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.

Starting out? Here is why a new freight brokerage needs software to stay organized.

Before you decide, compare the two roles: see freight broker vs dispatcher for who pays each one and what authority you actually need.

Before you make the jump, it helps to have your own direct freight in hand. See how to find shippers for your trucking company without a load board — that is exactly how one of our founders outgrew his fleet.

For the bigger picture on why carriers make this move, read how owner-operators expand a trucking revenue stream with freight brokering.

New to federal authority? Start with our guide to what an MC number is and how to get one before you file for brokerage authority.

What Is Motor Carrier Authority?

Motor carrier authority is the operating authority that lets a trucking company haul freight for pay across state lines. Many owner operators have their own motor carrier authority. (It’s often called “trucking authority.”) It assures the shipper that the company has purchased insurance and meets all the government’s regulations.

What Is Brokerage Authority?

Brokerage authority is the registration that lets a company arrange the shipment of freight instead of hauling it. 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.

Can a Motor Carrier Add Brokerage Authority?

Yes — a motor carrier can add brokerage authority, and it is no harder to get than trucking authority. 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 trucking software, then TruckingOffice Brokerage software will be a pleasant surprise. 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.

Frequently Asked Questions About Brokerage Authority

What is brokerage authority?

Brokerage authority is the registration that lets a company arrange the shipment of freight rather than haul it. A broker who holds brokerage authority has met the government’s requirements to arrange the shipment of goods, carries adequate insurance, and is registered with the state. Those requirements exist to protect the owners of the freight.

Can a motor carrier get brokerage authority too?

Yes. 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. For small fleets and owner operators running more than one rig, it diversifies the company’s revenue stream when money is tight and buying more equipment is not an option.

Is brokerage authority harder to get than trucking authority?

No. Getting a brokerage authority is not harder than getting a trucking authority, and the application process includes the same documents. A trucking company that already carries the required bond and insurance can likely get its brokerage insurance from the same company.

What is the difference between a motor carrier and a freight broker?

A motor carrier holds authority to take a shipment for pay across state lines and physically hauls the load. A freight broker holds brokerage authority to arrange the shipment instead: a company with freight to ship contacts the broker, and the broker finds an owner operator or fleet to transport the load.

What does a new freight broker need besides authority?

Besides the authority itself, a new broker needs adequate insurance, state registration, and brokerage software. Freight brokerage puts dozens of pieces of information in play at any given moment, so tracking a load from start to finish depends on proven brokerage software rather than free tools or a system kludged together in-house.

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!