Friday, March 23, 2007

5 more questions on Freight Brokering

What is the difference between a Freight Broker and an Agent?

A Broker owns his/her own company and must obtain all of his/her own legal documents to get started.

An Agent works for an established Broker under the Broker's legal documents. It is typically an all-commission position

What do I need to get started as a freight broker or a freight broker agent?

If you want to become a Broker (start your own company), you will need a computer, telephone, and fax machine. In addition, you will need to obtain the 3 legal documents listed below:
▪ Broker's Authority: through the FMCSA (Federal Motor Carriers Safety Administration) - $300. We teach our Freight Broker Training students to properly fill out the OP-1 and file for your authority.
▪ Surety Bond or Trust Fund: obtained from a local bank or bonding company. Costs vary depending on your personal credit history. For as little as $550 per year to as high as a one-time fee of $10,000. Works much like a regular insurance policy. The form to be filed is either the BMC 84 or 85 depending on whether you obtain a bond or trust.
▪ Processing Agent: Approximately $50 so that in case you ever have a lawsuit filed against you, a lawyer from that state will call and inform you of the claim. The form to be filed is the BOC-3.

If you want to become an Agent, you will only need a computer, phone, and fax machine.

Can a freight broker successfully work from home?

YES! It is a great place to start your small business and will keep your expenses down until you have enough financial resources to open up an office.

How long will it take for my business to become profitable?

This is a relationship business and relationships take time to develop. Typically it will take 2-6 months to show a profit, but it has been accomplished in less time and in more time. You can generate revenue as soon as you become licensed. Your success depends on many factors, including your level of determination your attention to detail, and your genuine desire to help your CUSTOMERS succeed..

Does a brokerage company carry cargo and liability insurance to protect its clients' interests?

By law, a broker is not required to carry cargo or liability insurance.