One of the first things people want to know when considering working in the transportation industry as a freight broker is what kind of salary they can expect in this business.
How much does a freight broker make?
The average freight broker salary in 2022 is between $40,000 and $75,000 per year, while the national average in the U.S. is $61,200. That number can vary depending on things like your location where you live, your book of business, experience in the field, and whether you’re an independent broker, or you work for one of the large freight brokerage companies.
There are a variety of factors that affect how much you can earn and we’re going to explore each of those factors in detail below.
How Much Does A Fright Broker Make?
The estimations for how much a broker earns vary wildly.
Some estimates are in the low $30,000 range, while others are in the mid-$60,000 range.
To get an accurate understanding of freight broker salaries, you must understand the process of making money in the freight brokerage business.
The reasons for this wide range of salaries is because of 4 main reasons:
- The location where you live
- Your book of business
- Your level of experience in the field
- What kind of broker you are – whether independent or as an employee
Industry jobs will differ and some may require additional skills to elevate yourself into a salary range that you’re more comfortable with.
How Much Does A Freight Broker Make Per Month?
The amount you take home per month will vary based on the things mentioned before, like experience level, location and where you work.
The numbers below are average, pre-tax numbers, so your take-home pay will differ based on things like your tax bracket and withholdings in your state.
The title you hold and your responsibilities in your organization will also affect what you can earn in the transportation industry.
Here’s a sampling of the national average for salaries in 2022 for different roles in the freight industry.
|Job Title||Annual Pay (average)||Monthly Pay (average)||Weekly Pay (average)||Hourly Wage|
|Freight Broker Dispatcher||$45,600||$3,800||$877||$21.92|
Your Location Affects What Salary You Earn
Let’s start with the most obvious reason why freight brokers’ salaries vary so widely.
Location plays a huge role in determining what you can earn.
If you live in a major city, then it’s likely you’ll be able to command higher pay than if you lived in a small town. Why? Because there will be more demand for your services.
If you live in a smaller city, then you might have to compete with other brokers who also live in that area. This means that you could end up earning less than someone else who lives in a larger city.
In addition, the state you live in will affect how much you can earn as well.
For example, in Florida, the average salary for a freight broker is just under $32,000 per year according to salary.com. In California, however, the average salary is over $35,000.
But not all things are as they seem!
Keep in mind that the cost of living also varies greatly state to state and even within a state as well.
For instance, the cost of living in a state like California is greater than living in a state like Oklahoma.
And the cost of living in Los Angeles county is different than living in Humboldt county.
In addition, In some states you’re required to pay a state income tax in addition to the Federal income tax all are required to pay.
So that difference in salary could be eaten up by the additional taxes and cost of living in one state vs. another.
What Are The Highest Paying Cities For Freight Brokers In The United States?
Location plays a huge role in your earning potential as a freight broker.
However, we wanted to know which cities had the highest paying freight brokers. So we did our own research and found out what cities were the best places to make money in the freight brokerage industry.
According to the data we’ve collected from Indeed.com and other sources, the following cities are the highest paying cities for freight brokers in the U.S.
|Location||Annual Salary (average)||Monthly Salary (average)|
|Little Rock, AR||$88,367||$7,363|
|Las Vegas, NV||$69,468||$5,789|
|Santa Clara, CA||$54,192||$4516|
Your Book Of Business Can Also Impact Your Paycheck
Another factor that affects freight broker salaries is the size of your book of business.
A bigger book of business typically translates into making more money.
Because the more customers you have, the more revenue you bring in. And the more revenue you generate, the more money you can make.
The best way to be successful as a freight broker is to build a great network of connections.
Here’s the truth:
If you don’t have great connections, build up a great customer base of shippers and trucking companies, and a great network of resources, you will struggle as a freight broker.
It’s one thing if you work for a freight brokerage firm, but quite another if you want to be an independent broker.
The key to building a great network is to serve others.
Never go into any relationship with “what can you do for me” approach.
Instead, find ways to make the lives of those you want to build connections with easier.
This approach to networking for freight brokers will help you get more clients and ultimately increase your earnings.
How Does A Freight Broker Earn Money?
Freight brokers earn money through earning a salary and being commissions on the loads they book.
We’ll talk more about what those numbers are in just a minute, but the process of making money in the freight brokerage business is pretty simple.
When a company wants to move a load of freight from one place to another, they will pay for the cost of transportation.
Therefore, the client of freight broker pays the broker to move the freight. However, it’s not the broker who moves the freight, but instead uses their contacts and resources to find the right person for transporting the goods.
In this process, the broker pays the transporter lesser amount to move the freight than the amount it got from its client.
The difference of these two amount is called a “spread” and this “spread” is the profit of a freight broker.
For example, if a freight broker charges a company the market price of $1000 for a 500 mile trip and finds a trucking company who can haul the freight for $750, then the broker has made a profit of $250.
The most important factor that decides the broker’s overall weekly income is the number of loads they can move per week. Some brokers are able to move 1-3 loads per week, while other can move 8-10 loads per week. Also, the spread for each load may vary.
Average Salary of A Freight Broker
The nationwide average freight broker salary is nearly $61,200 per year with another $28,000 coming in terms of sales commissions.
The yearly earnings of independent freight brokers can be much higher and easily exceed $100,000 to $150,000 per year.
However, there are many factors that can influence the average freight broker salaries.
These factors include location, company, experience, benefits, skills, etc.
A proper understanding of these factors can help aspiring freight brokers in taking decisions that will enable them to get good salaries.
Top Three Factors Influence Freight Broker Salaries
The three most prominent factors that influence the average freight broker salaries are discussed below. Some of these factors influence the salaries more as compared to other factors, but each factor is important while considering the salary that an aspiring freight broker can expect from this occupation.
The experience requirements are most important factor that can influence the salary of a freight broker.
Entry-level: An individual with 0-5 years of experience is considered entry-level freight broker. They are newcomers with no experience in the field. Typically, they earn less than the nationwide average salary of a freight broker.
Mid-level: A professional with 5-10 years of experience in this business is considered as mid-level freight broker. The average salary of mid-level freight broker is more than $50,000 per year, not including commissions.
Experienced: A professional with 10-19 years of experience in this business is considered as experienced freight broker. The average salary of freight broker in this category is more than $60,000 per year.
Late-career: Most of the freight brokers move on to other positions after spending 20 years in this profession. Therefore, people with 20+ years of experience are considered to be in the last stage of their careers as a freight broker. The average salary of late-career freight brokers can be up to $80,000 per year.
Having good skills is another factor that is associated with high salary in this occupation. The skills in this business includes creating contacts and providing efficient services.
Contacts: The database of contacts is an important factor that differentiates a high earning and low earning freight broker.
A skilled freight broker builds a vast database of contacts by using methods like personal networking, exploring professional associations, doing internet research and going through various other resources. These contacts then act as a foundation for earning a high salary in this profession.
Efficient services: Freight brokers who can deliver quality shipping methods at affordable prices have a great chance of developing lasting business relationship with their clients. Most of the times companies need long-term freight broker services. Therefore, by providing excellent service you can expect repeat business.
The average freight broker salaries are also influenced by the state where they are providing their services.
According to the Bureau of Labor Statistics, the top paying states for this occupation are Connecticut, District of Columbia, Washington, Oregon and Nebraska. The average freight broker salaries for all these states are more than the nationwide average freight broker salary.
Differences Between Freight Brokers and Freight Broker Agents
Freight broker agents are the professionals who work for freight brokers. A licensed freight broker carries all the liability and has to comply with federal and state regulations regarding the transportation of freight.
Typically the job requirements of a freight agent are different because they have less experience and fewer resources than the broker and is going through a learning curve in this business, and therefore earn less.
Most of the clients of freight broker agents are shippers that have a small business and need transportation of low volume freights.
Therefore, it’s no surprise that a freight broker agent earns less money than freight broker.
Difference In Earning Potential Of A Freight Broker And A Freight Broker Agent
The nationwide average freight broker agent salary is nearly $35,600 per year.
Therefore, the earnings of an agent is much less than the earning of a broker, but the start-up cost of being a freight broker agent is also very low.
Becoming an agent for a freight broker, whether it’s an independent broker, or a large firm, is a great way to get started building your experience in business.
You will have the opportunity learn about customer acquisitions, how to book loads, and develop the professional skills you need to be successful in this career.
The job of a freight broker can be very exciting, but also very demanding.
However, if you work smartly and have the patience then in due time, you will build a strong client base, build great relationships with clients and expand your network, all of which will make your job highly rewarding.