Becoming A Freight Broker
There has probably never been a better time to become a freight broker than now, with the US economy becoming stable and even improving each year, and an increasing need for new brokers in the freight industry. It can be a very rewarding career to be involved in since freight brokers are critical for maintaining the smooth flow of goods all across the country.
It's not much of an exaggeration to say that freight brokers play a major role in keeping the economy itself running smoothly and efficiently in this country and that without them the flow of goods and cargo would come to a screeching halt. To the job satisfaction aspect, you can add the financial rewards of becoming a freight broker, so it's easy to see why this career holds plenty of appeal for people starting on the business.
If you're interested in earning close to $100,000 a year and enjoying the knowledge that you are a critical factor in the smooth operation of our nation's economy, becoming a cargo broker is something you may want to look into. As far as a start-up is concerned, freight broker license cost is low comparable to other industries.
What Is A Freight Broker
Essentially, freight brokers are the middlemen between the businesses which need to have goods and cargo transported, and the carriers who do the actual transporting. There is a considerable efficiency factor added by the broker in connecting these two groups of business people, by ensuring that carriers of goods maximize their loads before actual transportation occurs.
Once the shipping process is underway, freight brokers also add value by tracking the progress of the carrier and maintaining detailed records of pickups and drop-offs, as well as other information relative to the whole process. Since freight brokers are required to be well-schooled in all shipping regulations throughout the country, they also serve as legal overseers of all shipping procedures.
Every step of the shipping process occurs under the overall supervision of the broker, ensuring that shipments successfully reach their intended destinations. A great deal of responsibility is assumed by the freight forwarder, and that's why the job is typically so financially rewarding.
How To Get A Freight Broker's License
The steps necessary for obtaining a license vary from state to state, but the general process is the same for the most part. The first step necessary is to acquire the knowledge and training necessary to become a broker, for which classes are offered by various agencies within the state, as well as online.
Next, it will be necessary to apply for a license with the Federal Motor Carrier Safety Administration (FMCSA). For this, you can download forms from the agency website, and after you've filled out those forms, the agency will issue a Motor Carrier number which is necessary to continue the process. It will then be necessary to acquire a freight broker bond, the amount of which also varies from state to state.
If you're going into business independently, you'll have to pay this amount yourself, but if you are going to be employed by a company, that company may pay the cost of the bond for you. Then you'll have to file a BMC-84 form to complete the process, after which you will have to wait for a period of a month or more before receiving your FMCSA authority certificate. Another good resource that we recommend is the American Trucking Association.
Freight Broker License Cost
The cost of obtaining a license itself will be around $750, although this will not be the only cost you incur during the entire process of starting up your business. It will also cost you somewhere between $1,000 and $9000 annually to obtain a BMC-84 bond and probably between $1,000 and $5,000 or more in office equipment.
Each month you'll also have to pay for a high-speed Internet connection, phone lines, and utility bills. You will most likely need to use special software offered by TurboTax or Microsoft Office Suite to keep your company books organized, and to keep you prepared for each tax season. If you have any employees working for you, they will need licenses as well.
Finally, you'll need a broker authority license which you'll have to obtain from the FMCSA before you actually go into business. This certifies that you are qualified as a broker, and are legally authorized to move cargo from place to place in your area of interest. This FMCSA license will cost you $300 - then you're ready to go to work. Freight broker license cost is relatively low compared to other industries.
