Steps on how to open a Freight Brokerage Business

Freight logistics brokers work in the trucking industry, but they don’t drive the big rigs. Brokers, also called transportation or truck brokers, serve as the middleman between businesses or individuals in need of shipping and the truckers who provide the service. If you’re interested in logistics brokering, there are companies that will teach you the profession. You can also learn by going to work in the shipping or brokerage industries to gain hands-on experience or as an agent for an established broker.

Step 1

Talk to truckers, brokers and customers in the area where you plan to set up business. If you’re thinking of handling shipments in the Houston area, for example, you need to know what customers in the region are shipping into, out of and around the city.

Step 2

Draw up a freight brokerage business plan. Writing a plan good enough to impress investors or lenders will require that you decide on the area in which you intend to operate, the kind of goods you’re willing to arrange to ship and how you will compete with established brokers. This may make you aware of business needs you hadn’t thought of: If you’re brokering shipments of Gulf Coast shrimp to Indiana, you’ll need to employ truckers with refrigerated containers for transportation.

Step 3

Buy equipment. You can run a brokerage from a home office, but you’ll need a reliable cell phone with a generous plan to keep in touch with your drivers. You’ll also need a computer and software that can keep track of your shipments, your contracted trucks and your billing.

Step 4

Obtain a federal broker authority if you plan to broker shipments that travel over state lines. To apply, you’ll have to submit a $300 fee (as of 2011) with your paperwork, and wait four to six weeks for the application to go through. You’ll also have to show the government proof you’re financially sound in the form of a $10,000 surety bond or trust fund agreement.

Step 5

Set up a line of credit with your bank. The truckers you contract with may want to be paid before your customers have paid you. A line of credit makes sure that you have enough money to keep your truckers satisfied even if your customers pay late

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