If you are considering taking the plunge into freight brokering, then there is no better time than now. At the moment, freight brokering has become a booming business. As long as you are willing to invest your time and effort in learning this new business, you are guaranteed to attain plenty of success. So how do you become a freight broker with no experience? Follow these simple steps to become a freight broker:
First gain experience and knowledge of the industry. Then develop a business plan, choose a company type, name, and register your business. After this, find the right carriers and get your USDOT number and your broker authority. Afterward, obtain a freight broker bond and Contingent Cargo Insurance and General liability.
In this article, we will discuss all that relates to becoming a freight broker. So stay tuned for this and much more. This will certainly be an enlightening read for you.
What Does a Freight Broker Do?
A freight broker assists shipping companies in moving goods from one point to another. Instead of conducting this affair themselves, freight brokers find trucking companies to haul the cargo on their behalf. In doing so, the broker ensures that the trucking company charges less than the shipping company is willing to pay. This way, they make a profit.
Freight brokers broker deals with shippers and then facilitate the movement of the shipper’s freight. They keep the line of communication open with the carrier to update the status of the shipper’s products.
Freight brokers can operate their own business or work for a broker company. Some responsibilities of freight brokers include:
- They utilize their network of contacts and load boards to link carriers and shippers.
- On behalf of their clients, freight brokers negotiate the best shipping rates.
- They track shipments for their clients to ensure cargo arrives safely at its destination.
- Handling paperwork and compliance requirements necessary for transporting certain types of cargo.
- Ensuring carriers are paid for the services they render to shippers.
All in all, freight brokers connect shippers with carriers who will haul cargo. This is their most basic and important role.
How Do I Get Experience as a Freight Broker?
Before embarking on a career in freight brokering, the most important thing is acquiring experience and developing some brokering skills. Most of the time, this is usually hard, and there are several ways you can accomplish this. These are by personal reading, attending a freight broker training institute, and getting into the field.
The first step in gaining experience in this job is studying. It’s important to know how the freight industry operates before you can start brokering deals. One way of getting this experience is by picking up some books and gaining knowledge on how the industry operates. Freight broker training books can help you understand the characteristics of the freight industry, how to locate shippers, carriers, and agents. They also inform you on ways you can transport cargo at a cost profitable to you and carriers.
Another way you can gain experience is to attend a freight broker school. This will give you hands-on experience and knowledge from experienced brokers with years of experience. Look for a quality freight broker training school, and you will gain the experience you’ll need to become a freight broker.
Learning how to negotiate freight means that you have to gain experience in the field. Suppose you can first build up experience in the freight transport industry in another role before becoming a broker. In that case, you will get to understand the business better, and you’ll become better connected. So if any type of job opens up in the industry, don’t be afraid to take the chance.
How Long Does It Take To Become a Freight Broker?
The amount of time it takes to become an operational freight broker will usually vary depending on the level of experience and training you require before you are quite ready to undertake this business.
For most training schools, freight training can last for about 30 to 45 days. It also takes about 6-12 months to gain sufficient experience to become a functional freight broker who knows what they are doing. A freight broker license takes about 4-6 weeks to become active.
At the end of the day, you are looking at between one and one and a half years to become a freight broker.
How Much Does It Cost To Become a Freight Broker?
To become a certified freight broker, you need expert training. You also need to acquire a license from the Federal Motor Carrier Safety Administration (FMCSA). In addition to this, you also need a Surety Bond. When you combine all these, you get the cost of becoming a licensed freight broker.
Training will cost you from $300-$1,500. Procuring a license can cost you about $300. A surety bond can cost you from $900-$9,000 annually. So, all in all, it may cost you from $2,000-$10,000 to become a freight broker.
Is Becoming a Freight Broker Worth It?
Yes, it is. Becoming a freight broker can be quite lucrative. Once you complete training and enter the industry, you can earn commissions ranging from 6 to 7 figures per deal if you are a competent freight broker. Some brokers even earn as much as 8 figures. In addition to this, you also earn a salary of about $50,000 per year.
How Much Money Do You Need To Start a Freight Brokerage?
The business costs associated with starting a freight broker business have piqued the interest of many for a long time. There are expenses involved in getting started as a freight broker and costs of maintaining a business. These costs are, however, low compared to other industries. If you are looking to get started as a freight broker, here’s how much it will cost you:
- Licensing and Registration Costs– Freight brokers should register with the Federal Motor Carrier Safety Administration, which costs $300. A business license may also be required, and this will attract a $100 fee.
- Surety Bond Costs– All freight brokers registered with the FMCSA must have a surety bond as part of the licensing process. All licensed freight brokers must have a bond of at least $75,000. These bonds can cost from $938-$9,000 annually.
- Business Insurance Costs– The basics, in addition to general liability, may cost between $400-$2,000 per year.
- Software Costs– To manage everyday tasks, you may need software solutions that can cost $1,000-$5,000.
- Business Equipment and Office Costs– Freight brokers require little to set up an office and get business equipment. These expenses may range from $1,000-$3,000.
As you can see, the total upfront cost of becoming a freight broker can be from $4,000-$5,000 on the low end. On the higher end, the costs can run up to more than $10,000.
All in all, becoming a freight broker with no experience is quite possible. If you are looking to make it big in this industry, train adequately and gain enough experience.