Are you considering a new career path? Or maybe you’ve taken an aptitude test that has told you you’d make a great freight agent. Either way, becoming a freight agent isn’t something you can become in a day, and there is a fair bit of information you need to know about the role before you decide whether it’s right for you.
Luckily, we have everything sorted for you as we have put together a detailed guide to help you out. Below is all you need to know, from the qualifications and skills you need to become an independent freight agent to the best ways to start your own freight agent business.
Let’s get started.
What is a freight agent?
In the intricate network of the supply chain, the freight agent stands as one of the most pivotal players. Often an individual, sometimes a team, they work under a freight broker or brokerage firm, helping the shipping process and ensuring it goes as smoothly as possible. As crucial intermediaries, they bridge the gap between shippers with goods to send and carriers who get these goods from origin to destination.
These agents are armed with deep knowledge and manage a wide range of tasks. They fine-tune logistics, negotiate shipping costs, and liaise between all parties involved. Their insights ensure they come up with the most efficient pathways for their clients, keeping the flow of goods moving without a hitch.
Why are freight agents important?
Freight agents play a pivotal role in the supply chain, and without them, it would fall apart. Not only do they act as the main link between shipping and carriers, but they are also vital because they:
- Find the best routes for all shipments
- Negotiate with shippers and carriers on costs
- Ensure deliveries are made as swiftly as possible
- Maintain the flow of commerce in a global market
What does a freight agent do?
A freight agent is a skilled communicator and organizer, making them essential in the supply chain. But what exactly do they do? Here’s a deeper dive into what you can expect from becoming a freight agent:
Key responsibilities
The roles of freight agents can differ depending on their clients, but here are the most common key responsibilities throughout the industry:
- Helping find the most effective methods of shipment
- Coordinating freight shipments and carrier routes
- Finding and estimating the most cost-effective solutions
- Negotiating between shippers and carriers for clients
- Keeping clients updated on the status of shipments
- Preparing shipping and carrier documents
- Keeping records of all vital paperwork and agreements
Skills and qualities
If a client or a freight brokerage is interviewing you to become their freight agent, they’ll probably want to know what skills and qualities you possess. There are actually some that are highly desirable in the role, and these are some of the main ones you should have:
- Strong organizational skills
- High levels of shipping knowledge
- Ability to be self-sufficient
- Goal-oriented
- Eager to improve the process
- Excellent communication skills
- Works well in a team
- Self-motivated and competitive
- Confident and persistent
Freight agent vs freight broker
If you’ve already researched the role, you may have come across the terms ‘freight agent, ‘freight broker’, or ‘freight broker agent’ used interchangeably.
While some people may think they are all the same thing, there are actually some small differences between the roles:
Freight agents
We’ve already provided you with the definition of a freight agent, but what you don’t know is that for them to do their roles, they must work under a freight broker. This is because a freight agent doesn’t have their own operating authority and doesn’t have the legal go-ahead to arrange freight movement independently.
Therefore, the only way a freight agent can conduct business and cover their key responsibilities is by working with a freight broker.
Freight brokers
Instead of individuals, freight brokers are companies that arrange the movement transportation. They work with a freight agent or group of freight agents to cover all the logistics to ensure the shipping process goes seamlessly.
Freight brokers are required to have a property broker license from the Federal Motor Carrier Safety Administration (FMCSA) as well as the right insurance. These are the companies that will pay freight agents and take accountability for any loads moved.
Educational requirements of a freight agent
You don’t need too many qualifications to become a freight agent, as many people learn on the job or take internships and apprenticeships first. Therefore, freight brokerage companies tend to only look for freight agents that have a high school diploma. Of course, having a certificate or associate degree may put you ahead of the competition, but it isn’t something that’s required.
A reputable freight broker business will rarely hire you as their freight agent if you have no education combined with no experience, therefore, you should keep this in mind if you’re considering this as a career.
How to gain experience as a freight agent
If you’ve got a high school diploma and you want to dip your toes into the freight agent industry, then there are two main ways you can gain experience:
Entry-level positions
The likelihood of you being hired as the sole freight agent for a brokerage company straight away is low, so you need to opt for lower-paying entry-level positions first. You most likely won’t have as many responsibilities at first, but you’ll definitely get a lay of the land and be able to see what being a freight agent is all about.
You can most likely find these entry-level positions advertised with freight brokers looking for agents, or there may be the possibility of helping out other freight agents. It’s best to stay in one of these positions for at least a year, as it will help display the fact you have knowledge and experience as you work your way up the industry.
Internships and apprenticeships
If you’re struggling to find entry-level freight agent jobs with no experience, then you can always opt for an internship or apprenticeship. An internship most likely won’t provide you with any pay, and apprenticeships often pay very little, but they provide good freight agent opportunities for you to gain experience and increase your knowledge of freight agent jobs and the industry.
You can easily find a freight agent program that will include internships and apprenticeships with most logistics companies and freight brokerage firms. Look up reviews of the job before you get started, especially if they aren’t paying, to ensure you will get the most out of the experience.
Training course
While you don’t need specific degrees, you can’t go wrong with increasing your experience through a freight agent training course. This will be just like going back to school, except the lessons are specifically tailored to the freight industry and how to become an agent.
You’ll most likely have a combination of both technical and practical lessons. Again, like with the internships and apprenticeships, ensure you look up reviews of the course before getting started so you can check it’s reputable and gives you what you need.
Freight agent licenses and registrations
A freight agent doesn’t require a license as an independent contractor. However, if they are to carry out their work, they will need to work with a freight broker that has the following:
Broker authority license (FMCSA)
Freight brokers need to confirm that they are in compliance with the Federal Motor Carrier Safety Administration (FMCSA), which is why they require a license from this institution. This process starts by applying for broker operating authority by submitting Form OP-1 to the FMCSA. This costs between $300 and $600, depending on the structure of the business.
The next step is gaining a surety bond that ensures the company follows all the guidelines and regulations of the FMSCA. The required amount of this bond is $75,000. The freight broker must then choose a process agent and file BOC-3. The last step is to register through the Unified Registration System, which puts together all the forms and paperwork for the license.
Insurance
Not only does a reputable freight broker need a license, but they should also have various types of insurance too. These include the following:
- General liability
This is the most basic type of insurance that helps protect financial risk from third-party bodily injury claims that occur on the job. This is probably the most affordable type of coverage.
- Freight broker auto liability
This type of insurance isn’t required, but it will help with defense costs associated with a lawsuit against the business. It is most likely going to help in case there is a bodily injury or fatality where a motor carrier is involved on the job. It is best for a company to opt for a policy that covers up to $1 million per occurrence.
- All risk contingent cargo
If the freight broker agency uses LTL (less truck load) motor carriers, then they will most likely need this type of coverage. It is purchased on a per-shipment basis, where the costs for the coverage can be passed down to the cargo owners.
Learning about the industry
The best way to become successful as a freight agent is to have as much knowledge about the industry as possible. You can gain knowledge by doing the following:
Market research
The best thing you can do to put yourself ahead as a freight agent is to conduct market research. It is the best way to understand your clients, what makes your competitors successful, and help turn you into a successful freight agent.
You should conduct research on both your competitors and your target market. By looking at your target market, you can learn about their demands and what they want from a freight agent. Competitor research can help inform you on what other freight agents are doing right, as well as what they are lacking, so you can improve upon your own services.
Following industry trends
The freight industry is forever changing, and so are the demands of supply chain customers. Market research is one thing, but you always need to stay on top of recent trends to put you ahead of your competition.
There are several ways you can stay on top of industry trends. The best way is to pay attention to social media, especially Twitter, and ensure you follow big names in the freight business. You should also consider giving industry newsletters a try, reading interviews with industry leaders, as well as keeping an eye on your competitors.
Networking
No matter what industry you’re in, networking is essential to stay up to date with fresh new takes and increase your knowledge. There are various different ways you can network as a freight agent, and using social media platforms such as LinkedIn is the best place. Ask to connect with others in the industry, and you can ask to exchange tips and ideas with them.
You may also want to attend social mixers or freight conventions with like-minded people in the industry. Here, you get to talk to many others with more experience who can give you a helping hand in moving up in your own business.
Setting up your business
Most of the time, you’ll be working as a freight agent independently and looking to be hired by a freight broker. Therefore, you don’t need to set up your own business. However, you could be looking to become a group of freight agents, and therefore, you should follow these steps:
- Create a well-structured business plan
- Choose your business structure
- Look for capital to help with your startup costs
- Talk to investors about financing your business
- Develop industry experience
- Reach out to freight brokerage firms and start working
Finding clients and building relationships
You can’t handle many of your key responsibilities as a freight agent without working under a freight broker. Therefore, you most likely won’t be the one looking for the clients, as that is what the company you’re working for does.
However, if you ever get put in charge of finding clients as a freight agent when working for a broker business, you can follow some of these tips:
- Look at clients down the supply chain
- Make cold calls to potential clients
- Reach out to connections of your current clients
- Offer a rewards program for recurring clients
- Offer to be back up to those who already have a freight broker
- Provide free audits before getting started
Maximize your success with SPI Logistics
As a freight agent, you need all the help you can get to put yourself ahead. SPI Logistics is here to maximize the success of both you and your freight brokerage by offering the best services in the industry.
No matter the assistance you need, we can provide it, whether it’s advanced operational support, better payment systems, or stronger tracking tools. All you have to do is get in touch with one of our experts, and we can put you in the best possible position in the industry.
Conclusion
Freight agents are the bread and butter of the supply chain, as they help ensure everything runs smoothly. Due to this, you need a lot of knowledge and expertise to become a successful one. Luckily, you don’t need a three-year degree to get into the industry, but there are various ways you need to learn and gain experience.
By following the advice and information provided in this guide, you can successfully become an independent freight agent.
FAQs
Do I need a license as a freight agent?
No, you don’t need a license to work as a freight agent. However, you cannot do the tasks your job requires without one. That’s why you need to work under a freight brokerage firm with a valid license, as well as insurance, to ensure you follow all the legal and regulatory requirements.
Can freight agents work for themselves?
Yes, freight agents can work for themselves as freelancers, however they always need to work with a freight broker. You don’t have to be on a permanent contract with one of these companies, but you do need to have one helping you as they have all the clients, licenses, and insurance.
What common problems do freight agents come across?
There are a few issues that freight agents typically come across, with the main being the following:
- It’s a competitive sector
- Increases in fuel prices
- Keeping up with tech advancements
- External factors that cause delays
- Managing cash flow due to late payments
Can I use software to help my freight agent services?
Yes! You can definitely use software to help with your job, and it is strongly encouraged. There is a wide range of different operational logistics software on the market that has been designed to help freight agents. Whether you need a helping hand with keeping track of clients and their payments or you want an improved tracking system for shipments, you can always find something to help. Luckily, SPI Logistics can assist with most of this as well.
