A freight broker is someone who assists shippers with freight ready to haul by finding carriers (drivers) who are qualified to haul the load. They are responsible for arranging the transportation and tracking of a load hauled by a freight carrier.
What do you need to start your freight broker business?
Federal Application Requirements: Every brokerage that makes interstate shipments needs authorization from the Federal Motor Carrier Safety Administration (FMCSA), a division of the Department of Transportation. After you submit your paperwork and a processing fee, it takes roughly four to six weeks for the government to greenlight you.
Manage the Money: To get FMCSA approval, you have to show that you have a $75,000 surety bond with an insurer. If for any reason you aren’t able to deliver on a contract, the bond covers any losses and penalties due. It’s also important to set up a line of credit with your bank, possibly for as much as $250,000. Credit can be a lifesaver when you have to pay truckers before your customers pay you.
Know Your Load Boards: Load boards are an example of how computers make a brokerage startup easier. Your freight brokerage business is useless without truckers to ship goods for you. You can use online load boards to look for truckers who can transport what you need to have carted or post your needs and see who responds.
There are both free and paid load boards. Explore them and see which boards within your budget offer the services and contacts you need.
Find the Right Software: Transportation management software (TMS) makes a big difference to your bottom line. Various TMS products plan routes, manage your paperwork and records, set up shipping in advance, send invoices and dispatch drivers. If there’s a crisis and you have to find a new driver or a new route, TMS can help. It’s worth investing in good software that provides what your business needs.
Growth + Change = Opportunity! How are you going to capitalize on the opportunity as a freight broker, agent, dispatcher or box truck carrier!?