How Much Money Do Brokers Make

Unlike many salaried jobs in the United States, freight broker income is harder to determine. That's because there are several ways a freight broker can be employed and get paid. The location also has a huge impact on freight broker salary.

Looking online, freight broker incomes range widely from $42,926 (payscale.com) to $93,618 per year (indeed.com). In this article, we'll break down why this is, what freight brokers make in different locations, and whether starting a broker business or becoming a freight broker is right for you.

freight broker salary

How much do freight brokers make per year?

Different types of brokers make different salaries. There are three main types of brokers:

Licensed freight broker:This type of broker has their own authority, owns their own company, and often employees other freight brokers. Becoming a licensed broker requires a significant investment and involves a high level of risk.
W-2 freight brokers: W-2 freight brokers usually work for licensed brokers and receive a base salary plus commission.
1099 Freight Broker:Like W-2, 1099 freight brokers work under a licensed broker but are independent contractors.

W-2 freight brokers are the most common. Freight brokers can work from home in many cases, and ziprecruiter.com says the average salary is $57,729 a year or around $28 an hour. But one of the biggest factors affecting a freight broker salary is location. What state you live and work in will impact how much you make.

Top 10 broker salaries by state:

Kansas $75,686
Arkansas $71,220
Illinois $ 66,448
Utah $65,250
Georgia $63,896
Florida $62,515
Ohio $62,268
Texas $61,921
Iowa $60,744
New Jersey $56,470

* Average freight broker salary listed on indeed.com as of 12/13/20.

Bottom 10 freight broker salaries by state:

West Virginia $37,750
Vermont $38,040
Alaska $39,620
Wisconsin $39,710
Hawaii $ 39,920
North Dakota $41,100
Nevada $41,400
Kentucky $42,390
Delaware $42,790
Maryland $42,820

Because many of these salaries are dependent upon sales commissions, you can potentially earn more regardless of where you live and operate. This list focuses on W-2 freight brokers, but there are other avenues to being a freight broker that also impact your income.

W-2 vs. licensed vs. broker agent salaries

There are other ways to become a freight broker, including a licensed broker or freight agent. W-2 means you work for a licensed broker in a sales and logistics position. You are paid a salary plus commission on your profits.

The licensed broker

This may be the most profitable way to become a freight broker, but it requires a large investment up front. First, you will need to obtain your own motor carrier (MC) authority. You'll also need what is called a surety bond of at least $75,000 plus the insurance that goes along with being a broker.

Other expenses, such as access to transportation management software, freight matching tools (load boards) like Truckstop.com, and a dedicated website. You'll also need marketing materials and a marketing budget, accounting staff and/or software, and either a chunk of liquid cash or the ability to pay factoring fees on invoices.

Like the bond, some costs will depend on your personal credit and must be paid before you start. Licensed brokers have the highest failure rate because of cashflow issues. But if you have the money to invest, you could earn a six-figure salary or more.

Broker agents

Broker agents or 1099 agents are independent contractors hired to handle sales and logistics. Your primary focus is getting freight and moving it. This offers a lot of flexibility because you can work for more than one licensed broker, you find your own customers, and in theory, you can work as many or as few hours as you want.

The most important thing to know about being a broker agent is that there is no base salary. You are paid solely on commission, although top brokers will pay up to 70% commission on a broker's profits. As an independent contractor, you are responsible for paying your own taxes and other expenses related to owning a small business.

Before becoming a broker agent, it's best to have a few years of experience as a W-2 agent, some accounting and business management experience, along with some knowledge about how to market your service. If you're properly prepared, being a broker agent offers a lot of freedom and earning potential.

How does a freight broker salary compare to similar professions?

W-2 freight brokers average nearly the same wages as truck drivers who work as W-2 employees for a company. Similar to other jobs in transportation and logistics, owner-operators with their own authority can make much more. Like licensed brokers and agents, other sales-based positions like business or financial brokers earn more, but their salaries are also based on commissions. Like with most sales careers, you need a real passion for the job to reach the highest income potential.

What is the outlook for freight broker jobs?

Due to increased demand in the logistics industry, the Bureau of Labor and Statistics predicts this career will continue to grow by 9% every year through at least 2024. The rise of e-commerce has made trucking and delivery one of the fastest-growing fields.

Shippers will continue to need trucks to deliver goods. Drivers will continue needing to keep their trucks full and avoid deadhead runs. Reliable brokers bridge the gap between these two things, using load boards and other tools to make sure everything ships on time.

How do you become a freight broker?

To become a licensed freight broker, you will need a combination of both education and experience.

Take a course from a private company that teaches you to become a business broker.
Work with a company for a while to get the on-the-job experience you need to become certified.
Once you've reached a level of five points according to the industry certification standard from a combination of work experience and education, you can apply to become a certified freight broker.
Invest in a computer, an internet connection, a dedicated phone line, and good freight broker software (often provided by your employer).

There are also certain crucial skills you will need to perform your job effectively as a freight broker:

Strong communication
Analytical thinking and problem-solving skills
Collaboration skills
Finding new customers (AKA "lead generation") and maintaining business relationships (AKA "customer retention")
Strong computer skills

How can freight brokers increase their salary?

Because so much of the freight broker salary is based on commissions, there are three primary ways to earn more money:

Get more clients and do more business. This means closing more sales and earning more commission by engaging actively in lead generation and customer retention.
Ask for a raise. Once you've proven you have a good track record, ask for an increase in your base salary or your commission rate based on your performance.
Be more efficient with your time. Use load boards effectively and delegate administrative or back-office tasks to others (especially true if you are a 1099 broker or a licensed broker).

One of the most effective ways is to use load boards to make sure your clients are always hauling full loads and avoiding deadhead runs. This helps you book loads faster, which increases both your freight volume and profits, which means more money coming in.

Use this handy broker weekly planner to help organize your time and be as efficient as possible.

How much does a freight broker make per year? That depends on where you are located, the amount of commission you earn, and how you get paid. As you gain more experience, you will have more choices and more earning potential. Do your research and understand the industry, and you can have a long and lucrative career in this growing field.