Straight answers on how to become a freight broker working on your own.

I takes a $100,000 escrow to start your own brokerage. best bet is to find a trucking company that has there own brokerage. If you talk to the right people you may get lucky and they will train you. If you can get the experience then you could move to one of the big brokers. other option is to spend the money for schooling. Hard industry to get in to without training or knowing someone that will take you under there wing.

 

You work on commision. You will be hard pressed to start from scratch without some knowledge and contacts. Most people start with a company, learn the ropes, get a following of truckers ( or shippers ) , then leave and start on their own. You will also need a bond, might be hard to get without a track record.Cash to operate is needed, and hard to obtain.
With only 1 & 1/2 years experience, you probably need more education in the trucking world before stating a brokerage firm.

 

If you're a natural salesperson it wouldn't hurt to work for someone else and learning a few things. The most important skills you'll need are people skills and if you don't have that none of the schooling, book teaching, or plans made on internet forums will amount to anything. Can you sell? Do you even know?

 

That is fine and good that you want that do you have 200k free and clear today? If you booked freight today from a shipper you are likely 60 - 90 days out from getting paid for the load. The trucker is likely going to be looking for his money in 30 days or less. Your bonding company is going to want free and clear cash so that they are not paying out on bond and then office start up expenses. From the sounds of it you don't have a company that you have lined up to broker the freight for. Do you have a pool of drivers if you get freight that you can broker too. Do you have your personal expenses covered for the next 90 days till you may have a chance at getting a pay check?

 

Not true.

Most shippers pay in net 30 or less. If you don't have the 75k bond you can finance it through your bank but you might need a few thousand depending on credit and the bank. You can factor your invoices to pay carriers but you will lose some profit over it. Booking loads might be a challenge when your competition is every broker out there before you. You will a legal document packet drawn up and looked over by a lawyer.

 

Wrong. It takes a $75,000 BMC-84 Bond OR a $75,000 BMC-85 Trust Agreement.

OP, if you are dead set on brokering (not working as an agent for another broker), good luck. Here's a few things you'll need:

- MC # ($300)
- BMC-84/85 (W.A.C., about $1,185 for 84 bond. Otherwise, depends on your ins carrier)
- BOC-3 Process Agent (can get 50 state process for $35, look around. It's not required though, as FMCSA states that you can serve as your own process agent as a broker)
- UCR ($76)
- SCAC (Not required, but can't hurt. I think $68.00?)
- TMS (I'm a fan of Aljex, look to spend around $3-400 up front, $150 monthly)
- Load Board access (take your pick, I'm not looking up prices for this...)
- Computer (multiple monitors save Alt-Tab and your fingers)
- VoIP provider (get you a 1-800 and its WAY cheaper than landline, good providers about $30/mo and high signal quality)
- Internet (cost depends on market)
- Contacts in the shipper world (prospect, prospect, prospect)
- Contacts in the carrier world (treat them right, they'll return the favor. Otherwise, well, it's been good competing with ya!)

I'm sure I'm missing a few things, but there's the gist of it. Not too expensive, but it'll take a while to build the relationships (and credit rating) to be sustainable. A tip, if you don't have the disposable cash for 28-day or less A/P, look at a factoring company. If you go that route, make sure your shippers have solid credit ratings, or your factor will turn them down, and you'd better hope your shipper pays in enough time to pay your carrier.

I always aim for <28 day A/P, and usually, I encounter <30 A/R, but I have enough capital reserve to cover the loads if they don't.

Oh, and one more thing: get an attorney, and get him/her on retainer. Make certain that they are well versed in contract law (get them to draft your agreements), transportation law (in case someone tries to go after your bond/trust, or you) and business/corporate law.

An accountant wouldn't hurt, either.

Best of luck to you.

- Chris

 

i have been at it for almost 30 yrs. and your right you can do what you want. but with the new escrow the government has imposed on the broker industry. unless you have a crap load of money it's almost impossible to get started on your own. do your homework and you will see what i mean.

 

I recently retired from OTR due to health reasons. I have been working at becoming a Broker or Agent. It is amazing to me how much misinformation is floating around. Consolidated is right on target. Spelling out the facts according to FMCSA regulations, he has put forth good information. I agree this is the land of opportunity and anyone can start up a business. The caveat is how much time and research am I willing to put in to creating a solid business plan. Yes, it takes planning and research. There are many brokers and agents out there that are doing a good job. There are also many who get into brokering and find it is very difficult and close up shop within a few months of starting. In order to not be a statistic, I have contacted many of my friends in the industry and put out feelers to see if they would support my decision. I have 30 plus years in the industry and there is still so much more to know. Time and patience is my operating strategy.