A freight broker is the one that handles the third party logistics jobs of getting cargo from point A to point B (and all points in between). They never actually touch, nor do they see, the freight. They do however assume responsibility for the shipment and transportation thereof.
They do this by contracting shipping companies to actually transport the cargo. They also must coordinate with warehouses, government inspectors, and the customers on the scheduling and delivery of the freight. Some other the other duties might include preparing spreadsheets and financial reports, filing insurance claims, and setting shipping rates.
To be a freight broker common experience can come from managing trucking, shipping or air transportation or other related logistics jobs. One thing for sure, you do need and have to have a deep familiarity with broker regulations, carrier management and brokerage firm operations. It is very common for brokers to gain the experience and then to branch and start their own company.
Too many people’s surprise there is no actual educational or certification requirements to be a freight broker. Many people have an administrative background; some have worked in the transportation industry, while others received on the job training. If you do wish to gain an educational edge you can take courses at a local college or complete a training program. Places such as the Transportation Intermediaries Association (TIA) offer professional certification as a Certified Transportation Broker (CTB).
With that said freight brokers usually are licensed by one or more regulatory agency. Here are some of the more common ones, the Federal Motor Carrier Safety Administration (FMCSA), the Federal Maritime Commission (FMC) and/or the Transportation Security Administration (TSA). Keep in mind freight brokers are required to carry mandatory liability insurance. This protects both themselves and their customers from theft, accidents, or other such occurrences that can happen during the shipping of freight.
Salaries for a freight broker do vary, but the average seems to be about $44,000 per year (but they do work on commission, as well).
Trucking Company Owner
This one might seem like a no brainer. No matter the company, there must be an owner. Just like there must be all those other people we see buzzing through an organization on any given day.
To be an owner you need to have a few important aspects. But the number one thing you need is capital. Either from a rich uncle/aunt, winning the lottery, bank loans, or trusted partners. Whatever it is from above, you will need to have the right funds to get you going! But before that I hope you did your research!
Now as I said there are few things to consider when it comes to trucking company owner. One of which is ensuring you have the right equipment for your trucking needs. Make sure you have the right trucks and trailers. If you are going to be hauling frozen foods, don’t buy flatbeds. If you are going to be transporting pelleted non-perishables you don’t need reefers.
Also consider your finances and business needs when choosing locations and how to make purchases. You have options, you can buy everything outright, and you can lease, rent, and even sub-contract. So while you are in the planning stages make sure to consider all the pros and cons before making any major purchases.
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It doesn’t matter how great your plan is without customers. You can have the best staff and the best equipment, but if no one knows you exist, your doors will close before your first shipment is delivered. So, finding customers and getting your name out there so they can find you, is essential. Word of mouth, websites, advertisements, social media, and a slew of other resources are available to you, so use them to your full advantage.
Another thing to consider is your pricing. Check out your competition. You don’t want to price yourself too high but you don’t want to lowball yourself either. Be competitive, perhaps as you grow you can adjust your prices (people will pay premium prices is the service is worth it). When you bid a job make sure you took everything into consideration; salaries, equipment, road time, and associated expenses. The job might look good but not be worth it, other times it could be worth the lost if it leads to bigger and better opportunities.
Staffing is another important issue that many business run into. Don’t hire your brother-in-law just because. Surround yourself with people who will really help your business grow. Find qualified knowledgeable people, they are out there! If you find a really special candidate then train them and let them know what is required.
So now after all of this is done, what to consider next? Build your fleet! Using whatever method(s) best fits your needs, get you vehicles and equipment. Get your drivers, and maintenance staff, and everything associated with your fleet.
Now I mentioned customers up above. But here is something to consider, besides focusing on the customer. You need to look at the loads. You need to fill your trucks with the most profitable loads you can find. If you have a sales team and they can spend all day on the phone that is great. But the reality is that it just doesn’t work that way! So what can you do? Scan the load boards; see who has product that needs to be shipped. That is if you have a logistics business in the first place.
In time you will build reports with clients and you will have them calling you. In the meantime that nasty habit of eating and the need to pay bills is there. Keep in mind don’t rely solely on load boards. Building relationships with actual clients will be far more profitable.
Keep in mind that when you start out the freight bill factoring and cash flow will be slow. Many company don’t pay their bills for 60 days, after all they might need to get paid before they can pay you. Sometimes you can work out upfront payments, other times you can get paid on delivery, but that isn’t always the case. So have several options open when drumming up business.
When you are considering the business you do need to keep things in perspective. Acquire what you can actually afford. Hire the staff for your current need, you can always hire more latter. Be aware of the hidden expenses: