High pay. Growing demand. Stable industry. It’s a good time to be a freight broker. Here’s what the industry looks like today.
If you’re considering becoming a freight broker — or wondering if you’ve made the right choice — we’ve got good news for you. Despite recent setbacks, the industry is currently doing quite well. In this blog, we’ll look at the benefits of being a freight broker, the state of the industry, and the reasons why we’ve arrived where we are today.
Low Supply. Growing Demand.
Just a couple of years ago, a great number of freight brokers were forced to go out of business, creating a gap in supply. Why? In 2013, the Federal Motor Carrier Safety Administration (FMCA) increased the bond requirement for freight brokers from $10,000 to $75,000. Many brokers simply couldn’t afford it.
Originally put in place in the 1930s, the freight broker bond requirement was designed to protect shippers who do business with brokers. The bond guarantees that freight brokers will pay carriers, and will not use unethical business practices. The required amount had remained at $10,000 since the 1970s — so the large increase was a shock for many brokers. Bond price is dependent on a broker’s credit score, so those with credit problems and a lack of financial resources were pushed out of the industry. This caused a drop in supply, and a growing demand for the brokers who remained.
Improved Credibility. Reliable Stability.
New bond requirements mean the freight brokers who are still in business have better credit scores, and more stable operations. They also have a lot less competition. This has led to improved job security for brokers, and better security for shippers. As a result, the industry is enjoying a more stable and trustworthy reputation.
Better Credit Means Lower Bond Costs.
Because today’s operating brokers have higher credits cores and stronger financial resources, bond prices are beginning to go down. This makes it less expensive for new brokers to enter the business.
High Salaries. Strong Future.
Freight brokering is a lucrative industry, with U.S. salaries typically ranging from $30,000 to $80,000. New brokers will start out making less, but experienced brokers can make upwards of $90,000. This salary range puts brokers well above the national median income of $32,140 or even the average household income of $53,657. High salaries continue to attract new brokers to the field.
Growing Industry. Bright Future.
The freight brokerage industry has grown 15% since the beginning of 2014, but the market still needs more brokers. Freight brokers play an important role in helping shippers and carriers. Now that we’re seeing better credit, higher salaries and less competition, brokers may experience even greater success in the future.
For freight brokers to be successful, they need excellent credit and strong financial resources. Triumph Business Capital can help. Our Invoice Factoring services help brokers collect payment for completed work, so they can pay truckers faster. This results in better credit, easy access to capital, and improved collections processes.