Freight brokers work as sort of middlemen or liaisons, connecting people and companies with goods to ship with carriers willing to ship their freight. Freight brokers do not physically touch or take possession of the freight in any way. Instead, the extent of their involvement is matching shippers with freight carriers. The process involved with becoming a freight broker is pretty straightforward, but it can also be somewhat costly.
A person who wants to become a freight broker in the United States should go through the Federal Motor Carrier Safety Administration (FMCSA). The FMCSA is a division of the U.S. Department of Transportation and is the authority responsible for licensing freight brokers. To become a freight broker, a person has to obtain a Broker's Authority from the FMCSA for a fee of $300 US Dollars (USD). In addition to paying the fee, a person who wants to become a freight broker will have to fill out Form OP-1 in order to receive the Broker's Authority.
In order to become a freight broker, a person has to obtain a $10,000 USD surety bond or trust fund. These financial instruments are intended to guarantee that the broker will meet his obligations as they pertain to his business. In the event that he fails to do so, these instruments provide a way for those who've had business dealings with him to recoup any losses they may have suffered. Surety bonds and trusts can be obtained from banks and bonding companies. It is possible to have a company provide a bond for under $1000 USD, but this typically requires good credit.
Once a person has completed the first steps necessary to become a freight broker, he'll need to select a processing agent in the state in which he plans to operate his business. This agent is needed in case legal action arises. Form BOC-3 is required for choosing an agent, and the fee is $50 USD.
Some people take freight broker training courses to learn what it takes to become a freight broker and develop skills to use in operating their businesses. This is not a requirement, but it may help a person to get his business off the ground faster and avoid common mistakes. There are both training schools and courses from which to choose, but training doesn't have to be lengthy. There are even some manuals and books available that make learning at home relatively quick and easy.
Some people want to do the work of a freight broker without becoming licensed. They may become freight broker agents, working under the umbrella of a licensed freight broker. This generally requires little more than a computer, fax machine, and phone to get started. Typically, the freight broker will provide the agent with requirements for getting started as well as access to the freight broker's software system. However, the agent will have to share the profits from his efforts with the broker.
