General Business: |
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| What is a Freight Broker? |
A freight broker is legally a "property broker", which is the term established by the Federal Motor Carrier Safety Administration (FMCSA), a division of the United States Department of Transportation. It describes licensed individuals, or corporations, that help make a shipper and an authorized motor carrier successful in the transporting of freight. |
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| What are the requirements to be a Freight Broker? |
There are three legal documents needed to operate as a freight broker. They are:
- A Broker's Authority - through the FMCSA - $300 fee. You fill out Form OP-1 and file for your authority to operate as a broker
- Surety Bond or Trust Fund - obtained from a bank or bonding company. The cost varies depending on your personal credit. You are required to carry a $10,000 bond or trust, but if your credit is good, some companies will put up your bond for you for a fee (normally $500 to $700 per year). The form filed to obtain this is BMC-84 or BMC-85
- Processing Agent - This runs approximately $50, with form BOC-3
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| Is this a growing field? Is it in demand? |
As of this writing, there are approximately 15,000 licensed transportation brokers in the nation, but a large number are inactive. This is still a relatively new industry, as there were only around 70 brokers in 1970. It is estimated that freight brokers accounted for over 10% of the shipping industry, or roughly $40 billion out of $400 billion, in revenues. A recent article in the Wall Street Journal cited freight brokerage and logistics as the fastest growing sector of the transportation industry. |
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| Are at are the downsides to opening your own Brokerage? |
Yes, there are risks and obstacles to opening any business. Opening a Brokerage has its own set of challenges such as cash flow concerns, shippers and brokers who are looking to take advantage of new brokers, and carriers who will not work with a new broker to name a few. |
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| How long will it take for my business to become profitable? |
As of this writing, there are approximately 15,000 licensed transportation brokers in the nation, but a large number are inactive. This is still a relatively new industry, as there were only around 70 brokers in 1970. It is estimated that freight brokers accounted for over 10% of the shipping industry, or roughly $40 billion out of $400 billion, in revenues. A recent article in the Wall Street Journal cited freight brokerage and logistics as the fastest growing sector of the transportation industry. |
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Operations: |
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| What are my hours of operation going to be? |
Usually our Agents work a normal work day. The most important thing is to service your customers. Customers want to know you are there for them. If they call and can't get you on the phone, they will go to somewhere else to move their freight. |
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| How should I allocate my time? |
At the beginning it is important to be on the phones, making your calls. As you develop a shipper base, the phone time will decrease and the time you spend tracking loads will increase
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| Do I need an office? |
Yes. All Agents need a separate office to work out of. However, Agents can work from home and do not need to rent outside office space. |
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| What are the most proven methods to keep shippers happy? |
Serve your customers and provide a great service at a great price - it's that simple. Make sure your trucks are clean and on time. If they are going to be late, call the shipper and let them know. Honesty is always the best policy. |
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| Are health benefits available? |
Not at this time, but they will be shortly. |
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