Truck brokering is an important part of freight-hauling you can explore today.
To explain this in a single sentence, it involves negotiations between trucking companies and other freight haulage services. The aim here is to maximize profitability. A truck broker is also known as a freight broker.
Now, this practice has been around for a long time and has become a vital part of the freight services industry. It has resulted in the birth of major truck brokerage businesses. Some of the big names include Yusen Logistics, J.B. Hunt Integrated Logistics, Worldwide Express, Mode Transportation, and Landstar System.
Others include Coyote Logistics, Swift Transportation, Schneider Transportation, Werner Enterprises, and Prime among others. It’s important to fully understand what truck or freight brokering entails to help you focus on making a career out of it.
What Does Truck Brokering Entail?
As a truck or freight broker, you bear the responsibility of assisting or connecting shippers with freight to qualified carriers or trucks to haul goods to their destinations. Being a freight broker is an important responsibility without which the shipping industry will be unable to function smoothly.
Not only do freight brokers connect shippers to available carriers, but they also track the load being hauled until it reaches its final destination. This lifts the burden off the shoulders of shippers as they (shippers) don’t have the time or experience to keep track of goods being hauled or trucked away.
Starting A Truck Brokerage Business
In a bid to become a freight broker, it is necessary to follow the steps required to commence your journey. A thorough understanding of the process is important as qualification depends on it. The following are steps to follow;
Gain Industry Experience
Industry experience is critical to achieving your goal of becoming a freight broker. As an industry player, you understand the complexities involved as well as how to overcome difficult challenges.
Some of the most important skills you’ll get include communication and people skills.
You’ll be dealing with lots of people as a freight broker. So, having experience is an important part of the process of starting this business.
Freight Broker Training
Training is highly essential to becoming a freight broker. This, coupled with experience places you at an advantage.
Part of the training process involves the use of necessary tools such as books. One of the most important things to know is to know the top freight broker training schools.
Our reference list of some of the best schools includes online courses BrokerU, Freight Broker Bootcamp, Rapid Authority, Atex Freight Broker Training, Freight Broker Agent School, Taltoa Freight Broker Training, Freight Broker Trainer and Logistics Academy among others.
The time required to become a fully qualified freight broker will range from a few weeks to about a month. This includes hands-on training with reputable freight broker businesses. Having prior experience is a major advantage.
Setting Up a Truck Brokerage Company
To set up a freight brokerage business, you’ll need to put in place the structures necessary for its smooth operation. There are lots of things to consider.
This section highlights some of the most vital things you should put in place to commence smooth operations.
Choosing A Company Name
This is the identity of the business. In choosing a name, you’ll need to be careful not to pick up a name already in use.
One way to avoid this is by checking for name availability after selecting the one you consider appropriate. One place to perform such a check in the U.S. Patent and Trademark Office.
Before performing such a search, you should have at least three names.
This is necessary because there’s the likelihood to find your most preferred name taken by existing businesses. A name search helps you avoid duplication. There’s a database of all registered names available online as well with the U.S Patent and Trademark Office.
Write A Business Plan
Your entire business operations should be guided by a plan. Now, a freight brokerage business plan, apart from serving as a blueprint and providing focus can be used in sourcing for funding or credit lines.
Using such a plan, you can set timelines for achieving specific growth objectives. It also clarifies your strategies for attaining success with your truck brokerage business.
Choosing Your Business Entity
What type of entity do you wish to choose for your business? This is an important decision to make. Now, there are different types of legal entities. The most common include the sole proprietorship, limited liability company (LLC), partnerships, and corporations.
Each type of entity gives certain advantages. You’ll need to know all of the advantages conferred by each type to benefit maximally.
No shipment or freight carrier company will want to do business with an unlicensed broker. You’ll also be operating illegally without one.
The federal agency saddled with issuing licenses to freight brokers is the Federal Motor Carrier Safety Administration. This license is also referred to as the Motor Carrier Operating Authority.
Connecting With The Right Carriers
Finding the right carriers, although quite challenging can be the difference between a successful freight brokerage company and one which is struggling. In other words, the success of your business will depend on finding the right carriers.
Depending on your niche area, certain carriers will best fit your needs. This is because there are different shipment or cargo categories that are best served using corresponding niche-specific carriers. An effective way to connect with such carriers is by searching on shipment directories as well as inquiring from other freight brokers.
Obtain A Freight Broker Bond
The freight broker bond serves as a guarantee to follow all rules and regulations in brokerage. This comes at $75,000. However, you won’t have to pay the entire bond amount. Rather, a percentage of it is required. The percentage you pay will depend on your credit rating.
The higher your credit score, the lesser premium you’ll have to pay.
Truck brokering is a lucrative profession you can become part of. Lots of qualified brokers have established successful businesses following the steps outlined in this article. You only need to ensure all the requirements are fully in place.
Also, different states might have slightly different requirements or regulations. You’ll need to find out what applies in your state.