Tips For Launching A Freight Transportation Brokerage

12 December 2018
 Categories: , Blog


The trucking industry is a high-demand, active industry. Being as important as it is to the country, a lot of people look to launch careers in trucking for the security and the reward of contributing to such an important industry. If you aren't one for driving a truck, or you're not comfortable getting your commercial driver's license, you may find that you are better off working in freight brokerage instead. Before you make any decisions, here's what you need to know.

Get Some Industry Experience

In order to be an effective freight transportation broker, you need to have some solid understanding of the industry. There are a lot of logistical decisions that go into assigning each load and determining the best driver and sequential route. However, you can't practically and accurately make those decisions without some firsthand knowledge of how everything truly works behind the scenes.

If you have been a driver in the past, you may think that you understand how it works. After all, as a driver, you work closely with dispatchers and brokers to obtain your load assignments and complete them. However, working on that end of the process doesn't give you insight into the steps that are required for assigning those loads and managing deadlines.

Working with a carrier, broker, or shipper will give you insight into the planning and assignment stages. Spending some time, a year or so perhaps, working with a company like this can give you the experience and connections you might need to successfully launch your brokerage.

Do The Paperwork

Once you have the experience to understand the backend process of the industry, it's time to start getting things in order to start your own brokerage. Transportation brokers must pass a registration process with the Federal Highway Administration first. Once that application is complete, you will need to secure a bond that shows your company's financial responsibility in the event of a problem. The FHWA will tell you how much the surety bond must be for, or you can establish a trust in the amount if you have the cash available to do so.

After the application process and bond assignment are complete, you will need to appoint legal contacts. These contacts will be the ones responsible for handling any and all legal communications, including tax-related information, legal liability claims, and any court proceedings. Once this is done, you will obtain your federal license. You'll also have to obtain licensing and permits from your local government if it's required in the state where you are registering.

Obtain A Finance Line

Since there are regulations and expectations associated with the billing and account resolution in the shipping industry, you'll need a line of finance. You'll have to pay your carriers within a clearly defined time frame, and you may not receive payment from the shipper in time for this. That means having a bank that can finance your operations with a line of credit so that you can front those payments before you receive your revenue from the shipping company.

This means establishing solid credit with a financial institution. Shop around with a few companies or banks until you find the one that can work with you under terms that meet your financial requirements. You may even find it helpful to work with an accounting professional to ensure that your records are properly maintained, timely, and legally sound.

Recruit Carriers

Many owner-operators prefer to work with brokers because it allows them freedom over their business. They can pick and choose the loads that they want to take, but with many owner-operators on your provider list, you'll be able to find someone to take most any load you obtain. You can even work with some of the local truck stops to get contracts for advertising your available loads in the driver rest areas to help you recruit and assign more loads.

For more information, get in touch with a transportation brokerage company.


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