Do you ever wonder, “how do freight brokers make money?” Many do, and often. Brokers have significant responsibilities in modern freight management, including the creation and execution of loads, tracking service provider performance through carrier scorecards, and much more. Unfortunately, those value-added services are often overshadowed by the misconception that brokers provide simple operations and rely solely on connections. But consider the data surrounding freight brokers.
The U.S. Bureau of Labor Statistics (BLS) reports that cargo and freight agents’ employment will rise 2.6% annually for the foreseeable future.
Meanwhile, the freight brokerage sector will grow an astonishing $41.47 billion between 2020 and 2024, reports Technavio. And yet, the questions remain, “how do freight brokers make money, and what can freight brokers do to make the most money per load?” SONAR is helping to empower the growth of this vital transportation segment. But for reference, let’s take a look at the top six ways for how freight brokers make money.
For both asset-based and non-asset-based freight brokers, providing that connection point between loads and data is essential. Through data, brokers:
Asset-based brokers manage company assets, including trailers and drivers. When the assets are reallocated to in-demand markets, it’s easier to take advantage of backhaul opportunities and maximize profitability per load.
Reallocate assets to in-demand markets for backhaul opps & profitability per load.
Brokers possess carrier-like qualities, identifying trends in shipper activity, and helping carriers get better profit margins by:
Carrier accountability remains a top priority for all types of freight brokers. Since the question, “how do freight brokers make money?” implies a need to understand both carrier and shipper views, they are more likely to hold carriers accountable in:
Brokers are the real middlemen of the industry. They look beyond the market activity to understand what’s happening and what needs to happen. In turn, they apply data to build out new relationships by:
Shippers are in the business of producing and selling merchandise; they are not transportation experts. Simultaneously, it can be difficult for shippers to trust carriers to provide the best and correct freight rates. For that reason, brokers effectively save full-time equivalents (FTE) for shippers by taking on the burden of transportation management, including:
Someone will always ask, “how do freight brokers make money?” There’s a real concern behind that question. If the transportation sector is already operating on razor-thin margins, how can a broker survive? Well, freight management segments need to look at the facts – brokers are much more than just a pass-between in logistics. They provide a host of services that may even include moving freight when operating as an asset-based broker. And the best way to maximize the ROI across all these processes is using near-real-time, data-driven insights in all operations. Schedule a SONAR demo online now to learn more about to maximize the profitability of your brokerage now.