So, you want to be a freight broker? We get it. Freight brokers play an important role in the trucking and transportation sectors. With supply chain disruptions from the COVID-19 pandemic and e-commerce growth, more goods than ever before need to be transported. So, whose job is it to facilitate and track these shipments? Freight brokers play a big role in this process.
If you are considering becoming a freight broker, you first need to learn the details regarding what they do and the steps you need to take to begin a career as a freight broker. Don’t worry, this is where we come in. Let’s go into detail regarding what a freight broker does, what their responsibilities are, and what you need to do to become one.
What Do Freight Brokers Do?
A freight broker plays an essential role for both shippers and trucking companies. The fact is trucking companies are busy hauling loads and shippers are busy sending freight. They need a partner to help them match up with each other and that’s where freight brokers come in. Consider them a kind of matchmaker for shippers and trucking companies.
Freight brokers are generally responsible for the following:
- Sales development
- Marketing and lead generation
- Shipping quotes and estimates
- Order scheduling
- Order tracking
- Customer service and shipping status requests
- Collaboration with motor carriers, shippers, and dispatchers
- Load preparation
- Price negotiation and contract write ups
Freight brokers act as the missing link between shippers and motor carriers. Their job function is critical, and they get paid accordingly. Independent freight brokers can expect to make upwards of $100,000 per year. Sound enticing? Now you just need to know the steps to becoming a freight broker.
Steps to Become a Freight Broker
The first step in any new endeavor or job is to learn more about it and get a comprehensive idea of what you’ll be doing. Spend some time on the internet first researching what freight brokers do. The last thing you want to do is choose a career without due diligence and then not being satisfied with it. Don’t hesitate to do a lot of research.
After you have conducted research and decided to become a freight broker, then you will need to choose a freight broker school to attend. It is important to note that freight broker school is not a legal requirement to becoming a freight broker. Still, shippers and motor carriers are more likely to partner with a broker who has been formally trained in being a freight broker. You will also learn valuable tips and tricks to help you run your brokerage lean and successful.
Also consider jobs that are like freight brokers. You could get experience as a dispatcher, freight broker agent, logistics broker, or even a truck driver. All these jobs will give you valuable experience you can use to build your freight broker business.
Many freight broker training schools offer courses in-person to provide you with a more hands-on experience, while other training schools offer self-study online classes. Freight broker training school will teach you about industry trends, technology tools, best practices and how to operate your freight broker business in the field. You may select the classes you need to become an efficient freight broker. Want to know where the best schools are? We have your Top 5 Freight Broker Training Schools in the US right here!
Set Up Your Business and Create a Business Plan
There are multiple ways you can get set up as a freight broker. First, rather than striking out on your own, you could get hired to work with an established freight broker company. This will allow you to learn the ropes without the risk associated with creating and running your own company. From the inside, you can get industry experience and training and plan your strategy.
Setting up your business includes registering your company with federal and local authorities. The first thing you will need, much like any other business working in the transportation sector, is a USDOT number. The Department of Transportation required any company operating in the shipping and/or logistics sector be registered with a USDOT number. This is a necessary first step. To do so, you will need to fill out an OP-1 form. It will cost $300 and take a few weeks to process. Once approved, the FMCSA will send you your new motor carrier number in the mail.
Once you have gotten squared away with the federal government, you need to get your business plan set up. Have you come up with a name for your company? What’s your mission statement? Where do you plan on getting investment capital from? Investment capital is especially important because becoming a freight broker is not free. In addition to the $300 for your USDOT number. Finally, you’ll need to file a BOC-3 and select a process agent for your business. For more information on process agents, click or tap here. You will also need a $75,000 surety bond, but you will only pay a fraction of that amount.
Set Up a Comprehensive Marketing and Advertising Strategy
Just like any company, freight brokers must market themselves and advertise to get new business. You won’t be the only freight broker on the block, so it is critical you figure out a way to stand out from the crowd.
You will also need to decide what platforms will get your marketing message across the best. Will you do Facebook advertising or perhaps Google Adwords? You may start by listing your business with online directories that will direct potential shippers and carriers to your website. Raising awareness is an important step to becoming a successful freight brokerage business.
Just be careful when you choose a marketing and advertising partner. You may want to go with a full-service company who can help you set up your website and market your business for a low bundle price. There are a lot of bad actors out there that take advantage of individuals setting up new companies. Don’t let you be one of them. Conduct proper due diligence to ensure you find the right partner.
Set Up Your Office
You can’t run a business without an office. Whether you run your brokerage out of your home or an office, you need to have the right equipment for the job. Freight brokerages – much like so many other transportation companies – are becoming increasingly technological. You will need the basics, from a computer and printer to office supplies and a strong internet connection.
There are also different types of freight brokerage software solutions out there to help you get the job done and increase your productivity. Over time, as you run your company, you will likely invest in other tools to help you streamline your operation and provide a necessary suite of services for your motor carrier and shipper clients.
While many freight brokers are one-man or one-woman shows, many successful freight brokers run a multi-person operation. To be successful, you need to hire the right people. Start with an office manager and work your way down. Individuals with experience working in the trucking or transportation sectors should come to the front of the line.
Consider Your Costs
Any good business makes it and succeeds in a competitive marketplace by eliminating costs and providing value for the products and services they offer. So, let’s recap what you need, and the cost associated so that you can prepare yourself for success as a freight broker:
- FMCSA Registration: $300
- Local Business License: $75 – $250
- $75,000 Surety Bond Requirement: $1,000 – $8,000 (depending on credit and claims history)
- Office and Business Equipment: $500 – $2,500
- Dedicated Commercial Space: $1,000 – $2,500
- Business Insurance: $500 – $2,000
- Business Software: $1,000 – $4,000
- Marketing Costs: $500 – $1,000
As you can see, the total upfront cost of becoming a freight broker can range. You are looking at anything from $5,000 on the low end to $15,000 at the high end. But don’t worry, there’s good news. Not all these expenses are ongoing. However, there are a handful of costs as a freight broker you’ll want to plan for each year. These include your freight broker bond renewal, insurance renewals, ongoing software expenses, and business costs such as marketing or office equipment. These will be necessary to start and keep your business running. In the end, you need to make sure you have enough capital and do your research. Work hard, hire the right people, and set up your business well and you’ll be sure to operate a successful freight brokerage no matter the environment.