A real incentive and attractive element of becoming involved with the freight industry is the fact that you can ultimately work from home. You are granted a level of independence and freewill, regarding your workspace and hours, that almost no other industry in the planet has. Working straight from your home has its appeal.
Some of the many benefits this exciting field gifts its workers are:
- Being part of a $400 billion industry that is constantly evolving and growing.
- Huge income potential.
- Very low start-up cost as a Broker and almost none as an Agent.
- The possibility of running your own business from home.
- Easy to relocate.
- An international business that can do trade in not only the U.S and Canada, but the rest of the world.
- The possibility of expansion.
- Zero experiencenecessary to get started.
But, in order to become a freight broker and start earning a six-figure pay you will have to fulfill a number of considerations. As a freight broker the United States’ government requires you to file for a series certificates in order to operate:
There are certain requirements, which you need to fulfill in order to become a freight forwarder. Check them out below.
Certificates and licenses:
Yes, you would need some professional licenses and certificates, to prove that you are an authentic person.
This legally approved document is dispatched by the FMCSA (The Federal Motor Carrier Safety Administration). This is an agency of the United States Department of Transportation. As a branch of Transportation, the FMCSA’s primary mission is to regulate the trucking industry.
In order for you to figure in their database and practice being a broker within the margins of the law, the FMCSA has to approve you as a broker. You’ll need to apply online at their website, fill out a series of forms and pay, as of 2017, a fee of $750.
The process as a whole is rather simple and straight forward. Once you have completed it, and received their approval, they’ll grant you a motor carrier number.
Created in the 1930’s, in order to protect shippers from brokers and carriers, Congress passed a bill that would later be dubbed BMC-80; a way of regulating the industry and affording shippers’ a series of guarantees. This is a bond, that every Broker has to pay, that serves as a safeguard against any liability on their part.
If ever a claim from a shipper proves that the broker or the carrier is a fault for damaged goods, shipping delays or lost of income this bond is used in order to recompense the aggrieved party.
Since the mid’ 1970’s this bond was set at a $10.000. For over 45 years, this was the stated. It was valued as such using mathematical formula that took into account the cost of most freights. Since then, cost of goods, freights and what they carry have gone up.
Given the rise of cost, and the need to update the value in order for it to truly guarantee a recompense for the shippers, lobbies – on behalf of the shipping industry – pressured Washington. In 2015, Congress updated the value.
On that year, they passed the MAP-21 ACT (Moving Ahead For Progress in 21st Century) and, overnight, the price increased to a staggering $75000.
When the rates for the BMC were updated dozens of business instantly came into fruition; bond brokers. These enterprises are willing to give you the value of the bond for a small price or percentage of your annual gross and sometimes a collateral.
Each and everyone works on a different system. Each works with different figures and different stipulations.
Unlike the bond, which you only have to pay once in your lifetime – or if it’s ever used up – the bond broker’s fee is a value which you’ll have to pay once a year.
The best source for help, in this matter and others, is FreightBrokerBootCamp.com; for a minimal fee they are willing to give you a hand in this investigation as well as assist you in everything else.
Their website has a series of tools and reports, not to mention advice, that will ultimately become invaluable for your day-to-day operation.
Under the ICC (Interstate Commerce Commission) termination Act, all brokers are required to register and file proof of financial responsibility.
There are, aside from the broker’s bond, 4 types of insurance you’ll need to take into account:
Contingent Broker Auto Liability:
Protection against third-party claims. A common problem in the industry, and one that’s more than likely to affect you, is that certain truckers falsify their driver’s certificate of insurance. If, or when that happens, this insurance has you covered.
Contingent Broker Cargo Liability:
Pays claims that the carrier will not pay.
General Liability and Property Insurance:
An all-encompassing insurance.
Insurance for on-the-job accident. This insurance not only covers you workers and agents but also third parties that work for you; in case one of the trucking companies suffers an accident, and does not have worker’s comp’. If said accident happened on one of your rides, then the claim will unfortunately fall on your shoulders.
Once more, FreightBrokerBootCamp has a list of insurance companies, with great premiums that are gold standards in the industry.
The FMCSA (The Federal Motor Carrier Safety Administration) requires, once you have your license, insurance and bond that you file for a port authority certificate. Paper work that will allow you to operate within the bounders of the local port authority.
Logistics and Hardware:
The following requirements and their number/value depends on how many agents you employ and how many of them will be working in-house.
A printer/fax/scanner/phone combo and cellphones.
You’ll need to keep track of everything. Internet is rife with different programs – free and share – that are suitable for this task.
Try to get one that has pollination across different platforms (one that works for your computer, tablet and cellphone) and keeps everything in synch.
It all depend on how many of your staff will be working from your living room.
Chairs, staplers, desks, coat hangers, coffee machine, notebooks, notepads, pencils, pens, diagram boards, etc.
So, now that you know how to become a freight bróker, why don’t you start your new business? Go ahead and choose what you wanted to do, just from the comfort of your home.