Can You Be A Carrier And A Freight Broker?

April 7, 2025

Can You Be A Carrier And A Freight Broker?

While it is technically possible for a company or individual to operate as both a freight broker and freight carrier, this dual role comes with increased complexities and potential challenges. For this reason, the FMCSA rarely grants both motor carrier authority and brokerage authority to a single operator.

In this article, we’ll break down the key differences between carriers and freight brokers, including the responsibilities, earning potential, and startup costs for each role. Whether you’re a seasoned logistics professional or new to the field, we’ll help you navigate the complexities to ensure you make a strategic decision for your career.

What Is A Freight Broker?

A freight broker is a transportation intermediary between shippers and carriers. Brokers do not own trucks or handle shipments directly. Instead, they connect shippers with an authorized motor carrier to facilitate smooth freight movement.

In this industry, success hinges on strong networking skills, market knowledge, and the ability to match loads efficiently to the right carriers.

Here’s a closer look at the key roles and responsibilities of a freight broker:

Finding shippers

Freight brokers secure business by reaching out to companies that need freight transportation. This involves:

Cold calling and networking.
Building long-term relationships with potential shippers.
Understanding the specific shipping needs of different industries.
Presenting solutions that optimize shipping efficiency and cost.

Negotiating freight rates

Brokers must find rates that are competitive while ensuring profitability. This requires:

Market research to understand fluctuating freight rates.
Negotiating contracts with shippers and carriers for the best possible deals.
Balancing cost savings for shippers with fair compensation for carriers.
Factoring in fuel costs, demand, and seasonal changes that affect pricing.

Coordinating shipments

Once a shipment is booked, brokers manage the process from pickup to delivery by:

Matching freight with the most suitable carriers.
Providing real-time tracking and shipment updates to shippers.
Resolving issues such as delays, route changes, or carrier problems.

Managing freight brokerage documentation

Freight brokers handle a significant amount of paperwork, including:

Contracts between shippers and carriers.
Rate confirmations outlining shipment details.
Bills of Lading that serve as receipts and shipping instructions.
Invoices and payment tracking for completed shipments.

Ensuring regulatory compliance

Brokers must follow industry regulations to protect their business and clients. This includes:

Adhering to FMCSA and DOT guidelines.
Maintaining an active broker bond.
Verifying that carriers have proper insurance and authority.
Keeping records of shipments, contracts, and financial transactions.

What Is A Carrier?

A freight carrier is a company or an individual who is legally authorized to physically transport freight from one location to another. For instance, a trucking business that owns and operates trucks. While truck carriers are the most common, carriers may also ship goods by railroad, air, or ocean.

Carriers either own or lease their equipment to provide shipping services. Some negotiate rates and schedule loads on their own, while others partner with freight brokers to secure consistent work.

Carriers with dual authority can also manage broker loads, securing shipments through their brokerage services while handling transportation through their carrier services. However, this presents the risk of prioritizing their own carrier services over finding the best carrier for a shipper.

The main responsibilities of a carrier include:

Transporting goods

Carriers are responsible for the safe and timely transportation of goods:

They must follow the agreed-upon route and timelines to deliver goods securely.
While carriers may not always handle the actual loading or unloading, they are responsible for coordinating these tasks or ensuring they are done correctly.
Ensuring that freight is properly secured during transport to avoid shifting or damage during transit.

Managing fleet operations

Carriers are also responsible for the upkeep and management of their fleet to ensure smooth operations. This includes:

Regular servicing and inspections of vehicles to keep them in good working order.
Adhering to all legal requirements for operating commercial vehicles, such as obtaining the necessary permits, paying tolls, and ensuring all vehicles have the required insurance.
Efficiently managing fleet operations to ensure fuel efficiency and minimize costs. This involves route planning, driver scheduling, and maximizing truck capacity for every haul.

Handling freight loads

Carriers handle freight safely during loading, transport, and unloading. This involves:

Verifying that the load complies with all relevant weight limits and specifications.
Ensuring that the freight is protected from potential damage, whether it’s perishable goods, fragile items, or hazardous materials.

Meeting regulatory standards

To ensure safety and legal compliance, carriers must adhere to several industry regulations:

Adhering to safety laws, such as those set by the FMCSA. This can include driver hours-of-service limits, vehicle inspection regulations, and specific load restrictions.
Maintaining the appropriate insurance coverage for the cargo being transported, such as cargo insurance and liability insurance.
Ensuring their drivers are qualified to operate commercial vehicles, including having the proper CDL (Commercial Driver’s License).
Carriers must obtain a USDOT number and a Motor Carrier (MC) number to operate legally.

Maintaining communication with brokers and shippers

Effective communication with brokers and shippers is crucial for a carrier’s role. This includes:

Carriers should keep brokers and shippers informed about the status of their shipments, including any delays or issues encountered during transit.
If a problem arises, carriers must promptly inform the relevant stakeholders and work toward finding a solution, whether that means rerouting, arranging for repairs, or updating the delivery schedule.

Key Differences Between Freight Brokers And Carriers

Feature	Freight Broker	Carrier
Ownership	No trucks or direct handling of freight	Owns and operates transportation assets
Main Role	The middleman between shippers and freight carriers	Physically moves the freight
Liability	No liability for cargo loss/damage	Responsible for cargo while in transit
Earnings	Earns through commissions on shipments	Earns by charging for their transportation services
Startup Costs	Low to moderate	High (trucks, fuel, insurance, maintenance)
Financial Security	Lower risk; doesn’t deal with direct operating authority	Higher risk; handles fuel costs and truck maintenance
Regulatory Compliance	Needs broker authority	Needs carrier authority

Earnings Potential: Freight Broker Vs. Carrier

When considering a career in the freight industry, understanding the earning potential of both freight brokers and carriers is essential.

Freight broker salaries

According to the U.S. Bureau of Labor Statistics, the average freight broker earns $52,460 per year. However, successful brokers within the 90th earning percentile can earn around $72,820 annually.

Brokers work on commission-based models, making up to 5-25% per shipment.

Factors that impact earnings:

Number of shipments booked
Size and quality of your carrier network
How well you negotiate rates with shippers and carriers

Carrier salaries

Trucking companies generally earn higher revenue per load, but they also have higher operating costs, such as trucks, fuel, maintenance, and driver wages.

Average carrier earnings:

Company truck drivers: $45,000 – $70,000
Truck owner operators: $100,000 – $200,000

Factors that impact earnings:

Fuel costs and route efficiency
Load rates and demand
Vehicle maintenance expenses

Startup Costs: Freight Broker Vs. Carrier

Freight broker	Carrier
Broker license (FMCSA): $300Surety bond: $75,000 (can be financed for ~$1,500/year)Software (TMS, load boards): $50 – $300/monthOffice setup & marketing: ~$2,000 – $5,000	Truck purchase/lease: $50,000 – $150,000+Insurance: $8,000 – $12,000/year per truckDOT & MC authority: ~$600Fuel & maintenance: Ongoing high expenses
Total estimated start-up cost: $3,000 – $5,000	Total estimated start-up cost: $50,000 – $200,000

FAQs

1. What is double brokering?

Double brokering occurs when a broker, who has been contracted to arrange a shipment, illegally passes that shipment on to another broker without the shipper’s knowledge or consent. It is an illegal practice that often violates contractual agreements and FMCSA regulations.

2. What is co-brokering freight?

Co-brokering involves a collaborative agreement between two or more freight brokers. It is a legitimate and transparent practice where all parties involved, including the shipper, are aware of and agree to the participation of multiple brokers.

3. What does it mean to hold “dual authority”?

In the context of the freight industry, “dual authority” refers to a company that holds operating authority from the Federal Motor Carrier Safety Administration (FMCSA) to function as both a broker ( authorized to arrange transportation of goods by connecting shippers with carriers) and a carrier (authorized to physically transport goods).

This can provide flexibility but also introduces potential conflicts of interest and increased operational complexity.

Final Thoughts

Ultimately, the decision to operate as a freight broker, a carrier, or both requires careful consideration of your business goals, resources, and risk tolerance.

While dual authority offers flexibility, it does pose additional complexities and potential conflicts of interest.

If you’re drawn to the flexibility, low risk, and high-earning potential of the freight brokering industry, our 90 Day Freight Broker course is for you. Our comprehensive course covers 13 in-depth modules, from the basics right up to industry-insider information, to help you successfully launch your own freight brokerage.

Resources: