Have you ever thought about how the food on your plate, the items in your home, or the clothes on your back got to be where they are? Obviously, you bought them, but they didn’t just teleport to your location.
Chances are at least some of those things are with you right now because of the global economy, and what’s the backbone of the global economy? That’s right, it’s freight transport, and that’s why being a freight broker is one job opportunity you can’t afford to ignore. Don’t know what a freight broker is? Well, keep on reading to find out all about being a freight broker.
What Is A Freight Broker?
A freight broker is someone who acts as an intermediary between parties who ship cargo and a freight services provider. Basically, when some business or shipper wants to ship a commodity, they get in touch with a freight broker. The freight broker will in turn contact a freight services provider or carrier that will ensure the commodity in question arrives at its final destination.
The carrier will also bear the responsibility if the goods don’t get where they need to be after the carrier has received them. In the United States, all freight brokers must be registered with the Federal Motor Carrier Safety Administration which is responsible for issuing freight broker licenses. On a somewhat related note, we also have freight forwarders.
Freight forwarders are not freight brokers. While freight brokers never possess the goods, and as such have less risk of being found culpable if anything goes amiss, freight forwarders collect the commodities in question, assemble them till there’s a large enough number, then deliver them to the carrier.
That being said, a freight broker may also become a freight forwarder if they fulfill the requirements, but that’s a whole different story. Now, we’ll focus only on freight brokers.
Benefits Of Being A Freight Broker
1) Unlimited Profits:
Unlike in salaried employment, you have the freedom to work how you want to and whenever you want to. As a natural consequence of this, your potential profits are limited only by how much you decide to work. Freight brokers are paid on commission, and the annual earnings for the best freight brokers are easily six figures. Of course, this doesn’t take into consideration the potential profits if you decide to start a freight brokerage company.
2) You Can Work From Home:
Freight brokers can participate in the transportation of goods via land, sea, and air, all from the comfort of their living rooms. If you’re a truck driver who’s sick and tired of long trips and having to sit on one spot for hours on end, then you can make good use of your experience in the industry and become a freight broker
3) Ease Of Entry:
All you need to become a freight broker is a freight broker license; it’s a smooth process you can complete in six easy steps.
How To Get A Freight Broker License In Six Easy Steps
1) Get Trained:
In truth, this step isn’t required. However, we are here to help you out on your journey to becoming a freight broker, and one thing that can give you a big advantage over other freight brokers is getting some training beforehand. Because being a freight broker is such a great job, there are lots of guys who will get in without any training. Set yourself apart with the steps you take.
2) Decide On The Structure Of Your Business:
This is one of the required steps as a freight broker can work as a sole proprietor, a partner, or as part of a corporation. The documentation needed for each individual structure is different. In addition, the tax you will have to pay will also differ, so get in touch with someone with experience in the field as well as a tax attorney before making your pick.
3) Get Your Broker Authority:
Another of the needed steps in getting your broker authority. Broker authority is the authorization given by the government that lets you act as an intermediary between carriers and shippers. To get your broker authority, you need to submit an OP-1 form to the Federal Motor Carrier Safety Administration. When you do this, you have to decide whether you want to be a broker of household goods or of non-household goods. Each requires $300, and you could be both if you so desire.
4) Get In Touch With A Surety Company:
The Federal Motor Carrier Safety Administration requires all freight brokers to have a surety bond to reduce the likelihood of freight brokers breaking the rules. Hence, this is one of the most important steps. The amount required is $75,000. However, you can have a surety company put up the bond on your behalf for a small price. Convenient isn’t it? So long as you don’t run afoul of the Federal Motor Carrier Safety Administration, you won’t have to pay any more for this.
5) Get An Agent:
You’ll need a process agent in any state where you enter into contractual agreements. It is the responsibility of the process agent to accept any court papers that you are served in the state. You can choose to have a different process agent for each state or secure the services of a company that acts in all the US states. You also need to inform the Federal Motor Carrier Safety Administration of your process agent using the BOC-3 form. Due to the legal implications of doing so, this is one of several steps you can’t skip.
6) Register With The Federal Motor Carrier Safety Administration:
This is the final of the six steps. To register with the Federal Motor Carrier Administration, you need to go through the Unified Registration System. Once this is done, familiarize yourself with the rules of interstate commerce in the states you work in. Remember, you have $75,000 on the line.
Once you have your freight broker license, you’ll need to get in contact with shippers and carriers; that doesn’t have to be a difficult process. We offer an integrated technology solution that can help you do just that. Reach out to us, you won’t regret it.