Freight Forwarding For Beginners 1
by Aether in

Last Updated on September 22, 2018 by Aether

There’s never been a better time to consider starting your own freight brokering business. With the economy improving every year, as well as being a little more stable, the demand for new freight forwarders has steadily been increasing over the last couple of years.

Before you commit to taking the initial steps towards starting your own business, it’s a good idea to relook over the role of a freight broker. A lot of people get drawn in by the fact that it’s possible to earn upwards of $100,000, without looking at the finer details.

What is a freight broker, or freight forwarder, and what do they do?

Essentially, freight brokers, or freight forwarders, are those who fill in the gap between shippers, and carriers. Their day to day lives involves negotiating the price of shipping rates and deliveries, to maximize the carrier’s load.

The records that are kept by these brokers are invaluable. Brokers are responsible for tracking freights, as well as having detailed accounts of the pickups and deliveries.

Essentially, brokers are the ones who make sure that every aspect of the transportation process is accomplished in a legal and timely manner. To become a freight broker is to take responsibility for a major part of the trucking and transportation procedure.

How to become a freight broker

The most important thing in the brokering field is knowledge and experience. These are two things that will come with time, and there are certainly no shortcuts. However, a strong will and the ability to learn will get you there in no time.

People and communication skills are vital also, as you’ll be solely responsible for handling and closing deals. While a lot of these will be emails, being able to sound confident and professional over the phone will help you in the long run.

Taking some freight broker training is unquestionably advisable, especially if you have no previous experience with anything to do with shipping and transportation. Although there are a few books available, the best course of action is attend a certified course. These courses will let you speak to professionals in the field, as well as getting preliminary experience that others who are thinking about starting up their own business will not have access to if they don’t do a course. Some courses will naturally have certification qualifications at completion, which again can help you either gain trust in the industry or help you secure a job.

Create a business plan

Just like starting any business, it’s imperative that you create a business plan before you start. If you create a well laid out plan, you’ll be able to take it to banks and use it to gain credit, if needed. Creating a plan is also a good way to outline which niche you’d like to specialize in, as well as who your potential customers may be.

The more time you spend planning, the better, and it may help in making sure that you don’t overlook anything important.

Register your business

Before you’re allowed to legally operate as a brokerage, you must register your company. Make sure to check that the name you wish to use isn’t already registered at the Patent and Trademark office. Once you’ve selected something suitable and confirmed it isn’t taken, you can then continue by registering it at your local business department.

Getting your broker authority

Everything so far has been just general business planning; it’s now time to start looking at the broker-specific business requirements.

Before you can start operating, you’ll need to get your freight broker license from the Federal Motor Carrier Safety Administration. After you get your USDOT number, you can start the registration process for your FMCSA. You’ll have to pay a fee of $300 to have your application processed and it can take up to six weeks to be completed. After this has been returned to you, you’ll have your FMCSA, or MC, number. You will be granted authority ten days after you receive this in the mail.

Getting your freight broker bond

To obtain authority from the FMCSA, you’ll need a freight broker bond. The purpose of this bond is to make sure that you will follow all the regulations and rules, while operating as a brokerage. This acts as an additional line of credit, and due to the risks involved, your personal and business finances will be looked at in detail.

Depending on your credit, you’ll be expected to pay somewhere in between $900 and $4000 to obtain this bond. The main way to lower this cost is to increase your credit score.

The purpose of the freight broker bond is to guarantee that you will follow all applicable rules and regulations in your brokering. In this sense, the bond is an additional line of credit for your business. Because of the risk involved in providing you with this, when you apply for a bond, the surety needs to take a close and hard look at your personal and business finances, as well as your credit score and the overall stability of your business.

Contingent cargo insurance

As soon as you obtain your MC number, you’ll be able to get the necessary insurances. Form BMC-34 is the minimum for loss and damages, but there are others that cover injury and property damage. You’ll need these insurances as most professional shipping companies will not do business with you if you don’t have them.

Choosing your agents for service of process

After you’ve obtained your bond, and have the required insurances, it’s now time to designate your agents for service of process, for every state that you intend to work in. They will deal with your paperwork in that specific state on your behalf, without you needed to be present.

Marketing your business

You’ve done the hard bit; now it’s time to be seen. Every form of media should be considered, but it’s up to you to decide which method you think will impress your future business partners more. A well-designed website or social media profiles, or printed marketing materials?

Get to work!

Hopefully this freight forwarder guide has helped you to understand the process of becoming a freight broker, as well as what they do. This is the first step in starting your career in this field. Keep your math skills in check and try to get on a decent course, and you’ll be well on your way to starting your new profession.


Aether has been playing World of Warcraft since 2006. In his youth he raided 7 days a week, but now just plays with friends doing Mythic dungeons and Arena. He swaps his main more often than he should.
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