Ok. So what is a freight broker? Why do companies use them?
Freight brokers are either an individual or company that operates mainly as a liaison between authorized transportation companies and service providers.
Basically they negotiate the deal between someone who needs products shipped, and the company who will provide the service –in this case the truckers. They usually handle every aspect from times, locations, and pricing, or at list they should be handling it, anyway!
Freight brokers (regardless if they are a business or an individual) must be licensed by the Federal Motor Carrier Safety Administration (FMCSA). They are also expected to secure and maintain appropriate insurance, to cover cost in case of a loss. In many cases they are required to maintain surety bonds, in addition to the insurance.
Source: www.inboundlogistics.com
Their services can be looked at as a way to aid in doing and getting business. They can help shipping companies find carriers and assist the carriers in finding good loads to haul, something that can be difficult for companies on either end. They charge a commission, based off the distance, the overall value, and other related factors.
