Career Development

How to Become a Freight Broker: A Step-By-Step Career Guide

July 23, 2021

Freight brokers are an important part of the transportation industry. The amount of goods that need to be transported and shipped across the country has increased along with e-commerce. Someone needs to facilitate and track the shipments, and freight brokers assist with this process. If you are interested in becoming a freight broker, it may be helpful to learn about what a freight broker does and the steps you can take to become one. In this article, we discuss what a freight broker's responsibilities are, how you can become a freight broker and some answers to frequently asked questions.

What does a freight broker do?

A freight broker is responsible for matching shippers with transportation services to transport goods. Freight brokers may work for a company or run their own business. Some of the responsibilities of a freight broker are:

  • Marketing to attract new leads and prospects to develop sales
  • Locating and selecting freight service carriers that are safe and efficient
  • Quoting shipping estimates for customers
  • Scheduling orders with carriers
  • Recording relevant activities to keep track of business
  • Keeping customers up to date on shipping status and assisting with other questions and requests
  • Collaborating with carriers, shippers and dispatchers to conduct collections and drop-offs
  • Preparing carriers for loads
  • Negotiating pricing and contracts with carriers

Average salary

Freight brokers typically work full-time or part-time. The salary of a freight broker will likely depend on their years of experience, industry knowledge, employment status and geographical location.

Common salary in the U.S.: $61,891 per year

Some salaries range from $43,000-$108,950 per year

How to become a freight broker

Freight brokers must understand the freight industry and various trucking industry trends. To do this, you must learn about the trucking industry and develop the necessary skills to become a freight broker. There are a few different paths you can take to become a freight broker.
Here are the most common steps to become a freight broker:

  1. Attend freight broker training school
  2. Register your business and prepare your business plan
  3. Find the right carriers
  4. Meet licensing requirements
  5. Obtain freight broker bond
  6. File your BOC-3
  7. Develop a marketing strategy

1. Attend freight broker training school

Freight broker training school is not legally required however, it is recommended. Attending freight broker training school will assist you with the tools you will need to run a successful brokerage business. Many freight broker training schools offer courses in-person to provide you with a more hands-on experience, while other training schools offer self-study online classes. Freight broker training school will teach you about industry trends, technology tools, best practices and how to operate your freight broker business in the field. You may select the classes you need to become an efficient freight broker.

You may also choose to gain insights into the trucking industry by participating in online forums or by reading publications on shipping, trucking and logistics.

2. Register your business and prepare your business plan

The best way to start your business is to get hired to work with an established freight broker company. This allows you to gain industry experience and training, and start planning your own business strategy. To get started, you need to pick a name for your freight brokerage and register your business with the licensing department in your local area. You must decide which legal framework fits your business best. Most freight brokers choose an LLC or limited liability corporation. After you register you will receive a tax I.D. number from the IRS. You may also consider developing a business plan to discover your target market and apply for a line of credit.

3. Find the right carriers

Finding the right carriers is crucial to the success of your brokerage business. You must select carriers that are reputable, safe and reliable and that have experience working within the operations field you have selected for your business.

The best way to start searching for carriers is to check online directories or use direct references from other brokers in your network.

4. Meet licensing requirements

All freight brokers must meet legal requirements with licensing before they can operate in the field. Start by applying for a USDOT number with the Department of Transportation in your state. You will then be required to fill out an OP-1 freight broker application. which takes about three to four weeks to process and costs about $300 to fill out and submit.

After your application has been approved, the Federal Motor Carrier Safety Administration (FMCSA) will send you your motor carrier number in the mail. You must wait 10 days for your registration to be completed and receive your full MC authority to begin operating your business.

5. Obtain freight broker bond

Next, you must also apply for a freight broker bond or a BMC-84 bond. The bond requirement is $75,000 to show companies and carriers you have the financial backing to cover you if something happens to go wrong. This bond is similar to insurance for your business.

The surety that provides your bond will need to assess your personal credit, the stability of your business and your business finances before you can be approved. The premium percentages will vary based on your credit score.

6. File your BOC-3

BOC-3 is blanket coverage for your business. You will be required to file this in each state you will be operating in. You will also need to select a process agent before you can file. A process agent handles the legal processes in each state that you will be operating in.

7. Develop a marketing strategy

It is essential to develop a marketing strategy for your company by deciding what sets your business apart from the others. You will also need to decide what platforms will get your marketing message across the best. You may start by listing your business with online directories that will direct potential shippers and carriers to your website. Raising awareness is an important step to becoming a successful freight brokerage business.

Frequently asked questions

You may still have questions about what you can do to become a freight broker. Here is a list of frequently asked questions that can provide you with more information:

How long is freight broker training?

Freight broker training school lasts about 30 to 45 days. You may also choose to take courses at your own pace, as needed.

Where do I get customers?

The best way to get customers is by starting with people you know and asking friends and family about where they work since many companies require shipping. You may also take note of companies on the road and reach out to them via telephone or email marketing to gain leads. Once you've worked with satisfied customers, ask them for referrals.

Can I work as a freight broker agent without licensing?

You can still become a freight broker without starting your own company. You can work under a freight brokerage company as a customer-facing salesperson associate that assists clients with connecting available carriers to transport their freights.

Do I need to apply for a business loan?

You will likely need to apply for a business loan to operate your freight brokerage unless you already have enough capital to pay carriers the proper amount in a timely fashion.

Jobs similar to a freight broker

For those interested in a role that helps an organization ship goods, there are a variety of jobs to pursue. Here are 10 jobs related to a freight broker:

1. Dispatcher

2. Freight broker agent

3. Sales agent

4. Truck driver

5. Customer service representative

6. Account manager

7. Logistics broker

8. Delivery driver

9. Shipper

10. Packer


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