Myth # 1: You need expert representation (such as a DOT practitioner, lawyer, accountant, etc.) to file for motor carrier and/or property broker authority.
Truth: The documents you need in order to file for motor carrier and/or property broker authority are readily available at the Federal Motor Carrier Safety Administration’s website. Instructions on completing these forms are provided, and if additional help is required, you can contact the FMCSA directly.
Myth # 2: An expert can get your authority faster than if you file yourself.
Truth: No matter who files for your authority, you will be given a temporary MC number instantly. That MC number will become permanent and active after a 10 day waiting period and after you have met the bond and BOC-3 requirements. There is no special filing method that can make this sequence of events happen any faster.
Myth # 3: An instructor who is not actively engaged in brokering freight can provide you with practical and up-to-date knowledge about the industry.
Truth: You should ask for the name of the brokerage (and its MC number) with which the instructor is affiliated. You can verify whether or not a brokerage has active authority (using its MC number) through the Federal Motor Carrier Safety Administration website.
Myth # 4: The ability to teach requires no formal training.
Truth: Teaching is a skill that requires formal training. It requires well developed skills in curriculum development, lesson preparation, lesson delivery, and appropriate evaluation.
Myth # 5: There are different levels of broker certification
Truth: There is only one level of broker certification: The official term is Property Broker. No matter how many schools you attend, courses you take, money you spend, or years you work, you are still a Property Broker. A more common term used is Freight Broker. The Federal Motor Carrier Safety Administration (FMCSA) does not recognize any other title than Property Broker. You can contact the FMCSA at 1-800-832-5660.
What is a Freight Broker (Property Broker)?
A: Property Broker is the correct terminology for many names used in the business to identify what we do. Truck Broker, Freight Broker, Freight Agent, Transportation Broker or Agent are all interchangeable terms synonymous with Property Broker’. Property Broker Authority allows a third-party to arrange pick up and delivery of a Shipper’s product by a Carrier without ever having physical control of the shipment.
What is the difference between a freight broker & freight agent?
A: A freight broker assumes all legal and financial responsibilities for the movement of cargo. They have met the requirements under the FMCSA Guidelines to legally operate as a property broker in the United States. A freight agent serves as an independent contractor for a freight brokerage but serves in the same capacity. Typically freight agents starting out will receive a commission of 50% of the gross profit from every load. An agent who is established with a book of business can command as high as 75% of the gross profit from freight moved for the brokerage. The agent in return does not assume any responsibility for insurance, authority, claims or collections of freight bills.
What are the legal requirements to operate as a Freight Broker?
A: You must apply for your authority from the Federal Motor Carrier Safety Administration (FMCSA) allowing you to act as a freight broker, post a $10,000 Surety Bond and file your BOC-3. You will also be required to complete a yearly Unified Carrier Registration.
How much does it cost to apply for your authority?
A: The FMCSA charges $300.00 to apply for operating authority (motor property carrier, motor passenger carrier, freight forwarder, broker). It requires that you fill out a 4 page form. You can do it online or by mail. When filing for motor carrier authority, there is no additional fee for a USDOT #. Notice of name change is $14.00. Transport Training International will file for your operating authority with the FMCSA for a service fee of $150.00.
How much is a surety bond?
A: You must post a bond of at least $10,000. The amount you pay for your bond depends on a number of factors including the type of bond you choose and the programs provided by the financial institution you choose to use.
What is a BOC-3?
A: BOC-3 is a processing agent. This is a representative upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder.
How much money can I actually make as a Freight Broker?
A: Earnings are determined on your motivation to succeed, and also how you adapt to the industry. A full-time freight broker can easily make from $50,000 to well over six figures ($$$$$$). This is a recession proof business that provides unlimited income potential and a long range customer base for the right person.
How can I locate the carriers and shippers for running the business?
A: There are several different areas in which to find shippers. A number of freight brokers purchase industry databases and member information of different industry organizations. You can also enter into Co-Broker agreements with other freight brokerages.
The primary job function you will perform is to contact companies who ship products and establish new accounts to use your services. You will also contact carriers in which to move your freight through using internet load boards, carrier databases and industry associations that you have acquired through networking.
Is there a need for more Freight Brokers in the industry?
A: U.S. Bureau of the Census County Business Patterns indicate that agricultural and manufacturing businesses are growing exponentially every year. Today, it is estimated that there are close to a million shippers. Needless to say, there is a very large market for brokers and agents. It has recently been estimated that freight transportation cost in the US is well over the multi billion dollar range annually and is rising. The amount of freight being moved by third parties such as freight brokers is currently estimated in the 20-30% range and growing. More shippers are using brokers & forwarders each year since it is usually much less expensive for a shipper to use an outsource, such as you and me, than to fund and maintain an in-house staff functioning as a transportation department. Employee-related costs are usually the most expensive part of any business operation. Paying a broker on a performance-only basis is the trend of the future with many shippers.
What is the difference in being a Freight Broker or a Freight Broker Agent?
A: A broker is the owner of his or her own company. They are required to meet all legal requirements (Authority, Bond, BOC-3) to operate as a broker.
An agent works under the authority of the broker and typically receives a percentage of the brokerage fee.
Can I work from home?
A: Yes! In fact, when starting your business it is recommended that you start from a home office to keep your expenses low while you grow and expand your business.
What do I need to get started?
A: The following are the basic office tools required for either broker or agent startup:
1. High speed internet access
2. State of the art computer
3. A fax/copy machine
4. A telephone with at least two lines (one dedicated to the fax, one dedicated for voice.)
5. A high quality broker software program
How much can I earn as a Freight Broker and how soon can I start earning?
A: Freight brokering is an excellent business and the agents and brokers that are successful are making anywhere from $40,000.00 to upwards of six figures per year depending upon the decision to work as an agent or broker and whether to operate a home-based business versus a larger office with employees. This business is based on contacts and relationships. It takes time to build contacts and relationships and turn them into paying customers. Sometimes it can take six months or longer to establish a solid customer base to see a profitable income, but it can be done in less time. Overall time lengths vary primarily on the individual’s determination and desire to succeed in this business.
Is Freight Broker Training School required?
A: Freight Broker Training School is not required to receive your property broker authority. However, the failure rate for those who attempt this business without freight broker training is high. In order for a broker to be successful in any industry (stock broker, real estate broker, etc.), formal training is a must. Transport Training of America will prepare you to perform broker duties in a profitable, ethical manner, giving you the tools needed to be successful in the field..
I’m already a licensed freight broker. Can I use this to educate my agents?
A: Yes. Our material is tailored in a comprehensive manner so that new freight agents not only understand their responsibilities, but also those of the broker.