How to Become a Broker for Trucks in the USA?

A freight broker, or a broker for trucks, is an individual or company that serves as a third-party agent that arranges shipments from pick-up to delivery, and negotiates transportation rates with carriers.

How to Become a Broker for Trucks in the USA

The role is one of liaison, facilitating a close working relationship between shippers and carriers. He or she serves as a vital link to accomplish cooperation in shipping cargo. However, the freight broker does not provide shipping or carrier services themselves.

According to several sources, there are more than 16,000 licensed freight brokers and that is projected to increase annually due to the continued growth in shipping propelled by e-commerce. Therefore, the role of a freight broker can be an excellent job opportunity in today’s vast consumption economy.

What Does a Freight Broker Do?

A freight broker, sometimes called a third-party logistics provider, assists parties who want to ship freight by finding and arranging transportation with qualified carriers, for the specified load. Their key function focuses on negotiating transportation deals with both the shipper and the carrier, and then facilitating the movement of the freight. They work hard to find qualified and reliable carriers for shippers, and build revenue for carriers by pushing loads to them that are ready to haul.

First a shipper provides a shipping order. Then, the freight broker collects all critical information including location, contact information, freight specifications, shipping dates, special packing or handling and equipment required. Then the broker enters the order into a computer freight management system and begins to schedule the order’s pick-up and delivery times.

The broker then finds and secures qualified available transportation for the order. Brokers will typically build a network of carriers that they have sourced, qualified, and know they can depend on. They will then know that the selected carrier service and the truck driver are licensed, have the required amount of cargo and liability insurance, use a clean uncontaminated trailer, and are committed to the required delivery timeline.

A broker:

  • Manages the dispatch process, double-checking all transportation and delivery details.
  • Stays in close contact with the carrier during loading until the entire load is on the trailer. He verifies the details of the load and destination.
  • Stays in contact with the driver during transit of the load.
  • Receives documentation on delivery and unloading of the freight, noting any overages, shortages or damage to the freight.
  • Receives the carrier’s invoice for shipment and then bills the shipper.

Trucking companies often make use of a freight broker because of their logistics expertise with the needs of shippers, shipping challenges, and delivery locations. They also value the broker’s role in constant communication during the shipping process including any issues that could arise along the way.                                                                                          

According to Freight People, a good freight broker has the following four characteristics:

  1. Makes sure that the freight is insured and that the carrier has appropriate liability coverage.
  2. Checks the carrier’s safety rating to make sure it is acceptable.
  3. Chooses the right carrier for the job.
  4. Accurately conveys all shipping instructions, including special care needs to the carrier.

How Much Does a Freight Broker Make?

The good news is that all economies in the world depend on the shipping industry and it continues to grow robustly. The freight broker category will continue to grow at double-digit levels, much faster in fact, than the average job rate growth.

The annual national average compensation for a freight broker is reported differently by the following salary sources:

  • Payscale: A range of $30,177 to $73,500, with an average of $41,571.
  • Glassdoor: A range of $31,000 to $49,000, with an average of $37,592.
  • Indeed: A range of $30,000 to $83,000.
  • Careeronestop: A range of $25,000 to $65,000.

If a broker is working inside a broker organization, there may be other compensation including bonuses and profit-sharing.

Direct Freight identifies that as with other career fields, those new to the role of freight broker will usually make considerably less in the first years of employment than those individuals who are further along in their career. Additionally, compensation can vary significantly based on the broker’s location and area of service. Other key factors are the number of client contacts and the relationships that the broker has developed with shipping companies.

Obviously, not all brokers are successful, just as individuals in other career areas might not find success. However, those who are successful can earn annual salaries of $100,000 or more.                                 

How Do I Become a Freight Broker?

There are two primary paths to becoming a freight broker. First, you can start your own brokerage company and second, you can join an organization as a broker agent.

Starting a freight brokerage is similar to starting any other type of business. Important steps include:

  1. Understand the industry, its requirements and the intent of your career. Colleges, technical and community colleges typically offer courses helpful in navigating these waters.
  2. Choose a business name and register your business entity with your State government. Forms of legal structure include sole proprietorship, limited liability company, partnership or corporation. You’ll want competent legal advice in selecting the type of organization that is best for you because this will drive many other accounting and finance decisions.
  3. Create a business plan as your definitive business operations and marketing guide.
  4. Obtain a USDOT number. You will also need to file an application with the Federal Motor Carrier Safety Administration (FMCSA) for broker authority.
  5. Get a surety bond worth at least $10,000. This is a type of insurance that guarantees carrier companies that they will be compensated for using space on their trucks. Getting a bond will require thorough background and credit checks.
  6. Designate a legal process agent for each state that you will work in.
  7. Secure general liability and cargo insurance.
  8. Set up a working office.
  9. Find the right carriers and begin to build solid relationships with them.
  10. Contact potential shippers who may need the services that you can provide.
  11. Determine load pricing.

Joining an organization as a broker agent will require freight brokerage training, people skills, communication skills, specific industry skills, and frequent on-the-job training. Gaining experience in the transportation industry can offer a good gateway into this career field.   

Working as a Freight Broker

The freight brokerage field can be a very attractive career field with strong potential. It will be most important to determine the level of resources that you have available to start a brokerage on your own, versus securing a position with an already developed brokerage organization.

Drive Us to Your Road!

With over 13,000 roads cataloged, we're always on the lookout for unique routes. Know of a road that deserves to be featured? Click here to share your suggestion, and we may add it to dangerousroads.org.