A Comprehensive Guide to Becoming an Independent Freight Agent
We’ve been talking to freight agents for years on Everything is Logistics, so we’re creating the industry’s most comprehensive guide to becoming a freight agent using the transcripts of our past interviews.
Freight agents might be the biggest open secret for anyone looking to escape a toxic corporate environment or the commute to work. But it’s also pretty close to the perfect combination of high income potential that’s and low risk.
In this guide, I’m going to break down some of the most common questions about becoming a freight agent and real-world advice from real conversations with other freight agents.
By the time you’re done reading, you’ll know everything you need to decide if being a freight agent is your calling or if you should hold on to that stable freight broker gig.
Note: These conversations are also linked at the bottom in case you want to hear straight from the mouths of successful freight agents. :
Is Becoming a Freight Agent Worth It?
The first question you might be asking is whether becoming a freight agent is worth it. The answer to that question depends on your goals, your risk tolerance, and your desire to own your own business.
Freight agents often enjoy greater independence and higher earning potential than traditional freight brokers . When you become a freight agent, you are essentially starting your own business, but with the backing of an established freight company. The opportunity to be your own boss, set your own hours, and determine your own income can be very attractive.
However, being a freight agent also comes with its own set of challenges. You’ll need to build your own client base, manage your own operations, and navigate the complexities of the freight industry. It’s a role that demands a strong work ethic, excellent communication skills, and a knack for sales and negotiation. But, for those who are willing to put in the effort, the rewards can be considerable.
Differences Between a Freight Broker and a Freight Agent
Before we dive deeper into the world of freight agents, it’s important to understand the differences between a freight broker and a freight agent.
A freight broker is someone who is in the trenches, securing customers, finding carriers , and dispatching cargo. They work for a company and manage a book of business, dealing with the everyday operations of moving freight from point A to point B.
A freight agent, on the other hand, is someone who runs their own independent book of business. They work under a commission model for a company, but they essentially manage their own operations. They’re entrepreneurs in their own right, but they don’t have to worry about some of the risks that come with starting a business from scratch. This is because the company they represent as an agent takes on the financial risks, such as the cost of purchasing a Transportation Management System (TMS) or handling accounts payable and receivable.
How to Become a Freight Agent
Becoming a freight agent requires a blend of industry knowledge, sales skills, and entrepreneurial spirit.
Here are some steps to get you started:
- Gain Experience in the Freight Industry: Most freight agents start their careers as freight broker or in related roles that give them a solid understanding of the industry. This includes knowledge about shipping regulations, logistics technology, and the specifics of different modes of transport.
- Build a Client Base: As an agent, your success will largely depend on your ability to secure and maintain a strong client base. This means honing your sales skills and building relationships within the industry.
- Partner with a Freight Agency: To become a freight agent, you’ll need to partner with a freight agency that offers an agent program. This partnership will provide you with the support and resources you need to run your own business, without the financial risks that come with starting from scratch.
- Understand the Commission Structure: Freight agents work on commission, so it’s important to understand the commission structure of any agency you partner with. This includes understanding how and when you’ll be paid, as well as any fees or costs that may be deducted from your commission.
- Stay Current with Industry Trends: The freight industry is always evolving, so it’s crucial to stay up-to-date with the latest trends and developments. This can help you identify new opportunities and stay competitive in the market..
Independent Freight Agent Salary and Commission Split Expectations
One of the major draws of becoming a freight agent is the potential for increased earnings. As an independent freight agent, your income is typically commission-based. This means that the more business you bring in, the higher your income. It’s important to note that different freight agent programs have different commission splits, so it’s essential to discuss this upfront. Most programs will offer an agent split of 70/30 or 60/40, depending on the quality of your book of business.
Additionally, bear in mind that while the potential for higher earnings is appealing, it’s also a performance-based role. Your earnings will directly reflect your ability to bring in and manage business. You’ll need to be proactive in building and maintaining your client base, and be prepared for fluctuations in income, especially when starting.
Questions to Ask Your Potential Freight Agent Program Partner
When considering a potential freight agent partnership, it’s crucial to ask the right questions. For instance, Warren Debiak, an SPI freight agent, emphasized the importance of understanding the support the company will offer and any potential liabilities. Here are some questions you might consider:
- What type of back-office support does the company provide?
- How robust is their technology and TMS system?
- How does the commission structure work?
- What kind of insurance and bonding does the company offer?
- What is their carrier network like?
- Do they offer any additional resources or benefits, such as training or lead generation?
Best Freight Agent Programs
Searching for the best freight agent program is a little annoying because most companies with a freight agent program, also have an in-house freight brokerage. Therefore, you’ll typically end up on websites that include companies whose primary business model is more brokerage and less freight-agent support.
To combat this, we’ve compiled a handful of companies with a strong or completely focused freight-agent-only model (meaning the program has no in-house brokers or assets allotted to company customers). Typically if the company is focused mostly on its freight agent partnerships, there’s a great sense of trust and focus on the agents themselves.
- D&L Transport offers a 70% commission on every load, an option to earn up to 75% commission through a year-end bonus program, free access to load boards and TMS, and a top 1% credit rating that ensures agents are not responsible for bad debt. The considerations include not being a top 50 freight brokerage, which may mean a lack of buying power.
- Logistics Dynamics, Inc (LDI) is known for its trust and teamwork. They offer a 50-70% commission split, a relatively small agent base, and low customer saturation. However, they have fees and charges associated with load boards, and there are load and profit margin minimums for agents.
- Armstrong Transport Group offers up to 75% commission splits, new agent bonuses up to $100,000, and proprietary TMS with direct integrations to DAT and Truckstop load boards. The main consideration is that it’s a non-asset-based company, which may be an issue for some customers/shippers; or a pro in some folks minds because you don’t have to worry about the cost of equipment/maintenance affecting overall company revenue and thus, cashflow.)
- SPI Logistics has a focus on supporting its community of agents and their customers, promising to make their work easy. They provide great commissions and first-class, personal support. They offer advanced operational support, better payment systems, enhanced access to credit, and stronger dispatch and tracking tools.
- Disclosure: Blythe and the Everything is Logistics podcast have proudly partnered with SPI Logistics to help promote their freight agent program and the company is our podcast’s title sponsor. SPI’s agents (interviews linked below) tell their own personal stories and (obviously) helped to shape this guide on Digital Dispatch.
- Landstar is a multi-billion dollar, Fortune 500 company that provides freight agents with tools and support. It offers unparalleled capacity across North America and beyond, and freight agents receive highly experienced back office support and the security of working with a well-known brand.
- Trinity Logistics offers a freight agent program that provides individuals with the tools, support, and resources to thrive in the logistics industry. With access to a vast network of carriers and customers, comprehensive training, advanced technology, and ongoing support, agents can offer competitive rates and reliable transportation solutions.
In Closing
To wrap things up, becoming a freight agent is all about embracing the American Dream. It’s about independence, entrepreneurship, and forging your own path. If you’re experienced in freight sales, already a freight agent looking to make a switch, or a freight broker with a book of business, becoming a freight agent could be the next big step in your career. Remember, the journey doesn’t end here. Be sure to listen to more interviews and hear directly from SPI’s freight agents about their experiences and successes.
I hope this guide provides valuable insight and direction as you navigate your journey towards becoming a freight agent. The road might be challenging, but with determination, knowledge, and the right resources, you’re well on your way to a rewarding career.
