A freight broker is one of the top industries and is crucial to industries worldwide. A freight broker plays a very crucial role in freight transport. Being a freight broker can be a profitable, fulfilling, and flexible career. Freight brokers act as the middle person between a shipper and a carrier to expertly and safely move goods from the point of origin to the point of consumption.
To become a freight broker, one needs to gain experience in the industry, attend online or in-person training classes, begin at an entry-level freight broker position to fine-tune the skills, register a brokerage company, apply for a motor carrier authority, etc. Once all these steps are completed and the business plan is finalized, financing can be secured, broker contracts can be created, shippers and carriers can be identified, and rates can be set. If all these steps sound astounding and intimidating, one can go for becoming a freight broker.
How much do freight brokers make?
The national average base salary for freight brokers in the US is $62,105. But on top of this salary, you can also make commissions. On average, freight brokers may add $28,000 to their salary through commissions each year.
How one can become a freight broker?
The process of becoming a freight broker will take some time and several steps. If you already have some experience in the freight industry, this will help, but it isn’t a requirement for starting your career. Some of the steps that one need to follow for becoming a broker for trucking are such as –
Step 1 – Completing the freight broker training
There is no industry requirement for freight broker training. However, learning about the industry and how it works will benefit you to jumpstart your career. You can skip this step if you have worked in the logistics business or as a trucker or dispatcher. Many freight broker training classes are online, making it simple to formulate for your new career even while working another job. Most classes take only a few weeks. In the end, you will get a certificate that you can use on your resume to show you are prepared for the job.
Step 2 – Registering your freight broker business
Consider the finest framework for your brokerage business. Generally, brokers can select a limited liability corporation (LLC). You will need to register your business to get a tax ID and be able to work under that name. This will also acquiesce you to take out loans on behalf of your business to amass the necessary equipment. You will also need to register your business with your local licensing department. Alternatively, you will need to find a job with an existing brokerage company. If you are just getting started becoming a freight broker, working for an existing company might be the way to get started.
Step 3 – Obtaining a broker authority
The Federal Motor Carrier Safety Administration (i.e. FMCSA) inspects the trucking industry. You will require getting a broker license for becoming a broker for trucking before you can start working in this field. Brokers need to pay $300 for the application to obtain a motor carrier number. As part of the application, you will need to prove you have insurance and a surety bond.
Step 4 – Seeking out of the carriers
Searching for a reputable carrier is crucial. Without a good list of carriers, you will struggle to build and maintain a quality relationship with the shippers. One needs to look for carriers with a broad network of trucks and drivers and a diverse footprint. This will make it easier for you to work with them and partner with shippers throughout the country. Additionally, you will want to contemplate the types of freight these carriers can haul. If you are planning to work with special types of freight, such as oversized loads or hazardous materials, make sure that the carriers can entertain these options. The more quality carriers you have in your network, the more negotiating power you will have when serving as an intermediary between parties.
Step 5 – Purchasing insurance and a surety bond
To operate your business, you will need contingent cargo and general liability insurance as well as a surety bond. Both are requirements for preeminent broker authority with FMCSA. Your annual surety bond premium will be about 1-10% of the total amount of the total value of your surety bond.
Step 6 – Building a budget and acquiring a capital
Starting a freight brokerage company needs capital to get started. You will need some technology tools and the funds to pay for your insurance and surety bond. The overhead required for a freight brokerage business is something you would not want to avoid. Calculate these needs carefully before imminent lenders.
Step 7 – Reaching out to your shippers
Now that you have your business requirements in place and have built a good relationship with carriers, you are ready to start searching for shippers in your area. Whether you start your own logistic business or work for an existing brokerage company. You will need to constantly be reaching out to local shipping companies to search for new business. Additionally, consider how you will market yourself to make shippers familiar with your business so that they reach out to you directly.
Freight broker agents will always be in demand, as there will always be products that need to be transported from one place to another. Those who are interested in becoming a freight broker are more likely to have a successful and profitable career if they cynosure on customer service and let everything else fall into place.