Freight brokers are intermediaries between shippers and carriers, responsible for negotiating agreements and facilitating the movement of cargo. They earn their living by calculating the difference between the amount a shipper is willing to pay to ship the freight and the shipping fee that the freight agent then negotiates, known as propagation. When selecting a freight broker, it is important to consider three factors: gross revenue, gross margin, and longevity. Gross revenue is what a freight forwarder charges to customers, while gross margin is the difference between what a freight agent charges a customer and the cost of the transport purchased or the amount that a freight agent pays the carrier to move the load.
Longevity is earned in this business and brokers who understand the balance between making profits and saving their customers money tend to be successful. If you need to process a large amount of cargo in a short period of time, a freight agent has the experience needed to handle it for you. They are responsible for negotiating agreements with shippers and then facilitating the movement of the shipper's cargo. By taking advantage of their relationships with carriers and their knowledge of the transportation world, brokerages with a track record in this industry save their customers money at any time. SONAR has its own data that comes from real cargo tenders, electronic recording devices and transportation management systems, along with dozens of external providers of global indices related to transport and logistics, such as TCA Benchmarking, Freightos, ACT, Drewry and DTN.
Carriers also like working with freight agents to optimize their routes and minimize lost miles, increasing their profits in less time. If you're new to the freight logistics and road transport industry, you've probably heard the term freight forwarder, but you may or may not know what they can do for you and your company. At the end of the day, any freight brokerage agency that doesn't serve customers and maintains relationships with shippers before their bottom line will not prosper.
