Becoming a Freight Broker

A great way to maximize the money you can make in the trucking industry is to become a freight broker. It allows trucking companies to negotiate cargo hauling with other freight companies. With the help of truck brokerage software, it makes the process much easier. However, if you’re interested in expanding your business, you should learn a few things to start this profitable addition to your business. Why Become a Broker Once in a while you may get a call for a big load, but you realize that all your trucks are already on the road with other loads. This is where truck brokering comes into play. If you have a brokerage license from the FMCSA, you can sub that load out to another trucking company and take a small commission. Typically, a trucking company can only negotiate their own freight, which gives them a two-part opportunity cost: the lost job itself, and the brokering fee they could have gathered for arranging alternate cargo delivery. So how do you get a brokerage license? Broker Authority Requirements You don’t have to take an exam or have a background check to receive your freight brokerage authority. To start, you’ll need to obtain proof of insurance of $75,000 in the form of either a surety bond (obtained through an insurance company) or a trust fund. When you have this insurance, you can fill out and send the FMCSA’s OP1 Application for Broker Authority. You must also fill out the BOC-3 form, which designates your process agent, or legal representative. After submitting your application, wait for the FMCSA to issue a motor carrier...

Legal Tips for Freight Brokering

Freight brokers have to deal with shipments all over the state lines and because of this, the Federal Motor Carrier Safety Administration will oversee all freight broker authority businesses. When you’re in school to become a freight broker, you will learn be able to study in detail all the rules that deal with freight brokering. You may already know the basic requirements that are required when becoming a freight broker. This includes having an operating license from the FMCSA, the services of process agents, and a surety bond for possible financial liabilities. However, you might not know of the other rules that govern freight brokering. Working with Authorized Motor Carriers A freight broker is part of the transportation industry and works under the oversight of the Department of Transportation. Since brokers work closely with motor carriers, they need to register with the DOT using their FMCSA freight broker license. Make sure that you only work with entities that you recognize to avoid risks or liabilities. The motor carrier moving your load must carry an authority that matches yours. For example, if you have a property broker license, you can only work with a carrier that has a valid property motor carrier authority. If you arrange a load with a carrier that doesn’t have the right license, the FMCSA may subject you to penalties and fines. Frequent violations may lead to cancellation of your freight brokering license altogether. Record-Keeping Because liabilities are a part of brokering, freight brokers should always maintain a record of ever transaction for their future reference. You’ll be dealing with the same truck drivers and shippers...