A freight broker salary is a critical detail when negotiating a new form of employment. While many people move past that detail then, salaries are also important to keep in mind when continuing in a profession. Professionals who know what competitive salaries for their career choice are can use the information to ensure they are earning what they are rightly valued as, and a guideline to know if their current business model is successful. 

Verified Market Research writes that the “US Freight Brokerage Market size was valued at $1.164 Billion in 2020 and is projected to reach $13.78 Billion by 2028,” with a compound annual growth rate of 36.2% in the next seven years. Prospective and active brokers who look at these statistics can see that this industry has plenty of room to grow. So, where does one begin when thinking about how much can be earned per year?

Thanks to today’s technology, there is an easy answer to that question. Indeed notes that in 2021, “The national average salary for a freight broker in the United States is $62,105 per year, with an average additional compensation of $28,000 per year for commissions.” These numbers are based on individual brokers, as opposed to broker companies. With the rapid growth of logistics technology considered in the industry growth rate statistic, these numbers are expected to grow.

With the entire nation as a poll, active and prospective brokers should consider many factors  when negotiating their salary or commissions. There are nuanced differences between a licensed broker and a freight agent or W-2. Freight broker companies hiring may require experience to even get into the field, while some, such as Edge Logistics, don’t. Is the overhead being removed from their pay fair for brokers who are employees? Individual proficiency and expertise also plays a large part in negotiating a freight broker salary. 

Beyond company management, a strategic broker balances spot vs. contract trucking. This includes planning the specific types of freight with which a broker is working. For example, freights that require priority service simply pay better. Priority service can be the time and attention needed for shipping food and beverage in a reefer, making it a more profitable load. Even items in a dry van can need preferential treatment through the delivery process when made of sensitive materials such as glass or combustibles.  

Brokers can also focus on specific trailer types to expand their freight broker salary. Tankers often haul profitable freight due to these materials’ specialized requirements for travel. These loads vary between dry goods, water, alcohol, gas, oil, and even chemicals. Some of these items also qualify under the hazmat qualification, making them additionally profitable because of the special licenses drivers must attain and requirements they must abide by. When the price goes up for the shipper to get its material transported, the profit margin for brokers rises as well. 

The U.S. Bureau of Labor Statistics breaks down the occupational wages of transportation, storage, and distribution managers. Freight brokers are part of this category. If a company has 10 employees, all making the industry manager mean hourly wage of $50.53, this calculates to an annual wage of $105,100. Multiplying that by ten results in $1,051,000 just in salary costs. If the same company is making a gross margin of 15%, then, the total value of freight under management just to pay for the employees comes to over 7 million dollars. 

By utilizing technology, freight brokers can expand their reach to cover more loads without increasing the number of staff working. Doing this means each load is more and more profitable. Therefore, the true freight broker salary depends on the right tools and experience and how they’re used to create more value for the company. The right tools help solve supply chain issues for both shippers and carriers.

Brokerage companies know that to build a thriving business, one must handle the shipper-carrier relationships well. Because brokers are intended to bridge both sides of the industry, the need to do this well is especially apparent in the freight industry that is quite literally always on the go. Experience, communication, and analytics work together to make decisions that pair the right shipper with the right carrier. Brokers who can properly assess freight carrier risk and bring peace of mind to their shippers throughout the whole transportation process. Carriers benefit from a broker when met with a timely payment process and clear communication. To get an edge on your supply chain needs with a brokerage that does it all, contact Edge Logistics today.