There’s really no single answer to give! If you hear anyone give you a concrete answer they have not considered all the variables.
What makes this question so hard to answer? A number of things need to be understood to really pinpoint what the average salary of a freight broker might be. Lets address the question word by word.
First, lets look at “freight broker”. What is a freight broker? There is a big difference between a “freight agent” and a “freight broker”. A freight agent is someone that is a contract worker for an already established transportation brokerage. On the other hand, a freight broker is someone that works independently as a business owner who has all the necessary insurance (surety bond) , licensing (brokers license, business license, etc.) and office materials to operate a work-from-home or self-employment office. It is a lot easier to determine what a freight agent’s average salary is, but since this question is about being a freight broker, we will continue to look at a “broker’s” salary potential.
Second, lets look at “salary”. Understanding the definition of a “freight broker” would technically make the word “salary” a misnomer. As a self-employed business owner, you wouldn’t necessarily have a “salary”, more just income. This does depend on how you setup your business, whether it be a Corp, LLC, Sole Proprietorship, etc. These different business classes have different rules and structures that would determine if you have a salary or just income. Regardless, the term “salary” often implies a set or static number, which a broker shouldn’t contain themselves in because their salary can be limitless.
So we’ve covered the verbiage, now what’s the answer? We just touched on it, but a real answer could be that a freight brokers’ “salary” is unlimited. A broker can make as much money as they can secure. Some brokers are one person handling all parts of the brokerage operation, others reach out and hire employees, and others contract out certain services to third-party providers. All these will affect your end salary but ultimately, the brokers level of motivation and ability to manage the different parts of freight brokering, will determine how successful and how much money they will make.
Commitment is the most important factor and the one you need to consider most when asking yourself what your salary potential is.
Some freight brokers get all setup, pay all the fees, get all the paperwork, and then never make the calls. They make $0 annual salary. Thousands of brokers fall into this category and are actually part of the number skewing the facts on how many brokers are out in the market. These brokers are considered “inactive” and while they may have active licenses and be counted in the books, they make little to no impact on the market.
Some brokers get motivated and stay motivated through the first few months but just as they start to see a return, they stop making the calls, or begin to rely on their existing customers too much, and business plateaus. Others work hard consistently through the year but just can’t seem to meet their goals each week, whether it be because of seasonality, market changes, sales ability, personal needs, etc. If both these groups can maintain a small number of customers throughout the year, lose a few – gain a few, but always have a few things moving, they may make anywhere from 15-45k. 80% of all brokers fall into this category.
Still, some other freight brokers excel in sales and business management and are able to properly steer each aspect of their business. These brokers may see returns as high as 100k+ (and well over.) These freight brokers tend to have small offices and a couple part-time or full-time employees to assist them. There are many freight brokers who have realized these returns and it is a very real number, but there are more who have not. For those that are able to take on the entrepreneurial spirit a freight broker must have, they have the potential to make a uncapped, unlimited “salary”.
An equation you might consider using when trying to determine your salary:
(# of loads/wk.) x (margin/load) = Income
(income) – (expenses) = Salary
This is extremely simplified but if you add all the variables that fall into each of the factors, you will have a semi-accurate idea of what YOU might make as a freight broker. Remember # of loads is based on your ability and determination. This could 3/mo.; 3/wk; or 3/day. If your moving something everyday you will be in good shape. The industry average margin/load is approx. $250. Play with those numbers and see where you fall.
There are different ways to get into the industry but there is no requirement for training other than what the individual broker or prospective broker thinks is necessary. Its often a very good first step by may not be for everyone. Some people enter by taking a freight broker class, others start by working with a brokerage company as a sales rep and build a book of business then set out on their own, while others just go to the licensing office and apply for the necessary paperwork and start making calls and building their own business from scratch. Whether you attend a freight brokerage school or do it on your own, your salary will be determined the same way as stated above the most important factor is, YOU.