportation industry, an education in freight brokerage, or preferably both. A few excellent freight broker schools have been established to teach students exactly how to be successful.

Educate yourself on possibilities, learn how to broker freight if you do not already know how to, and get to work. It is an extremely rewarding and lucrative industry to get started in. Check out salary.com for more information on broker incomes.

About Broker Pro

Freight Brokerage Business Pro.
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