Freight Broker
What is freight broker? A freight broker is a licensed intermediary that matches shippers with carriers, taking a margin between what the shipper pays and what the carrier receives.
Full definition
Brokers do not own trucks. They own books of shipper relationships and carrier networks, and earn a margin (typically 10-25%) on every load they tender. They bear no asset risk but bear payment risk: most brokers pay carriers on 30-60 day terms regardless of when the shipper pays them.
Brokers must hold an MC license and a $75K freight broker bond (BMC-84) or trust fund (BMC-85). Carrier credit risk on brokers is real — the trucking industry sees a steady stream of broker insolvencies that strand unpaid invoices.
Factoring companies maintain credit ratings on brokers and refuse to factor invoices on shaky brokers; their lists are useful third-party signals.