The Benefits of Becoming a Freight Broker

Freight Broking

The Benefits of Becoming a Freight Broker

A career in freight broking is a ticket to freedom for those looking to find the perfect career. Not only does the job offer high-earning potential, but there is a low barrier of entry to join and schedule flexibility. The trucking industry employs over 3.2 million people and is growing every year, which means there is no shortage of jobs in the near or long-term future. In the following article, we dive into everything you need to know about the benefits of freight broking. If you are looking to fund your trucking business, consider Outsource Financial Services for factoring and lending. Please contact us today to learn more about how we help small businesses. 

What Do Freight Brokers Do?

A freight broker license is required by law for anyone who arranges cargo transportation between two or more locations. Freight brokers are a vital part of the U.S. economy because they fill a gap in the supply chain by connecting suppliers with trucking companies. For example, let’s say a farm producing lemons needs to ship to a local grocery store. If the supplier doesn’t own a truck, then they will need to hire one. To accomplish this, they will require a middle man to act as a conduit between the shipper and carrier (trucking company). Freight brokers act as this intermediary by finding a suitable carrier, negotiating a contract with the carrier, and ensuring that the shipment is routed to its destination as planned. They also factor any restrictions on weight, size, or other considerations that might affect the cost of shipping. 

How To Become a Freight Broker? 

To become a freight broker, your will need to register with Customs and Border Protection before engaging in any commercial activity. Broker licenses are issued at the state level, and every state has its own requirements. The license has to be renewed annually and can cost anywhere from $100 to $2500. There are effectively four main steps to getting your freight brokers license, as detailed below. 

Apply for Broker Authority  

Applying for Broker Authority means stipulating what you plan to broker and applying a Form OP-1 to the FMCSA. You need to receive your “motor carrier” number, which will be used in the next steps in the process.

Obtain a Surety Bond 

A surety bond is a pre-determined agreement between the business and a bonding company that provides protection. A bond essentially ensures that the contract has been fulfilled and verified by an impartial third party. Most freight brokers need a bond of $75,000, but you can work with a surety company to issue this bond while only paying a small fraction. 

Find a Process Agent 

A process agent is a person or company representative of your freight broker or trucking company upon whom legal papers may be served on your behalf. They are easy to find, and you will need them to ensure that contracts are suitable for the state you are working in. 

Register with USR

All FMCSA applicants need to register with the Unified Registration System as the final step in acquiring their freight broker license. Upon acceptance, you are officially registered with a license. 

What Is The Average Freight Broker Salary

The average freight broker’s salary in the United States is currently $62,000. However, earnings vary widely, and freight brokers can make as much as seven figures per year. There is also a tremendous need for bilingual freight brokers, which can pay more. 

Freight Broker Training Online

Online training is the method of choice for freight broker training. A good broker course can help speed up the overall process and make sure you are prepared to take the wheel right from the get-go. Here is a helpful article on the top freight broking schools

Conclusion

Obtaining a freight broking license is an ideal way to get out of the 9-5 grind and do business all over the country. In terms of professional licenses and accreditations in the USA, it is easier to obtain. Thus, this is a more logical choice for those looking for both freedom and high-earning potential. If you are to help fund your trucking business, please contact us at Outsource Financial Services. We are proud to support the trucking industry and help small businesses grow.