It’s a good thing when new people want to move into the freight brokerage. It’s a field that can be tough to break into. Learning the ropes for a freight brokerage can be overwhelming. The steps to get a brokerage authority may seem confusing. But if you want to get your freight brokerage authority, we’ve got some information that will help you.
Get Experience Before You Get Your Brokerage Authority
The logistics industry isn’t one to jump into without getting your feet wet. We tell people who want to be long-distance truck drivers to sign on as a driver for a company that will provide the rig and trailer for at least a year before purchasing your own rig. It’s common sense – don’t buy equipment until you’re sure you want the life on the road.
We’d give the same advice to anyone who wants to break into the freight brokerage field. Get some experience and training from an existing freight brokerage company. It’s not a job for everyone. The skills can be learned and the techniques mastered, but it’s a stressful job. Learning the industry and the terminology while getting a salary is smart.
When you’re ready to start your own freight brokerage business, you’ll need brokerage software. You don’t need all the bells and whistles the big-name brokerage software will offer at a price that a start-up can’t afford. TruckingOffice Brokerage has a free one-month trial so you can experience our software for your freight brokerage.
Read and Understand the Requirements*
Right from the FMCSA website:
- For brokers of property: Proof of Insurance Coverage: a Surety Bond (Form BMC-84) or Trust Fund Agreement (Form BMC-85) in the amount of $75,000.
- For brokers of household goods: Proof of Insurance Coverage: a Surety Bond (Form BMC-84) or Trust Fund Agreement (Form BMC-85) in the amount of $75,000.
- Form BOC-3, Designation of Process Agent Form (brokers may designate themselves as their own process agents in the State in which they are writing contracts)
- Application processing fee: $300 (non-refundable) charged during the application process
Insurance
You have to buy insurance for your business. (That’s not stupid – get insurance for any company you open!) In this case, it’s currently $75,000. The form you have to sign is complicated, so take your time to understand what you’re buying and how you’re reporting it to the government. This is a serious binding and important document. If you don’t understand it, don’t sign it until you do.
Finding an insurance broker who sells the insurance for your new business can be simplified by using an internet search. That can be a pricey investment, so you might look for a company that allows you to pay monthly.
Process Agent Form
When applying for a new trucking authority, it’s necessary to find and report an agent that will respresent the trucking business. The same form is used for truck freight brokers – but there’s no need for another person to be involved. You may indicate yourself for the role. That’s simpler and easier to fill out.
But…
File with the Government – by MAIL? Yep!
These forms that you have to fill out must be mailed in. You can’t fill them out online and email them.
(Yes, it is the 21st century and I think it’s because they own the USPS.)
After all that – and the $300 non-refundable fee, you’ll get your brokerage authority 4-6 weeks later.
Now you’re running your own freight brokerage.
Running a Freight Brokerage Start Up
We’re not going to pretend to give you advice on how to get started in a field as complicated and diverse as freight brokerages. What we will do is suggest that starting any business takes time, thought, and cash. So let us recommend SCORE. This national organization can help you get your business up and running for free. They won’t do it for you, but you will work with men and women who have been in your industry and who understand the laws in your state to start a business. They have videos that can get you started and they have retired executives who can coach you through the rough start that most new businesses face.
We will say this:
Get Organized From the Start
This is not a business you run with post-it notes and reminders written on the back of envelopes. Freight brokers must be organized. When loads get lost (they will) or drivers get lost (they will) then you need to know how to find the information to solve the problems immediately, even if you’re a hundred miles away from your office.
That’s why TruckingOffice Brokerage Software is the ideal software for you as you’re starting your freight brokerage business. TruckingOffice Brokerage keeps your files accessible anywhere you go with a WIFI connection. All important details are stored in a secure system that allows you to access the information you need with just a few keystrokes. After the load is delivered, TruckingOffice Brokerage helps you take take of the accounting – billing the shipper, paying the trucker, and tracking your business accounting the way you need it to be done.
Give TruckingOffice Brokerage software a try today! That free trial is waiting for you right now!
*We are not attorneys, so don’t consider this legal advice.
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