What Is the Difference Between Cargo Agents and Freight Brokers?

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freight broker training in Canada
freight broker training in Canada

You’re not alone if you’re wondering what the difference is between cargo agents and freight brokers. Both types of businesses play an important role in the shipping industry but have different functions. 

Cargo agents are responsible for arranging the transportation of goods on behalf of their clients, while freight brokers act as intermediaries between shippers and carriers. 

Before going for any freight broker training in Canada, Here’s a closer look at the two types of businesses:

freight broker training in Canada

Cargo Agents Vs. Freight Brokers

Cargo agents are the ones who work for the companies that own the cargo, while freight brokers are the ones who work for the companies that own the ships. Here are the six main differences between the two:

  1. Licensing

Cargo agents are licensed by the Federal Maritime Commission (FMC) as Ocean Transportation Intermediaries (OTIs). On the other hand, Freight brokers are licensed by the Federal Motor Carrier Safety Administration (FMCSA).

2. Bonding

Cargo agents are required to post a bond with the FMC. The bond guarantees the payment of freight charges if the cargo agent defaults on its obligations. Freight brokers are not required to post a bond.

3. Insurance

Cargo agents are required to maintain insurance coverage for their business. The insurance must include coverage for cargo loss and damage and third-party liability. Freight brokers are not required to maintain insurance coverage.

4. Financial Responsibility

Cargo agents are required to maintain financial responsibility for their businesses. This includes having the financial ability to pay claims in the event of cargo loss or damage. Freight brokers are not required to maintain financial responsibility.

5. Disciplinary Actions

Cargo agents are subject to disciplinary action by the FMC if they violate the terms of their license. Freight brokers are subject to disciplinary action by the FMCSA if they violate the terms of their license.

6. Enforcement Actions

Cargo agents can be subject to enforcement actions by the FMC. Enforcement actions can include fines, suspension, or revocation of the cargo agent’s license.

Freight brokers can be subject to enforcement actions by the FMCSA. Enforcement actions can include fines, suspension, or revocation of the freight broker’s license.

Conclusion

Cargo agents and freight brokers both play important roles in the shipping industry. Both types of professionals need to understand the shipping process and effectively communicate with clients and carrier companies. 

However, to succeed as freight brokers, they need to do freight broker training in Canada. 

FAQs

1. What is the primary difference between cargo agents and freight brokers?

The primary difference between cargo agents and freight brokers is that cargo agents work directly for a particular carrier. In contrast, freight brokers work with multiple carriers to find the best transportation options for their clients.

2. What services do cargo agents typically provide?

Cargo agents typically provide services related to the transportation of goods by air, land, or sea. This can include booking space on a vessel, tracking shipments, and handling documentation.

3. What services do freight brokers typically provide?

Freight brokers typically provide services related to the coordination of transportation of goods by multiple carriers. This can include finding the best rates and routes, arranging for pick-up and delivery, and tracking shipments.

4. What are some advantages of working with a Cargo Agent?

Some advantages of working with a cargo agent include having direct access to a carrier’s rates and services and tracking shipments directly with the airline.

5. What are some advantages of working with a Freight Broker?

Some advantages of working with a freight broker include having access to multiple carriers, which can provide more options and competitive rates, and outsourcing the coordination of transportation logistics.

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