What is a Freight Broker?
A freight broker is legally a property broker, which is the term established by the Federal Motor Carrier Safety Administration (FMCSA), a division of the United States Department of Transportation. It describes licensed individuals or corporations that help make a shipper and an authorized motor carrier successful in the transporting of freight.
What are the requirements to become a Freight Broker?
The legal documents needed to operate as a freight broker are:
- A Broker’s Authority, available through the FMCSA for a $300 fee. You fill out Form OP-1 and file for your authority to operate as a broker.
- A Surety Bond or Trust Fund, which you can obtain from a bank or bonding company. The cost varies depending on your personal credit. You’re required to carry a $75,000 bond or trust. The form filed with this is BMC-84 or BMC-85.
- Processing Agent, which runs approximately $50, with form BOC-3.
- File a Unified Carrier Registration (UCR)
Is there another way to get into the industry without having to get a bond and license?
Yes. You can open a freight agency or become a freight broker agent with little risk and without obtaining your own licensing. In that case, you’d operate as an agent, under the umbrella of another broker’s authority, and you would do a split with the broker on your profits.
What equipment will I need to get started?
If you want to open a freight brokerage or agency, you’ll need a computer with high-speed Internet, a fax/copy machine, a telephone, and phone service with inexpensive unlimited long distance.
Is this a job that I can do from home?
Absolutely. The majority of agents and many brokers work out of their home offices.
How long will it take for my business to become profitable?
It will take some time to build up your customer database, just as with any business that you start. Typically it can take three to six months of disciplined work to show a substantial profit. Sometimes it takes much less time, sometimes more, but once you begin securing the right customers, they normally have residual shipping, so the sale repeats itself over and over – and you don’t need hundreds of customers to make a great living in this field. Your level of success depends on many factors, such as your level of determination, your tenacity, and your genuine desire to help your customers succeed.
How much money can I make as a freight broker or agent?
Again, your individual earnings will depend on your personal abilities and how determined you are to succeed. As a full-time broker or agent, you can make from $40,000 to well over $200,000 or more. The potential is virtually unlimited as you grow – there are many multi-million dollar producers built up over time.
How do I find customers?
In the program, we go into detail on this subject, showing you many different tools for locating and developing your shippers, such as publications, reference sources, and Internet sources.
Is this a growing field? Is it in demand?
As of this writing, there are approximately 15,000 licensed transportation brokers in the nation, but a large number are inactive. This is still a relatively new industry, as there were only around 70 brokers in 1970. It’s estimated that freight brokers accounted for over 10% of the shipping industry, or roughly $60 billion out of $600 billion, in revenues. A recent article in the Wall Street Journal cited freight brokerage and logistics as the fastest-growing sector of the transportation industry.
How do I decide whether to start my own brokerage or become an agent?
There are many factors in making this decision, which we go over in detail during the program. Three major factors are money, time, and experience, among others. Either way, you’ll need three to six months’ worth of living expenses or a supplemental income while you establish your business.
How long has your brokerage office been open?
Brooke Transportation Training Solutions opened 9 years ago with our owner and his cousin working from his garage. Nine years later we are working in a corporate district.
How much money can I expect to make?
As a full-time Broker or Agent, you can make anywhere from $40,000 to well over $150,000 after you have developed you client database. As time goes on, and you continue to secure customers, your revenue will also grow. You set your own limits.
How do I find customers?
During class we will show Freight Broker Training students over 20 different resources for finding customers, including publications, associations, reference sources, internet resources, etc.
What kind of licensing or bonds do I need to be a freight broker agent?
You absolutely do not need to buy a license or a bond to be a freight broker agent. Working as a freight broker agent is similar in many ways to being a realtor, insurance agent or hair stylist. The company you work under pays many of the costs needed to run the brokerage so you don’t have to.
Others may convince you to spend 1000s on a freight broker license and bond that you don’t need as an agent. Other schools sell licenses and bonds, we do not.
The best freight brokers in the industry come on graduation day to talk to our top-notch graduates about working with them.
How do I decide whether to start my own brokerage or be an agent for another?
There are many factors in making this decision. Money, experience, and time are three major factors. You will need 3 – 6 months living expenses saved to live on while you get your business established. If you open your own brokerage, you will need additional moneys for startup costs.
The support from working as an agent and learning from their experience is invaluable.
Establishing your own brokerage will take more time than becoming an agent. All these issues are discussed more thoroughly in our training course (click here to download enrollment form)
Do I need a lawyer or other type of professional to file for motor carrier and/or property broker authority?
No. The Federal Motor Carrier Administration’s website has all the forms and instructions you need to file for motor carrier and/or property broker authority. They also accept questions by phone: 1-800-832-5660.
Can an expert speed up the process of getting my authority?
No. The process speed is the same no matter who applies. You will be given a temporary MC number instantly. That MC number will become permanent and active after a 10-day waiting period once you have met the bond and BOC-3 requirements.
How qualified are the instructors at Brooke Transportation Transportation Training?
BTTS instructors are experts in their fields and experienced teachers. They developed the curriculum; lesson plans and take home materials from the knowledge they learned as successful freight brokers.
Are there different levels of broker certification (i.e., Master Broker, Diamond, Platinum, Gold , Silver, or Journeyman Broker)?
There is only one level of broker certification, Property Broker, commonly called a Freight Broker. The Federal Motor Carrier Safety Administration (FMCSA) does not recognize any other title than Property Broker. Choose additional schooling not for a better certification but to hone your skills.
What is freight factoring?
With Freight Factoring we give a trucking company quick cash for accounts receivables. Pay drivers and expenses in 24 hours… we collect from your customer in the customary 30 days. This is an excellent way to stabilize working capital and boost your company’s cash flow. This is not a bank type loan. This is an alternative to traditional bank lending and is especially important in the current economic climate. Factoring is an effective financing tool used by both small business and many Fortune 500 companies.