wanting to go into brokering

In order to become a freight broker you will need to apply for broker authority. You will be required to post a $75,000 surety bond beginning next year. At one time carriers could broker out some of their excess loads without having to get broker authority. Those days are pretty much behind us. Most of the major carriers who have their own logistics or brokerage business have gotten broker authority.

Getting started will require some good contacts and deep pockets to pay your carriers until the money comes rolling into your bank account. You may be able to factor some of your receivables once you get started, but that will also affect your bottom line.

 

If you want to find and keep good carriers, you need to have good rates and quick pay. If you can't afford to handle the payables until you get paid, you may need to either have a good line of credit or use a factor.

 

Do alot of o/o who get their own authority get their broker license as well? Seems like a good idea no?

 

Most who get their motor carrier authority don't get broker authority. Not everyone wants to broker freight to other carriers. Unless you own several trucks and drivers it doesn't necessarily make sense to get your broker authority. You won't have the time to do justice to either. It takes time to find and book freight. Once you find accounts, they need to be serviced. Your day will be spent on the telephone and computer. If you are a single truck operation or someone with a couple of trucks and you are also driving, it will be difficult to broker enough freight to make it worthwhile. In the coming year, brokers will need to post a $75,000 surety bond in order to get or maintain broker authority. That is a lot of money. Unless you are booking a lot of freight it may not be worth it.

 

I sound like a broken record but people just don't seem to understand... being a GOOD freight broker is more than just posting your loads to ITS and waiting for people to call. It takes work, hard work. Accounts have to be serviced, maintained, contracts negotiated, visits to your clients home offices (airfare, hotels, picking up tabs, etc.) You have to pay your carriers in a sufficient amount of time and then not get paid for sometimes up to 180 days or longer. Clients, just like carriers will fail to pay and they don't have a broker bond to file on. You're just flat ### out that money... kiss it goodbye... and then pay the carrier. Hope you have a large bank roll sitting around because if you don't you're setting yourself up for failure.