Freight margins are razor-thin. The brokerages surviving it built nearshore teams that actually work.
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Good Morning. In today's newsletter, I'll explore the differences between a freight agent and a freight broker.
P.S. If you're looking for a new role as a freight broker or freight agent, check out our job board at freightjobs.co for the latest industry job postings. You can apply directly on our site for free.
Brokers can utilize customizable working capital solutions from OTR Solutions to bridge the gap between carrier and customer pay dates. Beyond the cash flow advantages, utilizing working capital solutions also drives increased revenue due to Quick Pay adoption – as high as 12% when combined with Epay Manager.
OTR Solutions is a trucking technology and freight factoring company that was founded in 2011. In 2024 OTR acquired Epay Manager, a back-office automation and carrier payments platform which is revolutionizing broker back-offices with its proactive invoicing workflow.
I chose to write about this topic because I believe it could benefit many of you.
I’ve only worked as a freight broker, and until recently, I didn’t realize how many people work as freight agents.
To help you decide which path might be best for your career, I wanted to explore this subject in more detail.
Employment & Control:
Income & Risk:
Resources & Client Ownership:
Next, we’ll cover the main advantages of owning a freight agency, share top agencies, and provide tips on choosing the right path.
We have plenty of new freight broker job listings on our job board: freightjobs.co.
Starting a freight agency is similar to launching your own brokerage but with a few key differences.
You’ll still need to establish a company name, register an LLC, create a website, set up an email, and get a phone number.
However, you don’t need your own MC number—instead, you operate under the MC number of the brokerage you’re partnered with. For example, if you're a Landstar agent, you use Landstar's MC: 166960.
One of the main advantages of owning a freight agency compared to a brokerage is that you don’t have to deal with back-office tasks like managing invoicing, paying carriers, and handling collections.
The brokerage takes care of these administrative and financial responsibilities, freeing you up to focus entirely on growing your business.
Starting a freight brokerage (not agency) is financially challenging.
Shippers often take over 30 days to pay invoices, but you’re required to pay carriers within the same period. On top of that, carriers and factoring companies typically don’t trust new brokerages with no credit history, so oftentimes, you will need to pay a carrier upfront (risky in today's environment).
This creates a cash flow gap where you have to cover costs upfront. Essentially, you’re acting as a financial middleman, which can be stressful and time-consuming, especially when you’re trying to build a new business.
I've started a freight brokerage before and do not recommend it unless you have a large cash pile or a financial partner.
We recently interviewed Tyson Lawrence, who has experienced both sides of the industry.
After his own freight brokerage went bankrupt, he transitioned to becoming a freight agent under GlobalTranz.
He found that being an agent allowed him to focus on sales and growth without the stress of managing back-office tasks.
It allowed me to grow even faster because I didn’t have to deal with back-office. We were just focusing on selling and a little bit of operations...We eventually did $25 million [revenue] at GlobalTranz before we were sold, and I only had five people.
Last month, we interviewed Brian AuBuchon, VP of Logistics at TAB LLC, the brokerage arm of Artur Express with an agency model.
Here are a couple of quotes from our conversation:
A huge benefit of the agent model is that we handle all back-office support. Agents don’t have to worry about the legal side, insurance, or invoicing. They can focus on sales and operations.
“Typically, someone willing to do a 1099 [freight agent] is hungry. They’re business owners, driven. There’s just a different temperament.”
If you want to learn more about the differences, you can listen to our entire interview on Apple Podcasts, Spotify, or YouTube.
The agency model has grown rapidly in recent years and is now especially popular with the weak freight market.
Brokerages that have agency models prefer it because agents handle shipper relationships and only get paid a share of the profit - not a salary.
Recently, we wrote about how Landstar grew through its strong agent network and large base of owner-operators.
Paul-Bernard Jaroslawski
If you visit our job board at freightjobs.co, you'll see plenty of listings for freight agent positions:
Most agencies are almost always willing to onboard a hungry sales rep who wants to be independent and not have a salary (good ones are tough to find).
However, running a freight brokerage with an agency division isn’t easy. There are many options to choose from, so if you decide to become an agent, take the time to thoroughly research the brokerage you plan to partner with.
Adriana Pulley
Matt Dahl, a former freight broker, who now recruits freight agents, writes a lot about the differences between brokers and agents on LinkedIn.
Here is a post he shared yesterday:
Below is a list of some freight agencies that come to mind.
Three of these are actually FreightCaviar sponsors: Armstrong Transport Group, TAB LLC, and Trinity Logistics.
In total, we have done four interviews with freight agents/agencies. Here they are:
Choose based on your comfort level with risk and desire for autonomy.
FREIGHT MEME OF THE DAY
Flatbed rejections hit a record 48.7%, broker numbers stop falling, and diesel jumps 30 cents overnight.
Congress is moving to put driverless 80,000-lb trucks on public roads. Plus: 13,000 California CDLs get cancelled, diesel hits a 32-year record, Florida wants $50K to get your truck back, and more.
Ryan Schreiber breaks down everything about strategy, relationships, mindset, and AI in logistics.
Oil spikes to $120 on Iran news before settling near $106. Plus: another influencer shipment gets stolen, Wyoming can now pull your truck, 24 states sue over tariffs, and more.
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