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How a Freight Broker is Different than a Freight Forwarder?

The terms freight forwarder and freight broker are sometimes used interchangeably, but their jobs are actually quite different. They perform some of the same functions, but a broker acts as an intermediary between the carrier and the shipper, while a forwarder’s job is to facilitate the shipping process.

Who are Freight Brokers?

Either a company or an individual may be a freight broker. The broker is a liaison between a company or individual that has items that need to be shipped and a motor carrier that it authorized by the Federal Motor Carrier Safety Administration to haul freight. The broker’s job is to determine the needs of the shipper and connect them with a carrier that has agreed to ship the items at an agreed upon price.
A freight broker must have a license from the Federal Motor Carrier Safety Administration to operate legally. Many states require brokers to carry surety bonds and brokers are also expected to carry adequate insurance to protect their customers and business clients from loss.
Freight Brokers provide a valuable service to both motor carriers and shippers. They connect shippers with reliable carriers that they may not come across on their own. They also assist carriers in finding loads to move so they make money. Brokers are usually paid on commission.

Using technological resources and knowledge of the shipping industry, freight brokers help both carriers and shippers meet their business goals. Some companies find the services of a broker so invaluable that they hire a broker to coordinate all of their company’s shipping needs.

Many new freight brokers work for a carrier or shipper to gain industry knowledge and experience. They also gain business contacts that help propel them forward in their new career. Some new brokers take a training course to learn the business, but they often find that the course doesn’t give them the experience they need to be successful.

New freight brokers are usually more successful if they begin their career an agent for an established broker and learn the business firsthand. These agents act as representatives of the broker. They are usually assigned to a certain geographical area and generally work from home using their telephone, fax machine and computer.

Who are Freight Forwarders?

A freight forwarder is an individual who facilitates the process of shipping non-perishable or perishable items for a third party. The freight forwarder may handle everything from small shipments of personal goods for individuals to shipping containers for large industrial firms. A freight forwarder may arrange for the shipment of goods internationally, domestically or both. Some
freight forwarders work as independent contractors, while others work for shipping companies.
There are several reasons that a company or individual may use the services of a freight forwarder instead of taking care of the shipping process personally. The biggest reason that people hire a forwarder is that they usually have contacts in the shipping industry and may have the ability to negotiate a lower rate for shipping services. They may also be aware of shipping options that aren’t available to the public, such as vessels that have enough room available to ship certain items at a reduced rate.
When they are initially contacted regarding items to be shipped, the freight forwarder starts by gathering information about the shipment. One of the most important things the shipper needs to know is whether the merchandise is perishable and whether the merchandise will have to cross international borders. The weight and size of the shipment are also considered, as well as when the shipper expects the items to reach their destination.
After they have gathered the necessary information, the freight forwarder looks at all of the shipping options available for that merchandise. Shipping options may include truck transportation, water, air or rail. The forwarder tries to keep goods that are going to the same geographical area together because shippers often pay less when their items are shipped on the same vehicle as other items.
Exceptional record keeping skills are required to be a successful forwarder. They must track rates, shipping information, damaged goods incidences and other information on many companies. The forwarder must also prepare legal papers and customs documents if the shipments require their use.
Being a freight forwarder doesn’t require a college degree, but excellent analytical and negotiating skills are necessary. A freight forwarder’s success is dependent on having repeat customers, so integrity and customer service are a big part of the job.

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How Trucking Companies play a role in hauling freight?

The trucking industry is made up of individual trucking companies who are contracted to haul freight from one place to another. These companies may also be called carriers. Sometimes they haul raw materials to factories or manufacturing plants where they can be manufactured into goods to be sold, other times they haul goods from manufacturing plants or storage facilities to stores to be sold. Almost everything that is bought and sold has been transported on a truck at some point. Even goods that are shipped across the oceans in containers are generally hauled to and from the ports on trucks.

Freight Hauling Contracts

Large trucking companies may have a contract to haul goods from one point to another for specific manufacturers, while small companies often contract loads through a freight forwarder. A freight forwarding service generally receives large orders from specific manufacturers. They contract with carriers to facilitate the loads being moved from one place to another. Sometimes trucking companies are also forwarders, but they are usually a separate company that acts as an intermediary between producers or manufacturers and truckers. A freight forwarder may also work with railroads, airlines and ships to get the goods moved as quickly and cheaply as possible.

Each company either has several manufacturing companies that they haul freight for or contracts with freight forwarding companies that they can call and get loads from. The company’s dispatcher usually calls the forwarding company as soon as they know the location where their trailers will be empty so that they can pick up another load as close to that location as possible. Fuel expenses can really hurt truckers, so they try to find loads as close to their current location as possible to minimize the number of miles they have to drive the truck without a load. Many truck drivers are not paid for miles that they drive the truck when it is not loaded.

Types of Cargo

Almost everything you can buy has been hauled in a truck, from the gas at the station to clothes, groceries, cars, electronics, building materials and more. Most of the things you buy have been hauled several times. Many items are only manufactured at a few select places in the country, so they are hauled in trucks to other parts of the country and may be shipped by plane or boat to locations throughout the world. There are trucks moving freight up and down the highways and freeways at all times of the day and night so that people can easily find the things they need when they visit each store.

Tanker trucks haul gas to the gas stations, dump trucks haul dirt, rocks and other materials to building sites, semi trucks with lowboy trailers haul the machinery needed for building projects, and box trucks haul goods from manufacturing plants and warehouses to stock store shelves.

Types of Trailers

There are many types of trucks that carry goods. Box trailers, also called van trailers, are one of the most common types of semi trailers. They are used to haul almost anything, from shoes to plants to electronics. Van trailers are great for hauling items from warehouses to stores because they don’t allow items inside to be damaged by the weather. Their biggest drawback is that there are many items that don’t fit into the rigid size restrictions of a van trailer and they are more difficult to load than a flatbed trailer. Van trailers with refrigeration units attached are called reefer trailers. They are used to haul groceries and other items that may melt or spoil if they get too warm.

Curtain vans are a compromise between a flatbed trailer and a box trailer. The front and back of these trailers is usually similar to a box trailer, but the sides are made of movable waterproof curtains. They are easier to load than van trailers and protect the cargo from the elements almost as well. Flatbed trailers are one of the easiest types of trailers to load. You can haul almost anything on a flatbed trailer as long as it is not too big or heavy. Truckers use tarps to cover their flatbed loads if the load may be damaged by rain or snow.