Freight Broker?

The short answer is you need an operating authority, bond, insurance, contracts, a good lawyer, good accountant, shippers and carriers.

 

Being a newbie broker is a lot like being a newbie trucker. 99% of the startup programs are predatory scams and 1% are legitimate. In some cases it is worse than trucking, because the tools are much more sophisticated and the lawyers are just around the corner. Like trucking, there are ways to protect yourself if you don't take shortcuts.

Do not try to open a brokerage right away on your own, you will get used. There are shippers that just wait and prey on new brokers. You get a few loads hauled for them and then they just don't pay and move on to the next newie broker. You'll sue them? Go ahead, they'll wait you out. Meanwhile, you are being sued by the carriers that you owe money to. They file on your bond, and then your bond is cancelled and bam, you are the next grease spot on the road. You said you can source loads and sell, but can you collect? Do you have the cash flow to be a bank for your shippers? (because that's what you really are as a broker) If your shipper doesn't pay you, do you have the money to pay your carrier? (because you will still have to)

You should begin by working as an employee (not agent!!) for a trucking company with a brokerage department (called an asset- based brokerage). If you truly can find loads and are a good salesman, then you should be able to land a job as a broker, even in this tough economy. Even if you are an employee broker for only 6 mo to a year, you will have a much better idea on what is involved. Most carriers that have more than 30 trucks will have a brokerage department, just to manage the vagaries of freight flow and driver locations. You will build relationships with carriers, shippers, receivers and learn what the rate requirements are for different lanes, loads and equipment. If you are lucky, you will also source loads for your company's trucks, building relationships with brokers and learning how they operate, how to read a contract, check credit and trade references. You will learn how to file on a bond (because you will have to, probably in your first few weeks!) and deal with slow pay/ no pay/ fine scams, etc.

After 6mo- 1 year, you will still not know enough to go out on your own, but you will know what you are getting into. Consider it schooling, but on the company's dime. You will not have to ask what you need to start up on your own, because you will understand what you need an why you need it.

The independent, non-asset based brokers that I know that are successful all fall into one of two categories- longtime superstar salesmen from trucking companies that had deeeeeeep contacts with shippers and carriers and guys whose father-in-law, brothers, rich uncles, best friends, etc. own good size shippers and give them business out of kindness or pity.

Dr. Demented, I don't want to squash your dream, but do you know that sick feeling in your stomach that you get when a newbie is really, really, really excited to drive for Swift or CRE? I get that same feeling when someone wants to start their own brokerage. Trucking isn't just a ****** business for drivers, it is a ****** business for everyone. The scumbags prey on the ignorant, and they know just how to spot you (your mc# for starters, you can't hide from your high mc#).

That's the unvarnished truth. I hope it helps.

 

My mom was a broker for over 30 years and I helped out sometimes.

_ton bundle is absolutely right, the hardest part is forming a relationship with both drivers and shippers.
To do that often requires a lot of "pavement pounding".
If you focus on your freight base then obviously the drivers will come. So for that reason you need to start with securing the freight. You have to be a salesmen
you need to sell your service( which will be hard at first).

I understand that you have experience finding and booking loads, but when it comes to the actual brokering a lot more goes into it, and you really can't learn from a book... So I to will suggest you hire on with a company for at least 3 years and learn everything you can!

Lilbit was also right... However she forgot perhaps the most important.... INCORPORATE, before you ever book a load, Lawyers need to be put on retainer.

Again, the hardest part is forging new relationships with (good)shippers, (good)receivers especially now because freight is so low they get their pick of the liter!
Also, you will need to find your inner $$$ whole, because there are not to many honest companies out there... They will try to keep every dollar they can. But, that's why you have Lawyers on retainer.

Now, I am not the kind to get in the way of another mans dream, But I must tell you there is reason why my mom shut down her business... But, if you really want it then go for it and just soak up as much info(good andbad) as you can find... And if I ever call I'll expect that 3,000 mile load to the west coast paying $3 p.m...lol


Good Luck!

 

Probably most of the successful independant brokers out there worked for a larger company and took some of their clients with them.

 

Please believe every word that Ton Bundle has said in his post. That's the real world. I have worked at some small brokerages and one of the largest in the nation who also has a huge amount of trucks. Not that I am a Brokerage Godess or anything but he is right. Go to work for a reputable brokerage and learn. If you can get freight in this economy you'll be a hero. Best of luck and don't let your dream die but work for someone else before you jump into the deep waters.

 

Thanks Luv, pharm and wahwah for the back up!

Dr. Demented, I hope your health can stabilize or improve enough to keep driving, if that is what you love to do. But if you do land a job as a broker/ dispatcher, keep us posted. They can be rewarding jobs, if you are with a good company. The main difference, career-wise, is that you can network as a broker and get a lot of contacts with nearly every carrier within 100 miles of your location. If you are competent and honest, you'll always have good prospects finding work. As a driver (especially OTR), you are always kindof cut off from potential opportunities to build relationships with other employers.

Luv, I was reading your blog, and it seems like we are on opposite career paths in some ways! When I get some posting whiskers we'll have to PM. Too strange!!

 

We quite possibly are...
I believe we will have to have about 7 million posts before we can do that.
Altho I did mention to another person about that and he went to someone on here and lo and behold, we have email addresses. Who knows, we may even know each other. LOL