A freight broker provides the communication link between an authorized freight carrier and the person or company that needs freight moved from one place to another. Many institutions provide training in freight brokerage, but it is not mandatory to have an educational background to broker freight. People who have worked for a licensed motor carrier can use the experience learned during their career to start brokering freight on their own.
To begin brokering freight, a few key elements are necessary to succeed. The most important step is to apply for licensing through the Federal Motor Carrier Safety Administration (FMCSA). This license can be acquired by filling out a form on the FMCSA website. It can take up to six weeks to obtain the proper licensing and a motor carrier number, which will be used to identify the freight brokering company within the industry.
After obtaining a motor carrier number and the license to broker freight, a list of trusted carriers should be compiled to physically move the freight. The Internet is the best way to find licensed motor carriers and gather price quotes. Customers will want to know the game plan before they choose to move freight with a broker. Therefore, it is important to establish relationships and concrete rates with motor carriers in the areas where freight will be picked up and delivered before making any sales calls to prospective customers. The idea is to lock down pricing with motor carriers on multiple lanes in order to quickly supply customers with rates.
There are many freight brokerage and trucking companies to compete with, so it is important to know the terminology. When a company or individual needs freight to be moved, or when there is a move available, brokers will often bid on the move. Bidding is where several companies supply the rate to the customer and the customer decides which broker will move the freight. Additionally, moves are often referred to as “lanes”. Customers often ship to and from the same locations repeatedly. These recurring moves present the perfect opportunity to sign contracts with customers and turn the lanes into “dedicated lanes”. A dedicated lane is a contracted, agreed upon, rate between the freight broker and the customer and can sometimes develop into a long-term relationship with the shippers and receivers, who may ship products of their own. Shippers and receivers will want timely pick-ups and deliveries and will trust a broker with their freight if they know everything will be on time and affordable. They will also be more apt to sign a contract with a freight broker firm if they know that their parent company regularly trusts them to move their freight.