A freight broker is a company or an individual acting as a transportation intermediary, to facilitate the movement of cargo. Being a crucial link between the shipper and a motor carrier, they are always in high demand in the trucking industry. Their services are indispensable as they are valuable to both parties and support the smooth running of a supply chain. You can put your networking and negotiation skills at work to start a freight brokerage business in Canada and the US.
The rising demand for trucking services in Canada and the US has increased the number of new entrants in the industry. You can cater to them by offering efficient, safe, and affordable shipping services through your freight brokerage business. The basic requirements to start as a freight broker will be a computer system, a smartphone, a stable internet connection, and industry experience. We have put together a quick guide to walk through the role and understand the technicalities of starting your freight brokerage business.
Freight Brokers are matchmakers of the trucking industry. They help find trucks for loads and vice versa to keep the goods moving from the source to their destination. Freight brokers are responsible for offering timely deliveries at competitive rates.
As a freight broker, you will be acting as the communicator and coordinator between the shipper and motor carrier. In-depth knowledge of the industry, good networking, and excellent negotiation skills are important to set up a freight brokerage business. Your daily responsibilities will be:
To start your business as a freight broker you can choose to rent an office space or operate from your own house. You will only need a computer system, a smartphone, and a stable internet connection to start working as a freight broker.
Your everyday work will include finding shipments, arranging pickups and deliveries, determining shipping rates, and handling complaints.
An in-depth understanding of the trucking industry and its challenges will help you to grow your trucking business quickly. While a first-hand experience of working in the trucking industry is good for your business, you can also enroll in a freight broker training course. It helps you get a competitive edge and an in-depth understanding of the industry. Truckadium offers hands-on freight broker training designed by industry experts to help you accelerate the growth of your brokerage business.
A freight broker needs to multitask and handle challenging situations in a fast-paced environment. The role demands an in-depth understanding of the trucking industry and a specific skill set. The following skills will help you become a successful freight broker:
1. Networking Skills: As a freight broker you will work as a coordinator between a company that has goods for transportation and a trucking company that has trucks to transport those goods. Having a dependable network will allow you to operate effectively and ensure the safe delivery of all shipments.
2. Analytical Skills: You should be able to make data-driven decisions and offer informed solutions to everyday problems.
3. Negotiation Skills: You will have to work out deals with shippers and carriers on a daily basis to offer them cost-effective services. You must be good at negotiating the best rates without compromising the quality of services.
4. Computer Skills: You should be proficient in using computers, smartphones, and devices such as printers, scanners, and fax machines. You will have to update and maintain records of all shipments and using a software will make your work easier and error-free.
Average salary for a broker in the US is $ 62,105 yearly with an additional average of $ 28,000 in commissions. Earning potential can vary vastly based on skills and experience.
Apart from starting your own freight brokerage business, you can also opt for working as a Freight Broker agent under a bigger Freight Brokerage. Some of the big freight brokerage companies which hire individuals with entrepreneurial bent of mind are Landstar, GlobalTranz and many more. These companies do expect you bring your book of business when you start with them. Advantage of starting with them is you get all the training and support and you can better manage cash flow. Downside of this is that you will have split the commission and you might end up paying 50-60% of the commission to them. If you want keep all the commission to yourself, it might be a good idea to get your own broker authority and start your own freight brokerage business. However this will require a lot of business planning, initial set up costs and will have to look at efficient ways of managing the cash flow on your own.
Like any other business, there is a lot of planning and research required to start your freight brokerage business. We are sharing the key steps to help you get started:
1. Know the industry and understand key terms. You can enroll for the freight broker training course with Truckadium to get an in-depth understanding of the industry and hands-on experience of the freight broker role.
2. Choose your target market depending upon the industry, type and size of loads, locations you wish to operate in. Truckadium can assist you with the process with our specialized business consulting services for the trucking industry.
3. Find carriers that meet the requirements of your customers and build relationships with them.
4. Freight Brokerage business is not regulated in Canada and it is relatively easier to get started. In case you plan to move US-Canada cross border freight you must apply for broker authority with the Federal Motor Carrier Safety Administration (FMCSA). You can use the Unified Registration System to get a license- known as Motor Carrier (MC) number- for interstate commercial operations. You must also get a minimum surety bond of USD 75,000 and insurance. You can contact Truckadium to help you apply for your broker authority.
5. File Form BOC-3 (Designation of Agents for Service of Process) to designate process agents in every state you plan to operate. Through this process, you will be legally allowing them to accept court papers from the state on behalf of your company.
6. Prepare a business plan and arrange for cash inflow to manage your running costs. You can set up your business in a rented space or even in your own house.
7. Devise a marketing strategy for your business and build a professional website for your company. Reach out to your clients through print and digital marketing. Use brochures, flyers, advertisements, blogs, and social media posts to attract prospects and put your best interpersonal skills to convert them into customers.
Freight Broking in Canada and the US requires dedication, hard work, and industry-specific skills. You need to understand the trucking industry to identify the challenges and opportunities for you. To build a strong foundation for your freight broking business and grow it rapidly, you must be fully prepared.
The best option to acquire knowledge about the industry and your role is enrolling for freight broker training. Truckadium offers freight broker training through a specially crafted course. We offer in-class sessions and live online sessions to give you an insight into the day-to-day operations of the freight brokerage business. Our industry experts discuss topics crucial for starting your freight brokerage business like business planning, sales, finding shippers and carriers. They discuss case studies to give you practical knowledge about the work and everyday challenges associated with it, like handling rates negotiations. The training helps you prepare yourself and make your business fail-safe.
Setting up a freight brokerage business requires basic equipment, a handful of skills, and a viable business plan. You need to follow the process step-wise and give yourself adequate time for planning to set up your business. Remember to take professional assistance and learn from their experience to maximize profitability and grow your freight broking business.