How to Become a Freight Broker

Freight brokers are liaisons who match the need for transportation with the means for transportation. That is, they are the people who act as agents and middle men who arrange for the transportation of goods produced by companies, with shipping and other transportation companies. They are not involved in the actual physical transportation of goods. That is, they do not personally supervise it. All they do is the match making part. If you see the history of transportation, there has always been a need for agents who can arrange transport easily and effectively!

Out of the different business opportunities available as a broker, freight broking is one of the best. If a company needs a transportation facility for exporting or importing goods domestically or internationally, they find the right transportation companies for them. These transportation companies may be shipping companies, which have freight carriers or truck companies which arrange land transport.

There are schools now that provide necessary training for becoming a freight broker. Freight brokerage is quite a profitable business with lucrative returns. With the world economy globalizing, new opportunities for trade have opened up and along with that, the need for transportation has heightened too. So one can consider freight brokerage to be a challenging business, full of opportunities.

One needs to have a very good knowledge of transportation facilities made available by different shipping companies as well as other facilities and make them available. You need to develop a network and rapport with companies in need for transportation and provide it for them reliably. The earnings are through commissions that the freight broker gets from both sides of a deal.

How to Become a Freight Broker Professionally
If you want to know how to become a freight broker, follow the following steps systematically:

Step 1: Get Professional Training to Become a Freight Broker
Find schools that offer professional training required to become a freight broker. Many transportation intermediaries offer this kind of training. However, there is no formal or official educational degree requirement to become a freight broker. You need to develop basic marketing and selling skills and understand all the intricacies of how a transportation business works. You need to learn negotiating tactics. A nice way to learn the in and out of this business is to work under a licensed freight broker and get hands on experience.

Step 2: Get the Freight Brokerage License and Registration
To become a legitimate freight broker, one has to get a license from the Federal Motor Carrier Safety Administration (FMCSA) which is a division of US department of transportation. It is the apex authority in USA that grants licenses for freight brokerage. The FMCSA charges a fee of $300 USD to complete all the formalities. There is a Form called OP-1 that you need to fill and submit for the same.

Only obtaining a license from FMCSA is not enough. As collateral, the freight broker must get a $10,000 surety bond or trust fund. This is a kind of security, in order to cover the damages in case a freight broker fails to meet his obligations.

One last piece of procedure involves, selecting a processing agent who operates in your state who covers the legal issues and litigation problems that may arise in your business. Form number BOC-3 is needed for choosing that agent and the fee charged is $50. With this, you are all set to start your own independent freight broking business.

Step 3: Start Networking
Networking is an essential part of freight brokerage business. Get the list of companies in need of transportation in your area. Also, get a list of the freight carrier and land transport agencies in your area. Introduce yourself to these companies and start making deals between them to create business opportunities. You carry a huge responsibility on your shoulders as a freight broker since the company will select transport according to your recommendation. You must ensure that both sides get a cost effective deal and the relevant paperwork of agreements between the two is carried out.

Hope this article has given you the basic information regarding, how to become a freight broker. Wish you a great career ahead!