Freight Brokerage: Exactly The Right Business To Get Into It

Thankfully to the transport we can buy anything that we need no matter where it’s manufactured. Transportation industry is about 8% of US GDP. With these numbers, freight brokerage is the smart choice for job position because there is plenty of space for this business to grow. This is why freight brokerage is good business.

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What is freight broker, company and service

Freight broker is the link or middle man between the shipper and authorized motor carrier, also known as a third party transportation provider.

Source: www.support-eam.org

Freight brokers are in the category of transportation intermediary. They neither can be classified as a shipper or as an asset owning carrier, but they still have a role in the transportation of goods and they are deeply involved in the transportation business.

Тhese guys have a great knowledge of the transportation business and they are using that expertise to:

  • Negotiate good shipping rates
  • Provide fast delivery
  • Get better service from the transportation companies/carriers

They provide and connect this service to the shipper who needs transportation cargo, in other words, they arrange and move shipments for shippers.

Important for them is to find the best service to the shipper because great performed service entails long term clients and big amount of provided loads entail discounts or other privileges from the carrier.

You need to be an expert in shipping regulations because you need to:

  • Keep detailed records of pickups and deliveries
  • Supervise the legal part of the transportation

As a broker you have to follow each step of the transportation process to make sure that the freight will arrive safely to its final destination.

Both parties have to be satisfied, it is the best way to achieve good earnings and ensure a stable future in this business. Be a great broker use your resources to help both the shipper and carrier.

How to start this business?

Make research of the industries and pick something you are familiar with or you have experience. The best way to start is to start from a familiar point, the time that you will need to make preparation and plan will be shorter than the point where you need to learn from scratch.

How to choose Your Niche? It is always better to choose specific market, choose a field that you have a passion for or you have previous experience, in that way you will be more energetic in the conversations with the potential clients and that will affect on your final result.

Freight brokerage 2

Use the advantages of modern technology. Do I need freight broker software? To be more efficient in your tasks, in this modern age, you don’t have to do everything by hand or anything if a may say so, we have modern devices that can remember for us, that can remind us or even to do difficult calculations for us.

Those tech solutions will make you capable to manage:

  1. Multiple transit shipments
  2. To produce various customizable reports
  3. To keep regular trucking loads separated
  4. Organizing shipper and carrier histories
  5. Or tracking customer satisfaction

Top 5 softwares for freight brokerage:

  1. BrokerWare by 3PL Systems
  2. ITS Dispatch by Internet Truckstop
  3. Strategy Live
  4. PowerBroker by McLeod Software
  5. Load Pilot

Be Proactive don’t wait for business opportunity to hit you in your face to start working, be a shark, go out there and make contacts with the shippers and carriers, talk with them and don’t wait too long to call you back.

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Hey! I'm George J.Magoci and I will send you a FREE eBook where you can learn 12 secret steps how to make $950 more truck/month.

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Remember, you are the main force for your success, you have to make your move again and contact them again, be in touch with them, make friends with and offer a help or make positive suggestions, show them that you are a tough person who is ready to take care of their business.

Use social networks – stay on top of industry news to be in touch with the updates and new opportunities use Linkedin, Facebook, Twitter. Also get in touch with the new customers writing blogs on your website.

Freight brokerage 3

Walk into your customer’s shoes and feel their fears and concerns, step up with the friendly advice and earn their trust

Be curious for the new things, you may never know what will save your business. Try to learn more of everything that will open up a new perspective to the world and will give you new ideas for progress

Legal issues in freight brokerage

You have to know the legal issues if you are operating as a freight broker, there are four legal documents that are required by FMCSA:

1. Broker’s Authority, available through the FMCSA for a $300 fee (non-refundable) charged during the application process

  • fill out the OP-1 form
  • file for your authority to operate as a broker

Freight brokerage 4-1Source: www.reoadvisors.com

2. One of the requirements for freight brokers to operate legally is to have a freight broker bond, which you can obtain from a bank or bonding company;

  • you’re required to carry a $75,000 bond or trust (proof of insurance coverage). The form filed with this is BMC-84 or BMC-85

In 2013 freight broker bond increase, It jumped from $10, 000 to $75,000 and with this legal force many of the nation freight brokers were forced into bankruptcy, they simply couldn’t meet the new requirements.

3. File a Unified Carrier Registration (UCR)

4. Processing Agent, which runs approximately $50, with form BOC-3

  • Designate a process agent  in each state in which you will do business. These agents will receive documents in a legal proceeding brought against a broker or carrier. You can designate an agent by submitting a BOC-3 form (brokers may designate themselves as their own process agents in the State in which they are writing contracts) to the Federal Motor Carrier Safety Administration.
  • Application processing time: Approximately 4-6 weeks

Additional advice:

Business bank loan – be in a financial secure position to cover 2-4 operating months, be sure that you have enough funds to cover the cost for the carrier services in case your clients don’t pay you in time.

LEARN 12 SECRET STEPS HOW TO MAKE $950 MORE PER TRUCK / MONTH

Hey! I'm George J.Magoci and I will send you a FREE eBook where you can learn 12 secret steps how to make $950 more truck/month.

Free ebook

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