Jul 19, 2017 • Brokers

Freight Broker License

Freight Broker License

Learn how to get a freight broker license and move freight in a few easy steps.

Freight Broker License

The freight industry is continually expanding and having a freight broker license gives you the authority to earn money by moving truck freight without actually hauling it.

A freight broker license allows freight brokers the authority to move freight by connecting shippers with carriers, essentially brokering the deal. Freight brokers are hired by shippers who have freight that needs to be hauled from one location to another.

Let’s say there is a furniture warehouse in Texas that needs to ship its freight to department stores in Georgia. The warehouse representative is the shipper, who needs to find a carrier to haul the load. This is where the freight broker comes in.

With a freight broker license you are paid by the shipper to find a carrier to haul the load. You can use your broker authority to find qualified carriers on load boards like Truckloads by either posting information about your freight or by doing a truck search to find a potentially interested carrier.

Freight Broker License Cost

To get a freight broker license and have broker authority you must apply for a US DOT number with the Department of Transportation first. Once approved, use your DOT Number to get a Motor Carrier (MC) number and broker authority with the Federal Motor Carrier Safety Administration (FMCSA). This is approved through the completion of the OP-1 Form which includes a $300 application fee.

Broker Authority

Having broker authority isn’t the only requirement to become a freight broker. You will need to decide if you want to start a freight broker company or if you want to work for an established brokerage company.

Regardless of your choice, you should be sure to do ample research in order to better understand the nuances of the trucking industry and which options are best for you. We’ve provided a step-by-step guide to help you become a freight broker.

Guide to Become a Freight Broker

TagsFreight Broker

How to Become a Freight Broker? [h2] How to Become a Freight Broker? [/h2] [p]To become a freight broker you need to understand the <a href="https://truckerpath.com/blog/trucking-industry-trends/">trucking industry trends</a> first. Thousands of products need to be moved across America and companies use every venue possible to ship their freight, but none more than through truck freight. The trucking industry produced $726.4 billion in revenue for 2015 and freight tonnage has increased since. Freight is hauled by truck drivers but moved by freight brokers. Here's how you can become a freight broker and enjoy a piece of the lucrative pie. [/p] [h2]1. Register your Freight Broker Company [/h2] [p] There are a couple routes you can choose to become a freight broker. The easiest way to start is to get hired by an established freight broker company. There you will fall under their insurance and use their capital as well as being provided training about the trucking industry. If you've already done this and have the necessary capital, this is where you would be registering your business with the local licensing department. Once you register your LLC you will receive your Tax ID Number [a href="https://irs-tax-id.com/?utm_source=bing&utm_medihttps://irs-tax-id.com/?utm_source=bing&utm_medium=cpc&utm_campaign=irs%20tax%20id%2Fein&utm_term=irs.gov%20tax%20id%20number&utm_content=irsum=cpc&utm_campaign=irs%20tax%20id%2Fein&utm_term=irs.gov%20tax%20id%20number&utm_content=irs"]from the IRS[/a]. [/p] [h2]2. Have a Plan For Your Freight Broker Company [/h2] [p] The most important part of becoming a freight broker is to have a clear vision and plan, especially if you need to generate funding from lenders. Know your target, stick to your strengths, and don’t be afraid to grow. [/p] [p] Understand your region and what types of loads move through, who's your ideal customer base? What type of services will you offer? How will you market your freight brokerage? [/p] [giphy]<iframe src="https://giphy.com/embed/Sg21YDdh3Onqo" width="480" height="288" frameBorder="0" class="giphy-embed" allowFullScreen></iframe>[/giphy] [h2]3. Build a Carrier Base [/h2] [p]Life as a freight broker is all about who you know. Networking and connecting with motor carriers is the only way you will succeed in moving freight. You need to start building a list of trucking companies with capacity and willingness to work with you. [/p] [p]This is when networking meets relationship building. Establishing trust and showing that your work efficiently and provide good service can be the difference when finding carriers. The best way to find carriers is by using load boards from trusted companies like Trucker Path Truckloads. Load boards allow you to post your freight for carriers to view and then contact you if they're interested in hauling them. This way you can move more loads quickly and from anywhere. [/p] [p] Don't forget, freight brokers also need to connect with shippers who need freight moved. Here's a closer look at <a href="https://truckerpath.com/blog/how-do-freight-brokers-find-shippers/">how freight brokers find shippers</a>. [/p] [h2]4. Freight Broker Authority [/h2] [p]You’re well on your way to becoming a freight broker now that you have a registered business and a carrier group to connect with, but there are still a few more requirements. You must apply for a US DOT number with your local Department of Transportation branch. Once you are approved, take your DOT Number to the Federal Motor Carrier Safety Administration (FMCSA) to get a Motor Carrier (MC) number and broker authority. This is approved through the completion of the [a href="https://www.fmcsa.dot.gov/registration/form-op-1-application-motor-property-carrier-and-broker-authority"]OP-1 Form which includes a $300 application fee[/a].[/p] [p] Here are a few more details as to how you can get your <a href="https://truckerpath.com/blog/freight-broker-license/">freight broker license</a>. [/p] [h2]5. Freight Broker Bond [/h2] [p] To show carriers and companies alike you have the financial backing to broker your business you will need at least a $75,000 <a href="https://truckerpath.com/blog/freight-broker-bond/">Freight Broker Bond </a>(BMC-84 or BMC-85). Think of this as insurance for your business. This will cover you in the instance something goes wrong leading to monetary losses of a company. [/p] [p] Let's say the carrier you contracted to haul a load shows up to the receiver with a truckload of spoiled milk because you instructed them to cool the reefer to 74 degrees instead of 47. You were deemed responsible and your client seeks repayment of damages for a load of milk valued at $65,000. Your bond covers that cost similar to the way car insurance companies handle a car accident. [/p] [giphy]<iframe src="https://giphy.com/embed/3o6Zt2iHqqrjNlbPS8" width="480" height="270" frameBorder="0" class="giphy-embed" allowFullScreen></iframe>[/giphy] [h2]6. BOC-3 Blanket of Coverage [/h2] [p] One of the last filings you will have to complete in order to become a freight broker is your [a href="https://www.fmcsa.dot.gov/registration/form-boc-3-designation-agents-service-process"]BOC-3[/a]. This is the Blanket of Coverage for your company. Basically, you must file your BOC-3 in each state you will be operating. You will need to select a process agent to file. The process agent is the company who will be handling your legal processes in each state you have operating authority. [button-white href="https://www.fmcsa.dot.gov/registration/process-agents"]List of FMCSA Agents[/button-white] [/p] [h2]7. Freight Broker Essentials [/h2] [p]The tools of the trade for a freight broker are office equipment and supplies to make work easier and more organized. You'll need the basics like a computer with internet, printer, scanner, and fax machine. But you'll also need a phone with several lines and a quality headset to communicate with drivers and clients. [giphy]<iframe src="https://giphy.com/embed/VmNVXIMH3bCsE" width="480" height="353" frameBorder="0" class="giphy-embed" allowFullScreen></iframe>[/giphy] [/p] [p] Don't forget<a href="https://truckerpath.com/blog/freight-broker-software/"> broker software</a> as you'll want software that allows you to keep track of your loads, customers, carrier locations, and truck status (some load boards will do all of this for you). DR Dispatch and ITS Dispatch are a few of the programs that can be beneficial. [/p] [p] Look for broker software offering GPS tracking based on logged location updates, bill of lading/invoice generators, pickup and delivery location (shed) logs, note taking/documentation, and most importantly rate confirmation generation. These are the essential functions needed to manage your loads from pick up to delivery. [/p] [h2]8. Freight Brokerage Financials [/h2] [p]In order to continue your carrier relations, you need to get backing from a bank. As a freight broker, you will be paying the carrier after they deliver the load. Pay terms for carriers range from 1-28 days (sometimes more). Whereas you will be extending the customer a line of credit or they will pay up front for the services. [/p] [p] You make your money off of the margin known as the "spread". For example: [ul] [li]Company X pays you $3,000 to find a motor carrier[/li] [li]You pay Carrier Y $2,500 to haul the load[/li] [li]You earn $500 for brokering the arrangement. Of course, this isn't all profit as overhead costs will apply, but you get a general idea.[/li] [/ul] [h2]9. Marketing Your Freight Company [/h2] Lastly, in order to succeed as a freight broker, you have to make a name for yourself by building awareness surrounding your freight company. Reliable service that is transparent and convenient is key to building a reputation with carriers. Word of mouth is critical for growing your freight business locally but you have to put yourself out there and raise awareness just like any other startup if you want to be a successful freight broker. [/p] [button-green href="https://truckerpath.com/truckloads/broker-load-board/?utm_source=blog&utm_medium=becomeafreightbroker&utm_campaign=july12"]Get Started With Truckloads[/button-green]

Jul 12, 2017 • Brokers

Industry Update - November 22, 2019 <h4><strong>By Paul DeCoste</strong></h4> <h3><strong>Did you Know?</strong></h3> The trucker-themed movie, <a href="https://en.wikipedia.org/wiki/Roadgames">Roadgames</a>, came out this week almost 30 years ago. On November 19<sup>th</sup>, 1981. Starring Stacy Keach and Jamie Lee Curtis, this film is a personal favorite of Quentin Tarantino. <h3></h3> <h3><strong>Industry Update</strong></h3> The <a href="https://globalnews.ca/news/6199178/cn-rail-strike-3rd-day/">strike at CN Railway</a>, Canada’s largest railroad, has entered its third day. 3,200 unionized workers began their strike on Thursday, and it has been recorded as the biggest company strike in a decade. The union is mainly fighting against worker fatigue and making sure that worker’s breaks are not reduced. <h3></h3> CN’s stock has slowly fell by 3$ over the past three days of this strike. <h3></h3> <h3><strong>Regulations</strong></h3> House Democrats in Connecticut want the governor to <a href="https://cdllife.com/2019/dems-tell-connecticut-governor-to-revive-truck-only-toll-plan/">rethink a plan that will only toll commercial vehicles on 12 bridges throughout the state</a>. The funding plan, officially titled “CT2030”, will only toll semi-trucks and other commercial vehicles and is estimated to rake in $150 million in revenue per year. The Connecticut House Speaker, Joe Aresimowicz, argues that commercial vehicles do majority of the damage to interstate roads and therefore, should be tolled at a rate that is 7x higher than the rate for passenger vehicles. <h3></h3> Governor Lamont has since stated that, “the truck-only option provides too little revenue, too slowly and too piecemeal to make a meaningful difference.” For the time being, highway tolls in Connecticut will remain the same to all vehicles that pay their fees. <h3></h3> <h3><strong>ELD Update</strong></h3> <a href="https://www.ttnews.com/articles/uber-freight-subsidizes-geotab-elds-0">Uber has recently partnered with Geotab and announced an interesting deal</a> to supply small carriers with their ELD service. Small carriers with 10 trucks or fewer are eligible to receive a free Geotab ELD as well as a free year of Uber Freight services. However, there’s a catch. <h3></h3> Carriers that accept this deal must agree to share their telematics data with Uber Freight. The breakdown of exactly what kind of data will be shared has yet to be announced but the value of telematics data has been on the rise in recent years and there is not telling how much valuable information you could end up giving away. <h3></h3> <h3>"Movember"</h3> <a href="https://www.trucker.com/drivers/maxitrans-supporting-mens-health-movember-drive">MaxiTRANS is an Australian trailer manufacturer and they are using “Movember” to raise awareness</a> for mins health issues. Issues that include prostate and testicular cancer, mental health and suicide prevention. The company even commissioned an entire reefer trailer that is branded with Movember on all walls.

Nov 22, 2019 • Carriers

Recourse vs Non Recourse Factoring [p]Get paid in a day with freight factoring and understand the benefits and differences between recourse vs non recourse factoring.[/p] [h2]Recourse vs Non Recourse Factoring[/h2] [p]What's the difference between recourse vs non recourse freight factoring actoring? Say you're an owner-operator who's interested in freight factoring because you no longer want to wait 30 days to get paid for hauling a load. You come across a few factoring companies offering different rates and notice some are recourse factoring and others are non-recourse but don't know which freight factoring option is best.[/p] [h2]Recourse Freight Factoring[/h2] [p]With recourse freight factoring, you agree to sell your invoices to a factoring company that will then pay you after hauling a load (days to pay vary) however, you're responsible for collections from your client. Recourse factoring is commonly used in factoring finance however it presents the highest risk.[/p] [p] Even if a recourse factoring company has taken on your invoice or provided you an advance, you are still liable if they are unable to collect from your clients. This puts your business at risk for a potential loss.[/p] [h2] Non Recourse Freight Factoring [/h2] [p]The opposite is true for non recourse freight factoring. When you sell your invoices to the factoring company, you are not liable to collect from your clients. Instead, the factoring company pays you after hauling a load and they assume the risk if your client fails to pay. Due to this, typically a non recourse factoring rate is slightly higher because the burden to collect is placed on the factoring company and not you.[/p] [p] If you're an <a href="https://truckerpath.com/blog/how-to-become-an-owner-operator/">owner-operator</a> or manage a small fleet, it's usually more beneficial to choose non-recourse factoring in order to avoid a potential loss in revenue if there are complications with collections. Choosing a non recourse factoring company like Trucker Path InstaPay allows you to focus on running your business and haul more loads.[/p] [button-green href="https://truckerpath.com/instapay/?utm_source=blog&utm_medium=recourseornonJuly5"]Learn about InstaPay[/button-green] [video id=h3kXwM59BgM]

Jul 18, 2017 • Carriers