When a trucking company wants to expand but money is tight, one solution may be to acquire a brokerage authority. For most small fleets or owner operators who have more than one rig, diversifying your company’s revenue stream with a brokerage authority is an obvious choice.
Motor Carrier Authority
Many owner operators have their own motor carrier authority. (It’s often called “trucking authority.”) It allows them to take a shipment for pay across state lines. It assures the shipper that the company has purchased insurance and meets all the government’s regulations.
Brokerage Authority
A freight broker who holds a brokerage authority is someone who has met the government’s requirements to arrange the shipment of goods. A company who has freight to be shipped will contact a broker to find a shipper – owner operator or fleet – to transport the load. That broker needs to have adequate insurance and register with the state. All of this is to protect the owners of the freight so that a trucker might not steal the goods or hold them for ransom.
Here’s the simple fact: getting a brokerage authority isn’t harder than getting a trucking authority. The application process includes the same documents. If a trucking company already has the required bond and insurance, they can get likely get the brokerage insurance from the same company.
Essentially, adding a brokerage authority to an existing trucking authority is a way to make more money in the same field without the expense of added equipment.
Diversify For More Money
A trucking company is already handling many of the tasks that a broker handles. So adding a brokerage authority makes sense if a trucking company is already
- arranging for a competent trucker to pick up, transport safely, and deliver freight
- managing the paperwork, including BOLs and invoices to the shippers and payments to the shippers.
Diversifying a trucking company to manage brokerage when so many of the steps are the same makes sense.
- It reduces training time to get the staff up to speed.
- It capitalizes on knowing the trucking industry and the best people to handle the loads
- Knowing the ins and outs of the transportation industry will make this revenue stream profitable quickly.
The Necessary Investment
The most important investment a new brokerage company can make is getting the software down as soon as possible. Freight brokerage is a complicated job with dozens of pieces of information in play at any given moment. Trying to track a load from start to finish isn’t a job for a disorganized person. Keeping track of all the data is complicated. That’s why a new broker is smart to not depend on free software or try to kludge something together.
Balance the amount of unpaid time to develop a complete brokerage software package against buying a proven trucking brokerage software. Simple math proves that getting a jump start with basic trucking brokerage software is the smart choice!
If you’re already using TruckingOffice PRO TMS trucking software, then TruckingOffice Brokerage software will be a pleasant surprised. The same easy to learn, easy to use software now works for brokers. At a price that a new broker can afford, we’re here to support the start ups that this industry needs.
Want to give it a try? It’s on us!
We’ll give you a free trial to explore all the features of TruckingOffice Brokerage software. After you get your brokerage authority, sign up for the free trial and you can get on the road with your brokerage business!
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