A freight broker coordinates the transportation of goods from a manufacturer or seller to their customers’ locations. The broker links outgoing cargo with available trucks and must do so at a competitive price. He must know freight logistics and have a working knowledge of documentation needed for inter-state transport of goods. The start-up costs for opening a freight brokerage company depend on whether you plan to be a home-based business or operate out of a commercial location. You can start your freight brokerage company for as little as $5,000, as long as you plan to cover the first three months of your business expenses, including the amount you will need to pay carriers before being reimbursed by your shipping clients.
Complete all the appropriate documentation to start your freight brokerage. This includes selecting a structure for your business (limited liability company, for example), as well as registering and bonding your business. The Unified Carrier Registration Act of 2005 requires freight brokerage companies to register with the Division of Public Utilities and Carriers. Registration forms can be found online at ucr.in.gov. You will also need to acquire a “broker’s authority” that will cost you a $300 processing fee if you do the filing yourself or between $150 to $250 if you hire a company to do this for you. To protect your business, you will also want to have a surety bond of at least $10,000, which is a common requirement of large shippers with whom you’ll want to do business. Surety bonds can be obtained from banks or bonding companies.
Choose a location for your business. Depending on the amount of start-up capital you have available, you may choose to start out as a home-based business. You’ll want to have a dedicated space in your home where you can set up all the equipment you’ll need to run your business. If you plan to have employees, or want to start your business outside of the home, you can hire a commercial real estate specialist to help you choose a location that meets your needs and your budget.
Purchase marketing materials for use in promoting your business. You will want to make sure you have business cards, letterhead and even a website to allow potential customers to find your business. When networking, you’ll always want to have something to leave with potential customers. You may also consider an online or print advertising campaign to introduce your business and its services to potential clients.
Promote your freight brokerage business. Attend trade shows and training events where you can network with potential customers. To succeed, you are going to need to develop a strong relationship with all types of people who work in the freight industry. This includes shippers, import/export brokers and carriers. Subscribe to industry publications and consider placing an advertisement in one of them to build awareness of your business. Additionally, joining your local Chamber of Commerce can be a useful activity to help find potential customers.