How do I become a Freight Broker and Open My Own Business ?
Becoming a freight broker today can be very rewarding if you build your business from the right foundation. Many new freight broker businesses fail today because they truly do not realize what it is they are trying to accomplish. For anyone trying to start a new freight broker business there are several factors to consider. A freight broker and freight agents job duties are very similar. Every freight broker should be prepared to build their own business from contacting shippers and carriers and also to be prepared for the financial obligations of the firm.
The first step of becoming a freight broker is to get educated. This is probably the most important factor to starting your broker firm. Knowledge is key to success and you must know about the freight moving industry to be successful. LFS can help you learn from the logistical development program and work with you from the very beginning when you build your new freight broker business foundation.
Another important factor to understand is that you want to be a professional within an industry. What this means is in order for you to become a successful freight broker, you must be knowledgeable within an industry that needs your service. Being a professional within a key market and industry will allow you to focus on what type of freight you will be trying to move. To many new freight brokers that fail try to move freight within any industry and it it proves to be difficult when you are not focused on an
Listen to more about why you want to focus on One industry and become a professional.
Once you have focused on the right industry and you have enrolled in some form of freight broker school, you will want to begin to think about carriers that will want to move freight with you. Most new freight brokers who are focused within certain industry's will find that its not to difficult to meet qualified carriers to move freight with. You can have all the knowledge in the world, but with out a trucking company to move your loads, your going to be stuck sitting still. Before contacting them make sure you have enough knowledge on freight brokering and your training has enabled you to be confident in your contacts. You will want to focus however on the need of building a solid relationship with these carriers as you begin to move forward with your new freight broker business.
Now you have the right freight broker training information and you have chosen an industry as well as potential trucking company's to move your freight loads, you will want to move forward and obtain your freight broker license. Here are the steps to getting your property broker license under the guidelines of the FMCSA. Click the blue button below to see a more indepth guide to getting your freight broker license.
First Step : Form Your Freight Broker Company.
You can also let LFS Help you file for your Freight Broker Authority and get your company, Visit LFS Compliance Page
In order to apply for a property brokers license, you will need to have a legal company formed. LFS suggest for you to visit Incorporate.com. This is a very reputable online business formation company that has helped millions of people form their legal business and normally within a few days the process is complete. We recommend in contacting them and discussing if being an LLC or INC is the best fit for the State you live in.
Next : Visit the FMCSA Website and become knowledgeable.
Download the FMCSA Small Freight Broker Compliance Guide that was made public in 2012. The requirements are the same as of this moment.
Your Steps To Getting Your Freight Broker License Are :
For brokers of property: Proof of Insurance Coverage: a Surety Bond (Form BMC-84) or Trust Fund Agreement (Form BMC-85) in the amount of $75,000.
Form BOC-3, Designation of Process Agent Form (brokers may designate themselves as their own process agents in the State in which they are writing contracts) Learn more about " What Is A Freight Broker Process Agent "
Application processing fee: $300 (non-refundable) charged during the application process
Application processing time: Approximately 4-6 weeks
Keep in mind that once you’ve obtained your DOT registration, you must file a biennial update by submitting an MCS-150 form online.
You’re required to provide this update even if your company has not changed its information, has ceased interstate operations, or is no longer in business.
Having a freight broker business requires you keeping your company compliant and operating under the FMCSA guidelines. Learn More about "Freight Broker Compliance"
Next : Shop around For Your Surety Bond.
You will be required to have a surety bond in order to operate as a property broker. Once you have obtained a surety bond, the issuer of the bond will attach the bond to your property broker application via thru the FMCSA. Once the FMCSA receives your bond application, they will grant you active within a 21 day processing time.
Next: Get Proper Freight Broker Insurance.
Having proper freight broker insurance determines if shippers will actually do business with your new freight broker firm. The FMCSA does not require you to obtain insurance as they do require freight forwarders and trucking companies. SO theoretically you could open your freight broker company with just a property broker authority and approved surety bond. The negative side to this is most shippers will not do business with you.
Having the right insurance is key and this is probably the most expensive part of opening your broker company. We typically recommend having three types of insurance and a determining factor would also be what type of industry your working within. Insurance will separate you from those who are less committed in some ways in the eyes of the shipper. Freight shippers are interested in seeing a company with a solid insurance program that protects their product from liability and damage. When you book a load with a trucking company, you are responsible for the load by liability since you are the contracting freight broker company with the freight shipper. The trucking company will have insurance as well, but in many cases this may prove to leave a door open of liability in the " What if Situation " should ever arise.
Final : Build a " Freight Agent Business Model Foundation "
LFS is the only company in the industry that is focused on helping new freight brokers understand what this is. Anyone wanting to have their own freight broker business needs to understand that you can not do this business alone. The freight broker industry is very difficult for a one person show and only those with years of experience and solid clients can accomplish this. New freight broker firms need to have an established Freight Agent program within their company. This allows you to have multiple people who have been trained and are qualified to help represent your firm to shippers and carriers. This is also the only way for you to jump start your freight broker business the right way by working within a network of people. It is better to have 10 people contacting shippers and carriers daily which could results in hundreds of contacts daily versus just one individual only contacting few. Freight brokering is a numbers game. The more you contact, the more potential contracts you might receive. LFS has a solid "Freight Agent Business Model" that is taught and implemented within the Logistical Development Program.
Conclusion: Knowledge Is The Key To A successful freight broker business !
For anyone wanting to start their own freight broker business, knowledge is the key ingredient to being successful. The logistics industry is changing everyday and it only makes sense to get proper training and business consulting. This could be the very difference in someone being successful or failing within their new broker firm.
LFS Logistical Development Program can help anyone start and build their new business and the information and knowledge you will receive is priceless.