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Freight Forwarder vs Broker vs Dispatcher: What is the Difference?

Freight forwarders connect the company that ships the goods and the location where they will be used as a final destination. Although freight forwarders don’t execute the shipments themselves, they offer different transit options, including air freight shipment, road freight rail freight, and sea freight.

Through the forwarding of goods through the legal requirements in each location, freight forwarders clear the movement of freight from one country to another. They normally use their own bills of lading to transport cargo. They also offer services for assembly and consolidation.

  • Forwarders leverage volume to reduce cost
  • Access to global partners
  • Accurate documentation
  • Technology: Cargo tracking
  • Compliance
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  • Shippers depend on the help of their forwarders
  • Price gouging may happen while using poor forwarders

What is a Freight Broker?

A broker is an individual or firm that serves as a middleman between a securities exchange and an investor. A company serving as a customer’s agent and receiving payment from the customer in form of a commission is known as a broker. In a nutshell, the function of a broker is to connect buyers and sellers; the broker acts as a neutral intermediary between the both.

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A broker is a person who has the legal right to run their own real estate business. Note that licensed brokers must employ a real estate agent; they are not allowed to work alone.

  • Expertise
  • Financial security assessment
  • Single access point to the capacity
  • Claims management
  • Relationship with the market
  • Contract certainty
  • Risk submission
  • A broker’s interests may not align with your own
  • A broker may not source the best deal for you
  • A broker’s license costs time, money, and effort
  • Brokers often do not guarantee estimates

What is a Dispatcher?

A dispatcher is a professional who coordinates with customers, provides accurate logistics for drivers to follow their routes, and also coordinates delivery times to make sure everything goes properly. Dispatchers are the drivers’ point of contact, and they have all the data required to complete deliveries.

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For instance, when it comes to the transportation and logistics industry, the dispatcher organizes activities with truck drivers and stakeholders on the product’s delivery. The dispatcher also uses a transport management system to optimize the fleet and track the transit of commodities, and also receives/sends information about the delivery of products.

There are different types of dispatchers, they include are emergency dispatchers, transportation and service dispatchers, airline or flight dispatchers, and railroad dispatchers.

  • Dispatchers keep drivers active
  • Dispatchers take care of customers
  • Dispatchers help companies stay on top of government regulations
  • Good dispatchers keep drivers happy
  • The costs and service quality may not be what you bargained for.
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The Difference Between a Freight Forwarder and a Freight Broker

The major difference is that a freight forwarder takes control of the cargo and uses its own resources to offer storage, handling, packaging, consolidation, and paperwork. A freight forwarder organizes transportation through independent carriers. Whereas, a freight broker only coordinates domestic freight transportation.

The Difference Between a Freight Forwarder and a Dispatcher

The difference between a freight forwarder and a dispatcher is that, while dispatchers work for the carrier, a freight broker links shippers and carriers. The freight brokers must have insurance and a license to operate, but dispatchers don’t operate with insurance and a license.

A dispatcher oversees the internal operations of a trucking company by allocating routes to drivers, keeping track of their performance, and making sure that the trucks are kept in good working order.

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While the responsibilities of a freight forwarder are more concerned with the logistics of moving freight than with the regular activities of conveying it. Freight forwarders make arrangements for interstate or international transportation and order supplies. Dispatchers work in a different setting than freight forwarders.

The Difference Between a Freight Agent and a Dispatcher

Freight brokers and agents are frequently mixed up or muddled together. Licensure and liability are the main differences. A freight broker is legally responsible for the shipment and is regulated by the Federal Motor Carrier Safety Administration (FMCSA). While a freight agent is not authorized or accountable.

The Income Comparison of Freight Forwarder vs Freight Broker vs Dispatcher

The average Freight Forwarder salary is $54,376 as of September 26, 2022, while a freight broker makes, on average, $62,105 per year basic salary, with an additional $28,000 in commissions, and depending on the dispatcher’s expertise and region, the salary can vary. Depending on their level of experience, dispatchers can make between $26,560 and $67,680 annually.