Common Mistakes Brokers Make

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.

1. Poor communication with clients and carriers
Communication is critical in the freight brokerage industry. Poor communication can lead to misunderstandings, missed deadlines, and unsatisfied clients. As a broker, you should communicate with your clients and carriers regularly to keep them informed about the status of their shipments. You should also respond promptly to their queries and concerns.
At Freight Broker Training, we provide training on effective communication techniques to help you build and maintain strong relationships with your clients and carriers. Our training programs include modules on phone and email communication, negotiation skills, and conflict resolution.

2. Failure to conduct proper due diligence
Before you work with a carrier or client, it’s essential to conduct proper due diligence to ensure that they are reliable and trustworthy. Failure to do so can result in delayed or lost shipments, damaged goods, and financial losses.

3. Inaccurate pricing
Pricing is a crucial aspect of freight brokerage. Inaccurate pricing can result in lost profits or lost clients. As a broker, you must ensure that your pricing is competitive and reflects the current market rates.
We provide training on how to calculate pricing accurately. Our training covers topics such as rate negotiation, market analysis, and pricing strategies.

4. Failure to follow industry regulations
The freight brokerage industry is highly regulated, and brokers must adhere to federal and state regulations. Failure to comply with these regulations can result in hefty fines and legal action.
At Freight Broker Training, we provide training on industry regulations and compliance. Our training covers topics such as the Federal Motor Carrier Safety Administration (FMCSA) regulations, insurance requirements, and contract law.

5. Overpromising and under delivering
In an effort to win business, some freight brokers may overpromise on the services they can provide or the timelines they can meet. This can result in disappointed clients and damaged relationships.
We know how to teach you how to set realistic expectations with your clients and carriers. Our training covers topics such as service level agreements, delivery timelines, and contingency planning.

6. Lack of organization
Freight brokerage can be a complex and fast-paced industry. As a broker, it’s essential to be organized and keep track of multiple shipments, clients, and carriers. Failure to do so can result in lost shipments, missed deadlines, and errors. Our training covers topics such as load tracking software, time management, and prioritization.

7. Inadequate risk management
The freight brokerage industry involves a certain amount of risk, such as liability for damaged goods, payment disputes, and carrier accidents. As a broker, it’s essential to have proper risk management strategies in place to minimize these risks.

In conclusion, being a successful freight broker requires knowledge, skills, and attention to detail. At Freight Broker Training, we offer comprehensive training programs that can help you avoid common mistakes and build a successful career in the industry. Contact us today to learn more about our training programs and how we can help you achieve your goals.