August 25, 2021
What Is a Freight Broker and What Do They Do?
Another aspect of trucking that most people overlook is a freight broker. It’s possible to still be part of the trucking industry, even if you don’t drive a truck, and a good broker can help trucking companies be successful.
Whether you’re looking for a freight broker for your company or you want to become a broker yourself, here’s an overview of what they are and their impact in the trucking industry.
What Is a Freight Broker?
A freight broker works as the middleman between shippers and trucking companies. They take the hard work of helping shippers find trucking companies to work with, help trucking companies find shippers, and manage the negotiations on both sides.
What Do They Do?
Freight brokers handle a lot of the paperwork that comes with navigating loads and negotiations. A good broker often has connections with a variety of shippers and trucking companies so they can keep loads moving. Their primary responsibilities include:
- Matching trucking companies to shippers and loads that need to be hauled
- Negotiating rates and fees for trucking companies and other businesses
- Helping trucking companies lower their deadhead miles
Should I Use a Broker for My Trucking Company?
There are a variety of reasons why finding a broker could be a good move for your trucking company. The biggest reasons are:
- They can help you find loads while you are trying to build relationships directly with shippers
- They can help you find backhauls
- They can provide more consistent work
While you can use other options to find loads for your company, like a load board, a broker is going to help you run successfully, as they can cut down on the time it takes for you to find a load. As a general rule, the more time you spend finding loads, the less time you’re actually out on the road making money for your business.
It’s often advantageous to find one or two brokers and do as much work with them as possible. That helps you develop a good working relationship. Once a broker trusts you, they are more likely to give you their better paying, more consistent loads.
If you’re a new trucking company, many brokers won’t work with new authorities. We’ve covered some tips in our podcast Haulin Assets to build a good relationship with your broker and get more loads.
How Do I Become a Freight Broker?
If you’re someone who is good at managing projects and relationships with companies, you could be a good fit as a freight broker, and it’s a good option to enter the trucking industry even if you don’t have a CDL. There are two key steps to becoming a broker.
1. Get Your Broker Authority
Similar to the MC Number and DOT Number that trucking companies have to get, you also have to get an MC Number that represents your broker authority. Your freight broker authority shows to the Federal Motor Carrier Safety Administration (FMCSA) that you will be following all the proper regulations and rules that come with running your business.
At Motor Carrier HQ, we can make sure you get your broker authority for just $499, and we’ll get it filled out properly the first time, as the FMCSA doesn’t offer any refunds if you apply for the wrong type of authority.
2. Get a Freight Broker Bond
A freight broker doesn’t necessarily have to get insurance, but they do have to get a freight broker bond. A bond acts as an insurance policy to cover any loads they manage and act as assurance that your broker company is legitimate. If you plan on becoming a broker, you need to make sure you have a bond that covers $75,000.
Want To Become a Broker?
You can get your broker operating authority with the help of Motor Carrier HQ for just $499, which includes the $300 filing fee from the FMCSA. With our measure twice, cut once method, we take care of all the steps to help you get your brokerage licensed with the FMCSA. We’ll also do our best to answer any questions you have about running your business. Talk to one of our coaches today!
I’m an owner operator, should I get my broker authority?
We’ve covered it more extensively here, but if you’re already operating a trucking company, there may be benefits to also being a broker. Essentially, if there are high-paying loads but you don’t have the capacity to take them on, it’s possible for you to hire a different trucking company to help you handle the load while you still make a commission.
It’s a win-win for you and the other company, as you can increase your earning potential while helping other companies with their loads.
How do I find a broker?
If you’re a new trucking company with new authority, it can be hard to find a broker, even more so one that will work with a new trucking company. We work with brokers and trucking companies all across the country, and we’ve curated a list of experienced brokers, especially those who will work with a new authority, available for free.