Choosing the Right Freight Broker

Q: What are the legal requirements to operate as a Freight Broker?

You must submit your Freight Broker Registration application to the Federal Motor Carrier Safety Administration (FMCSA) through their Unified Registration System. Upon receiving your pending US DOT number you’ll also need to meet the additional requirements of proof of financial responsibility by posting a $75,000 Surety Bond or $75,000 trust fund, filing your BOC-3, and filing a yearly Unified Carrier Registration.

Q: What's the difference in being a Freight Broker and Freight Broker Agent?

The first one works on his own, runs his company. The second one is an employee of a brokerage company and gets a commission percentage of the brokerage fee.

Q: Can I work at home?

You not just 'can' but you 'must' work at home at the beginning in order to save money, keep your expenses low while you grow and develop your business.

Q: What is a Freight Broker (Property Broker)?

Property Broker is the correct terminology for many names used in the business to identify what we do. Truck Broker, Freight Broker, Load Broker, Freight Agent, Transportation Broker or simply Broker or Agent are all interchangeable terms synonymous with ‘Property Broker’. An active FMCSA registration to operate as a Property Broker allows a third-party to arrange pick-up and delivery of a Shipper's product by a Carrier without ever having physical control of the shipment.

Q: Does a Freight Broker need a broker’s license specific to their state or in each state?

Freight Brokers are regulated by the Federal Motor Carrier Safety Administration (FMCSA). The Freight Broker registration with the FMCSA allows us to make arrangement for the transportation of freight anywhere within the United States. So, no, you will not need a separate freight broker’s license for each state.

Q: How much does it cost to apply for your Freight Broker Registration / US DOT # with the FMCSA?

The FMCSA charges $300.00 to apply for a registration with an operating status of a motor property carrier, motor passenger carrier, freight forwarder or freight broker. The FMCSA does require all new applicants to complete their registration application online through their Unified Registration system. No new applications by mail. If you’d like, a Freight Broker Training filing specialists will file for your Freight Broker Registration on your behalf with the FMCSA for $450.00 (includes the $300.00 fee charged by the FMCSA). Plus, our course graduates are eligible for one Freight Broker Registration filing service included in their course cost ($150 value, filing service does not include the $300.00 fee charged by the FMCSA).

Q: What is a BOC-3 and how much does one cost?

A BOC-3 form is provided by a process agent. It’s a blanket form of coverage that designates a representative in each individual state upon whom court papers may be served in any proceeding brought against a motor carrier, broker or freight forwarder. A BOC-3 form and filing is usually priced between $25 to $150, depending on the process agent providing the form.

Q: What is the difference in being a Freight Broker or a Freight Broker Agent?

A broker is the owner of his or her own company. They are required to meet all legal requirements (FMCSA Registration, Bond/Trust Fund, BOC-3) to operate as a broker. An agent works under the umbrella of the registered broker and typically receives a commission percentage of the brokerage fee.

Q: Is Freight Broker training school required?

Currently the answer is “Not yet”. Soon, the FMCSA will be establishing new rules requiring brokers to show proof of knowledge or have relevant experience. However, whether training is required by law or not, the reality is that the failure rate for those who attempt this business without freight broker training is high. In order for a broker to be successful in any industry (stock broker, real estate broker, etc.), formal training is a must. Freight Mover School will prepare you to perform broker duties in a profitable, ethical manner, giving you the tools needed to be successful in the field.

Q: Should a Freight Broker school be affiliated with a freight brokerage?

Yes! And the instructors should be actively engaged in brokering freight. How can an instructor teach something they don’t do themselves? When a school tells you they are affiliated with a brokerage ask for the brokerage name and US DOT # or MC # so you can check their FMCSA registration or authority and make sure it is current.

A freight broker is a person whose services are used by shippers to manage their transportation needs. To ensure that the workflow goes properly, you need to hire the best and right freight broker. But how can you choose the best one? After all, this profession is really popular in the market.

First and foremost, a good freight broker is someone who does their job responsibly, fulfilling their duties with care and reliability. Such a person should be conscientious and experienced. After all, you are giving part of your business to a freight broker, and they influence your company and its success.

So, an important factor to consider when choosing a freight broker is their license from the Federal Motor Carrier Safety Administration (FMCSA). This is a legal requirement, and you can`t go against it. Anyone who organizes transportation for compensation must have this license. In addition, you will be more comfortable and it will be easier for you to entrust your business to someone who has the license, as its presence indicates that the person has been trained well and meets all the strict criteria.

This point also includes the presence of various certificates. For example, there are third-party recognitions that prove that the broker adheres to high ethical standards. This will protect you from fraud, so never hesitate to ask brokers to show these papers. It will be enough if the broker is certified in one of such programs as: TIA Certified Transport Broker Program, NASTC Best Broker Program, Truckstop.com Diamond Broker Program. Also, clarify with a broker how they can help you with cargo insurance, for example, it would be good if the broker offered to help you with the paperwork.

The next step in ensuring that you have found the right freight broker is to pay attention to the types of transportation and other services that they offer. First, determine what you specifically need for your type of business. Perhaps the broker offers more than truckload motor carriers. If they offer intermodal transportation, air transportation, international ocean freight, rail, and others, then this indicates greater expertise in the field. This fact will affect the speed and quality of their work. That is why it is important to find out in which areas brokers work. Moreover, it may happen that they don’t specialize in your certain industry and market. But experience is crucial, as then it will be easier for a freight broker to handle your business and help solve industry-specific problems.

Finally, an important part of a broker’s job is freight tracking. Find out how advanced they are in their operations and what technologies they use. Perhaps the freight broker has special tracking systems and software that simplify and make the work more efficient and reliable.

We have provided you with the main factors to consider when choosing the right freight broker. However, you can also rely on your gut instinct and intuition. But be careful, each broker must have important licenses and certificates. This indicates their professionalism and your safety.