LTL freight broker definition

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.

Delivery of goods is a complex and time-consuming process. It is easier when a company hires transport to send a large batch of goods. It does not take very long to load and send it. But not even big companies can always send a large amount of cargo. In such cases, logistics companies form LTL (less-than-load) cargoes. Delivery of such goods causes many difficulties. Such work can be done only by qualified LTL freight brokers.

What is a consolidated cargo

If the company’s cargo is not enough to fill the vehicle, the logistics company will not undertake to deliver it without the full cost. The customer will have to pay for a full trawl or wait until the transport is filled with passing cargo. The sender is not satisfied with both options:

In the first case, he will have to pay partially for the air.
In the second case, the sender will have to wait for delivery indefinitely.

Of the two evils, the customer is more likely to choose the second, because he will not want to pay extra money. It is more profitable for him to wait: the delivery of small consignments will be paid by other participants in the consolidated cargo.

Advantages and disadvantages

Groupage transportation is beneficial to several categories of customers:

start-up retail enterprises send small batches to determine the demand for groups of goods;
medium-sized businesses optimize working capital;
large enterprises offer product samples in order to find new markets.

Prefabricated goods must not include products with a limited guarantee of safety, metal and fragile items, clothing and liquids.

Paperwork and customs procedures greatly complicate the work on the delivery of groupage cargoes. Only an experienced specialist can cope. For this reason, finding a qualified LTL freight broker is not an easy task.

How to choose a LTL freight broker

A logistic specialist for the delivery of consolidated cargo is chosen according to several criteria. Here are the main ones:

cost of logistics services;
willingness to notify the client about the location of the cargo;
reliability in terms of fulfilling obligations;
the ability to transport goods safely in a short time.

Stages of transportation

In fact, the process of delivery of assembly and general cargoes differ little. There are differences at the beginning and the end of the journey. The delivery process includes:

Taking orders to form the cargo.
Consolidation of goods in the warehouse. It is not profitable for the manufacturer to pay transportation costs if they are not included in the price of the goods.
Packing, marking and scanning of goods in the warehouse.
Distribution of parties by directions.
Route selection.
Preparation of accompanying documents.
Customs procedures.

The final point is the delivery of the goods to the place of temporary storage or to the consignee. There are options here. The cargo owner can:

unload the goods in a temporary storage warehouse;
pick up the cargo immediately after passing the customs inspection;
take the cargo from the warehouse.

Registration of cargo at customs

This procedure of inspecting of assembly cargo is particularly difficult. Declarations must be issued to all consignees separately. The customs are not satisfied with the general descriptions of the goods. Errors in the documents can lead to a delay in the goods or a fine. That’s why a qualified LTL freight broker is very important.