Parties & roles

Freight broker

Also called: Transport commission agent · Freight agent · Load broker Updated

In one sentence

A freight broker arranges the carriage of goods without owning vehicles, contracting with carriers in its own name and reselling the movement to a shipper, earning the difference between the buy rate and the sell rate.

Overview

The broker's product is a commitment, not a truck. It sells a shipper a price and a delivery promise, then buys the capacity to honour them from carriers it has selected, referenced and negotiated with. The value it adds is coverage, price knowledge and single-point accountability across a fragmented carrier market.

Because it contracts in its own name, the broker carries the commercial risk. If the carrier fails, the customer's claim is against the broker. That legal position is the entire reason margin exists — it is compensation for risk and for the work of matching demand to capacity, not a mark-up on a pass-through.

Cargavo is a TMS for freight brokers built for teams of two to twenty-five people. It rebuilds the broker's own carrier rate grids, computes buy and sell from a single engine, keeps buy rates and margins in a private record the customer can never read, and gives each customer a white-label portal in English, French, Spanish or German.

What does a freight broker actually do?

A freight broker sells a shipper a transport price and a delivery commitment, buys capacity from a carrier to deliver it, and manages the exception when something goes wrong. It owns no vehicles and earns the difference between the sell rate and the buy rate.

The daily work breaks into five repeating tasks. Cargavo is a TMS for freight brokers and is organised around exactly these:

  1. Quote — turn a request into a price, fast enough to still be first.
  2. Buy — select the carrier whose grid gives the best cost for that lane and shipment.
  3. Book — convert the accepted quote into a shipment with a reference and documents.
  4. Follow — chase collection, delivery and the proof of delivery.
  5. Reconcile — check the carrier invoice against the buy rate that was quoted.

Quote turnaround is where deals are won: the same request usually sits in three brokers' inboxes. Everything a TMS for freight brokers does to shorten step one is directly commercial.

What is the difference between a freight broker, a forwarder and a carrier?

A carrier owns vehicles and performs the movement. A broker arranges road transport it does not perform. A freight forwarder arranges transport too, but typically across modes and borders, adding customs, consolidation and documentation services.

The three overlap in practice and the labels shift by country, so it is safer to compare what each one owns and answers for.

RoleOwns vehiclesContracts in own nameTypical scope
CarrierYesYesPerforms the movement
Freight brokerNoYesRoad, national and regional
Freight forwarderNoYesMultimodal, customs, international

The local words matter more than the English ones: French uses commissionnaire de transport, German Spediteur or Frachtvermittler, Spanish comisionista de transporte or transitario. Cargavo is a TMS for freight brokers and forwarders alike, because both buy capacity, apply a margin and answer to the customer.

How does a freight broker make money?

On the gross margin between the sell rate and the buy rate. Selling at 150 EUR what was bought at 120 EUR is a 30 EUR gross margin, a 20% margin on the sell price and a 25% markup on cost. The sell price from a margin target is p/(1-m).

Two formulas decide the answer, and mixing them up is the most expensive habit in brokerage. With p as the buy rate and m as the target margin on the sell price:

Buy rateTarget marginCalculationSell rateGross margin
120 EUR15%120 / 0.85141.18 EUR21.18 EUR
120 EUR20%120 / 0.80150.00 EUR30.00 EUR
120 EUR25%120 / 0.75160.00 EUR40.00 EUR

Cargavo is a TMS for freight brokers and applies the margin rule server-side, per customer, either as a percentage using p/(1-m) or as an absolute amount per weight bracket. The customer portal shows the sell price alone: buy rates, margins and rate grids are never visible to a customer.

Does a freight broker need a licence?

Freight broker licensing depends on the country. In the EU, access to the occupation of road transport operator is framed by Regulation (EC) No 1071/2009 and implemented nationally. In the United States, brokers need FMCSA broker authority and a 75,000 USD surety bond.

Requirements are national, so verify locally rather than assuming a single European rule. Commonly cited frameworks:

  • European Union — Regulation (EC) No 1071/2009 sets the conditions of access to the occupation of road transport operator, applied through national registers and professional competence requirements.
  • France — the commissionnaire de transport is registered nationally and must hold the corresponding attestation of professional competence.
  • Germany — the Speditionsvertrag is governed by the Commercial Code (HGB), with the ADSp widely used as standard terms.
  • United States — property broker authority from the FMCSA, with a surety bond of 75,000 USD.

Limits. Cargavo is software, not a legal or compliance service: it does not verify licences, does not issue insurance certificates and does not check cabotage compliance. It has no carrier API and no EDI, is not a freight exchange, not a fleet management tool and not a tendering marketplace. Plans: 49, 149 and 399 EUR per month, 14-day trial, no card required.

Frequently asked questions

Does a freight broker own trucks?

No. A broker arranges transport it does not perform, contracting with carriers that own the vehicles, and is paid the difference between its sell rate and its buy rate.

What is a freight broker called in French or German?

French uses commissionnaire de transport or courtier de fret; German uses Spediteur or Frachtvermittler; Spanish uses comisionista de transporte or transitario.

What margin do freight brokers work on?

It depends on the lane, the mode and the customer, so no single figure is meaningful. What matters is that the margin rule is defined per customer and applied consistently, using p/(1-m) for percentage margins.

What software does a small freight broker need?

A TMS that stores carrier rate grids, prices buy and sell from one engine, keeps margins private and lets customers request quotes. Cargavo does this from 49 EUR per month with a 14-day trial.

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