Freight transportation is thriving. Not only is it continuing to grow as the demands for efficient movement of freight grows, it is also an essential part of the American economy. And one of the most exciting and rapidly growing jobs within the industry is the role of Independent Freight Agent.
With perks like low overhead, freedom to be your own boss, unlimited earning potential, and flexibility to work from anywhere with internet and phone access, becoming an Independent Freight Agent is a lucrative profession for the motivated entrepreneur.
At Kopf we’re often asked how to get started so we put together this guide to explain how to become an Independent Freight Agent step-by-step.
What Is an Independent Freight Agent?
First things first, before looking at the steps to get started, we must be clear on the role of an Independent Freight Agent.
Independent Freight Agents are independent contractors who work as intermediaries between Shippers (who have the freight to be shipped) and Carriers (who do the actual transporting of freight) to arrange logistics services.
As business owners, Independent Freight Agents have their own customers and work on commission from their own office under the authority of a licensed Freight Broker.
This is why they are called Independent Freight Agents. In contrast, a Freight Agent is an employee of a Freight Broker (read more about the differences here).
What Does an Independent Freight Agent Actually Do?
In the simplest of terms, the two main responsibilities of an Independent Freight Agent are sales and logistics management.
Lead Generation and Sales
First, Agents need customers who have freight that needs to be shipped. They must be skilled at generating and securing leads (Shippers) through a variety of methods such as cold calling, email marketing, mastering the sales pitch, and negotiation.
Logistics Management and Customer Service
The second main part of the role is managing logistics on behalf of clients. Technology called Transportation Management System, or TMS, helps Agents monitor loads from pickup to delivery. Agents must be skilled in communication and building relationships with Shippers and Carriers to consistently provide excellent customer service.
Startup Costs to Become an Independent Freight Agent
Since Independent Freight Agents work under the operating authority of a Freight Broker, they are not responsible for the surety bond ($75,000 + $300 application fee), licensing fees, insurance, compliance systems, etc.
In addition to unlimited earning potential and the flexibility of being your own boss, an additional advantage to this career is it does not require considerable capital to get started.
Typical startup expenses:
- Computer and office equipment
- Phone/communication tools
- Internet
- Basic marketing tools like email and a customer management system
- Training (optional, but recommended)
Depending on the specifics you choose, you can realistically expect to spend $500 to $3,000.
Income Potential for Independent Freight Agents
This is where things get exciting!
Independent Freight Agents are independent contractors, not employees. They are paid by commission from the brokerage in what is called a commission split (which we explain in more detail here). When booking a load, an Agent negotiates a rate with the Shipper and a rate with the Carrier. The difference between those two rates is the profit. That profit is then split between the brokerage and the Agent. This is commonly 50/50, 60/40, or 70/30.
So, if you can build your book of business and maintain a strong track record of delivering results, the long-term income potential is unlimited!
And, if you specialize in a certain niche, like liquid bulk or refrigerated freight, your earning potential increases even more.
Bottom line: You choose your success.
Step-by-Step: How to Become an Independent Freight Agent
So, let’s get to the nitty-gritty of how to get started.
Step 1: Decide if the Independent Agent Model Fits You
The role of an Agent is not easy but it is financially rewarding. To be successful, you must have an entrepreneurial mindset, excellent time management skills, be comfortable with commission-based income, and have excellent relationship building skills.
Ask yourself these questions:
- Do I want to work in the logistics industry?
- Do I want to manage my own business?
- Am I self-motivated?
- Do I enjoy sales? (Or am I willing to learn?)
- Am I a good communicator?
- Do I get energized by relationship building and networking?
- Do I prefer commission-based income?
If you answered yes, then you’re ready to move to step 2!
Step 2: Understand the Industry
Being comfortable with the Agent model is the first step, but now you must grow in your logistics knowledge. Independent Freight Agents must understand how logistics works, types of freight, the different markets, lanes, load boards, and so forth. They must also understand how the sales process works.
There are two ways to gain this knowledge: from previous jobs and through training classes. Relevant job experience includes former logistics professionals, such as truck dispatchers, and former sales professionals, since sales is a key part of success in this career.
If you do not have relevant experience in both logistics and sales, we highly recommend these training classes and books to kickstart your career. There is not required certification to become an Independent Freight Agent, but understanding the industry and being confident in sales is an absolute must.
Now you’re ready for step 3.
Step 3: Set Up Your Business
Once you’ve gained industry knowledge, it’s time to establish your business. Choosing your business structure is the first step in starting your freight agency. There are several options and best determined by consulting with an attorney or accountant to determine which best suits your needs.
You’ll also need basic office essentials such as a phone, computer, internet, and any other communication tools helpful in conducting business. A freight brokerage should supply you with their TMS which automates the freight tendering process.
Onto the next step.
Step 4: Find a Licensed Freight Brokerage
Since a brokerage carries the operating authority, you as the Independent Freight Agent must operate under the brokerage’s authority. A Freight Broker is in compliance with laws and regulations freeing the Agent to do the actual work of finding customers and managing loads.
It is important to find a brokerage that has strong financial backing, business office support when you need it, a commission split that supports your bottom line, and short turnaround on payouts.
As you search for brokerages, most often you’ll see a book of business is required. If you are a beginner and do not have customers, we highly suggest you consider taking a training course. Even with a small book of business, if you are motivated and willing to work, the right brokerage will consider giving you a chance. Don’t give up!
Step 5: Get Customers
Now that your business is set up and you’ve chosen a brokerage to contract with, it’s time to build your book of business, or customers for which you move freight. This is where having strong sales skills and mindset comes into play.
It isn’t easy, but it is a muscle you can build over time. Prospect, do cold outreach, leverage industry relationships, ask for referrals, network, and so forth. It must be part of your daily schedule. But also keep in mind, you must deliver on promises for the customers you do have.
Step 6: Grow your Business
After you have customers and become more skilled at the job, you’re on your way to a financially rewarding career. As you gain experience, you’ll diversify your book of business so you aren’t relying on one or two customers, seek accountability and support, and learn how to overcome common challenges.
Kopf is a Brokerage Built for Agents
Being an Independent Freight Agent comes with many advantages including low startup costs, flexibility, and unlimited income potential. To get started you must have industry knowledge and be skilled in sales because the day-to-day tasks include both logistics management and sales. You must also find a trusted brokerage so you can operate under their authority.
That’s where Kopf comes in!
Kopf is a family-owned business backed by strong financial stability for over 40 years. Our Agents are known by name, not numbers, and benefit from 24/7 business office support whenever they need it and a 70/30 commission split. We equip our Agents with the tools, resources, and support they need to grow, including:
- Business office billing and invoicing
- Credit checks
- Carrier compliance
- Claims handling
- Transportation management system (TMS)
- Load tracking tools
- Rate tools
- Legal compliance
You manage your business. Kopf powers the infrastructure.
Read this next: 10 Tips to Become a Successful Freight Agent