
Learn how to get a freight broker license and move freight in a few easy steps.
The freight industry is continually expanding and having a freight broker license gives you the authority to earn money by moving truck freight without actually hauling it.
A freight broker license allows freight brokers the authority to move freight by connecting shippers with carriers, essentially brokering the deal. Freight brokers are hired by shippers who have freight that needs to be hauled from one location to another.
Let’s say there is a furniture warehouse in Texas that needs to ship its freight to department stores in Georgia. The warehouse representative is the shipper, who needs to find a carrier to haul the load. This is where the freight broker comes in.
With a freight broker license you are paid by the shipper to find a carrier to haul the load. You can use your broker authority to find qualified carriers on load boards like Truckloads by either posting information about your freight or by doing a truck search to find a potentially interested carrier.
To get a freight broker license and have broker authority you must apply for a US DOT number with the Department of Transportation first. Once approved, use your DOT Number to get a Motor Carrier (MC) number and broker authority with the Federal Motor Carrier Safety Administration (FMCSA). This is approved through the completion of the OP-1 Form which includes a $300 application fee.
Having broker authority isn’t the only requirement to become a freight broker. You will need to decide if you want to start a freight broker company or if you want to work for an established brokerage company.
Regardless of your choice, you should be sure to do ample research in order to better understand the nuances of the trucking industry and which options are best for you. We’ve provided a step-by-step guide to help you become a freight broker.




Freight Broker Bond [p] Want a freight broker license? You'll need a freight broker bond of $75,000 first.[/p]
[h2]Freight Broker Bond[/h2]
[p]The freight broker bond is one of the lesser known parts of being a freight broker but it’s quite simple, and once you get a better understanding of it, you should feel as comfortable with your freight broker bond as you do with getting car insurance.[/p]
[h2]What is a Freight Broker Bond?[/h2]
[p]A freight broker bond is a form of a surety bond, which is like an insurance policy for a contract, though it doesn't take the place of liability insurance. It is a legal commitment made by one party to another to pay a certain dollar amount if the terms of a contract are not met. [/p]
[p]In this instance, the bond protects a customer from losses if you don’t come through as well as giving carriers the peace of mind knowing they will be paid in a timely manner.[/p]
[h2]BMC-84[/h2]
[p] The BMC-84 is essential to your freight brokerage as it reassures carriers and companies that you have the backing to broker deals. BMC-84 is the bond for $75,000 and is required by law. It is necessary to cover payouts of possible claims (damages, broker negligence, failure to pay, etc). [/p]
[h2]Applying for a Freight Broker Bond[/h2]
[p]A freight broker bond can be acquired from any insurance agency such as Liberty Mutual, The Hartford, among hundreds of others. Alternatively, you can search for specific firms in your state who specialize in freight broker bonds. [/p]
[p]When you're ready to select your agent of choice they will all require the same information to process your BMC-84: exact business name as it appears on the business license, the exact dollar amount for bond, business address, and all business/personal financial records. [/p]
[p]You must pay a percentage of the freight broker bond up front before the agency will process it. Usually, this annual premium will be between $900-$2,000 depending on your credit. It can be paid for with a credit card or check in most instances and takes about 24 hours to process.[/p]
[h2]Can I Get a Freight Broker Bond With Bad Credit?[/h2]
[p]Yes, you can still get a bond. If you have bad credit it’s not impossible, but it will increase your cost to secure a bond which can run upwards of $2,000. Keep in mind that surety bonds do not affect your credit score so it wouldn't hurt to search around though it's best to start at the bigger agencies first. [/p]
[p]The larger the firm the more freight broker bond providers they work with which increases your odds of being approved. Just remember the premium on the freight broker bond is a percentage of the bond itself, so if your credit is bad the premium will be higher. Even though you will have to pay more up front it allows you to open your business and provides an umbrella in case of any freight claims.[/p]
[h2]Freight Broker Bonds and Claims[/h2]
[p]Trucking is dangerous and things are bound to go wrong on the road from time to time. Customers will understand that. However, when things do go wrong, someone needs to be held responsible and pay the damages. Similar to a car accident, there will be a resolution and one party must pay out to the other.[/p]
[p] This is why it is required for companies to maintain a $75,000 bond. If you're found responsible and must pay out on the claim, your bond will act as a line of credit to do so. Before being issued your bond you must sign a legal document to repay in full in the case of such a payout. [/p]
[h2]Bonding Agency [/h2]
[p]When selecting your bonding agency to try to use one who is also a Managing General Underwriter (MGU) bonding agency. MGU Agencies can and will help you through each stage of a claim. It is recommended to do everything possible to be proactive when issues arise on loads to prevent claims from being filed. Just like car insurance the more accidents, you have on your record the harder it is to get insured. Only here not being able to get a bond can cause you to go out of business as they are required to operate.[/p]
[p]Remember DO NOT submit your proof of insurance directly to the FMCSA. The FMCSA requires that your insurance company submit the form and insurance certificate on your behalf.[/p]
[h2] I Have a Freight Broker Bond, Now What? [/h2]
[p] Now that you've covered your freight brokerage from potential claims with your freight broker bond, you can either continue to start your freight brokerage company or if you're ready, explore load boards to help you post loads that qualified carriers can view.[/p]
[button-white href="https://truckerpath.com/blog/how-to-become-a-freight-broker/"]How to Become a Freight Broker[/button-white]
[p]Freight brokers who use Truckloads have the ability to connect with over 100,000 qualified carriers ready to haul their freight. You can even track your loads to verify a carrier's location and ensure that your customers delivery is going according to plan. [/p]
[button-green href="https://truckerpath.com/truckloads/broker-load-board/?utm_source=blog&utm_medium=brokerbonds&utm_campaign=aug2"]Get Started With Truckloads Now[/button-green]
Find Freight Carriers [p] Discover how to find verified freight carriers who are reliable and ready to haul your client's truck freight. [/p]
[h2] How to Find Freight Carriers [/h2]
[p] There's more to being a freight broker than just finding a freight carrier, it's about finding the right freight carrier for your shipping client. [/p]
[p] Freight carriers need to be reliable and qualified to deliver the various <a href="https://truckerpath.com/blog/types-of-truck-freight/"> types of truck freight.</a> You want to be certain that the freight carrier will pick-up and deliver the load in a timely manner and not compromise the freight itself, costing you and your client in potential liability. [/p]
[p] In order to find freight carriers, you will need to source truck freight load boards where carriers are searching for available loads. The great thing about load boards is you can post your freight with specific details such as location, date, and load details that will ensure interested freight carriers will inquire. [/p]
[p]Keep in mind, that not all load boards are created equal. Some have advanced technology with features others simply do not. [/p]
[h2] Find Freight Carriers on Truckloads Load Board [/h2]
[p] <strong>Truckloads</strong> free broker load board is one of those with unmatched technology. It provides you with access to over 100,000 verified freight carriers who are qualified to haul your freight. It's easy to post truck loads via CSV or TMS and you can keep tabs to see which freight carriers have viewed your load and how many times. [/p]
[p] Truckloads also has unique features such as <em>Truck Search</em> which allows you to search for available trucks in a specific location. View a carrier's <strong>Safer Watch Rating</strong> to confirm if they are qualified and if you're interested, contact the freight carrier directly. Now you can move more truck freight than ever before! [/p]
[button text="Try Searching for Trucks" href="https://truckerpath.com/truckloads/broker-signup/?utm_source=blog&utm_medium=findfreightcarriers" width="250px"]
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[h2] Foster Relationships With Your Trusted Freight Carriers [/h2]
[p]Once you find freight carriers that are reliable and meets your standards, stay connected with them. Make it a priority to reach out to freight carriers whom you've had enjoyable working experiences with and stay in touch.[/p]
[p] Even if it's strictly professional via email or phone, you can still be friendly and reach out to the carrier to see how things are going and if there are any new updates.[/p]
[p] An inquiry might provide you with new information such as the freight carrier adding new equipment to their fleet that might allow them to haul other truck freight types for loads you have. Although load boards are a convenient and reliable tool, you need to stay in contact with freight carriers if you want to succeed as a broker. [/p]
How to Become a Freight Broker?
[h2] How to Become a Freight Broker? [/h2]
[p]To become a freight broker you need to understand the <a href="https://truckerpath.com/blog/trucking-industry-trends/">trucking industry trends</a> first. Thousands of products need to be moved across America and companies use every venue possible to ship their freight, but none more than through truck freight. The trucking industry produced $726.4 billion in revenue for 2015 and freight tonnage has increased since. Freight is hauled by truck drivers but moved by freight brokers. Here's how you can become a freight broker and enjoy a piece of the lucrative pie.
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[h2]1. Register your Freight Broker Company [/h2]
[p]
There are a couple routes you can choose to become a freight broker. The easiest way to start is to get hired by an established freight broker company. There you will fall under their insurance and use their capital as well as being provided training about the trucking industry. If you've already done this and have the necessary capital, this is where you would be registering your business with the local licensing department. Once you register your LLC you will receive your Tax ID Number [a href="https://irs-tax-id.com/?utm_source=bing&utm_medihttps://irs-tax-id.com/?utm_source=bing&utm_medium=cpc&utm_campaign=irs%20tax%20id%2Fein&utm_term=irs.gov%20tax%20id%20number&utm_content=irsum=cpc&utm_campaign=irs%20tax%20id%2Fein&utm_term=irs.gov%20tax%20id%20number&utm_content=irs"]from the IRS[/a].
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[h2]2. Have a Plan For Your Freight Broker Company [/h2]
[p]
The most important part of becoming a freight broker is to have a clear vision and plan, especially if you need to generate funding from lenders. Know your target, stick to your strengths, and don’t be afraid to grow.
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[p] Understand your region and what types of loads move through, who's your ideal customer base? What type of services will you offer? How will you market your freight brokerage?
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[h2]3. Build a Carrier Base [/h2]
[p]Life as a freight broker is all about who you know. Networking and connecting with motor carriers is the only way you will succeed in moving freight. You need to start building a list of trucking companies with capacity and willingness to work with you.
[/p]
[p]This is when networking meets relationship building. Establishing trust and showing that your work efficiently and provide good service can be the difference when finding carriers. The best way to find carriers is by using load boards from trusted companies like Trucker Path Truckloads. Load boards allow you to post your freight for carriers to view and then contact you if they're interested in hauling them. This way you can move more loads quickly and from anywhere. [/p]
[p] Don't forget, freight brokers also need to connect with shippers who need freight moved. Here's a closer look at <a href="https://truckerpath.com/blog/how-do-freight-brokers-find-shippers/">how freight brokers find shippers</a>.
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[h2]4. Freight Broker Authority [/h2]
[p]You’re well on your way to becoming a freight broker now that you have a registered business and a carrier group to connect with, but there are still a few more requirements. You must apply for a US DOT number with your local Department of Transportation branch. Once you are approved, take your DOT Number to the Federal Motor Carrier Safety Administration (FMCSA) to get a Motor Carrier (MC) number and broker authority. This is approved through the completion of the [a href="https://www.fmcsa.dot.gov/registration/form-op-1-application-motor-property-carrier-and-broker-authority"]OP-1 Form which includes a $300 application fee[/a].[/p]
[p] Here are a few more details as to how you can get your <a href="https://truckerpath.com/blog/freight-broker-license/">freight broker license</a>.
[/p]
[h2]5. Freight Broker Bond [/h2]
[p]
To show carriers and companies alike you have the financial backing to broker your business you will need at least a $75,000 <a href="https://truckerpath.com/blog/freight-broker-bond/">Freight Broker Bond </a>(BMC-84 or BMC-85). Think of this as insurance for your business. This will cover you in the instance something goes wrong leading to monetary losses of a company.
[/p]
[p] Let's say the carrier you contracted to haul a load shows up to the receiver with a truckload of spoiled milk because you instructed them to cool the reefer to 74 degrees instead of 47. You were deemed responsible and your client seeks repayment of damages for a load of milk valued at $65,000. Your bond covers that cost similar to the way car insurance companies handle a car accident.
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[h2]6. BOC-3 Blanket of Coverage [/h2]
[p]
One of the last filings you will have to complete in order to become a freight broker is your [a href="https://www.fmcsa.dot.gov/registration/form-boc-3-designation-agents-service-process"]BOC-3[/a].
This is the Blanket of Coverage for your company. Basically, you must file your BOC-3 in each state you will be operating. You will need to select a process agent to file. The process agent is the company who will be handling your legal processes in each state you have operating authority.
[button-white href="https://www.fmcsa.dot.gov/registration/process-agents"]List of FMCSA Agents[/button-white]
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[h2]7. Freight Broker Essentials [/h2]
[p]The tools of the trade for a freight broker are office equipment and supplies to make work easier and more organized. You'll need the basics like a computer with internet, printer, scanner, and fax machine. But you'll also need a phone with several lines and a quality headset to communicate with drivers and clients.
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[p]
Don't forget<a href="https://truckerpath.com/blog/freight-broker-software/"> broker software</a> as you'll want software that allows you to keep track of your loads, customers, carrier locations, and truck status (some load boards will do all of this for you). DR Dispatch and ITS Dispatch are a few of the programs that can be beneficial.
[/p]
[p]
Look for broker software offering GPS tracking based on logged location updates, bill of lading/invoice generators, pickup and delivery location (shed) logs, note taking/documentation, and most importantly rate confirmation generation. These are the essential functions needed to manage your loads from pick up to delivery.
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[h2]8. Freight Brokerage Financials [/h2]
[p]In order to continue your carrier relations, you need to get backing from a bank. As a freight broker, you will be paying the carrier after they deliver the load. Pay terms for carriers range from 1-28 days (sometimes more). Whereas you will be extending the customer a line of credit or they will pay up front for the services.
[/p]
[p] You make your money off of the margin known as the "spread". For example:
[ul]
[li]Company X pays you $3,000 to find a motor carrier[/li]
[li]You pay Carrier Y $2,500 to haul the load[/li]
[li]You earn $500 for brokering the arrangement. Of course, this isn't all profit as overhead costs will apply, but you get a general idea.[/li] [/ul]
[h2]9. Marketing Your Freight Company [/h2]
Lastly, in order to succeed as a freight broker, you have to make a name for yourself by building awareness surrounding your freight company. Reliable service that is transparent and convenient is key to building a reputation with carriers. Word of mouth is critical for growing your freight business locally but you have to put yourself out there and raise awareness just like any other startup if you want to be a successful freight broker.
[/p]
[button-green href="https://truckerpath.com/truckloads/broker-load-board/?utm_source=blog&utm_medium=becomeafreightbroker&utm_campaign=july12"]Get Started With Truckloads[/button-green]