Archive for March, 2009

Are Freight Brokers in Demand?

Another question that you might ask of a site such as this Freight Brokers site is “Is the field of Freight Brokers a growing one and is it in demand?” Well, we can answer that one quite positively.

At the time of writing, we are aware of somewhere in the region of 15,000 licensed transportation brokers in the United States. However, a large number of these are inactive. The reason is that this is still quite a new industry that is growing and expanding all the time. To give you some idea of how it has grown, there were only around 70 brokers back in 1970.

It has been estimated that freight brokers themselves accounted for in excess of 10% of the total shipping industry. This amounts to approximately $40 billion out of $400 billion, in total revenues, which as you can see is clearly a high volume industry.

A recent article that was published in the Wall Street Journal went on to cite freight brokerage and logistics as being the fastest growing sector of the entire transportation industry. So are freight brokers in demand? You certainly could say that!

You may also ask “Is this a job that I can do from home?” Well, while you’d certainly appear more professional working out of an office, there is absolutely no reason why you could not do this from your home. In fact, a large number of agents and many brokers do indeed work out of their home based office. This is highly appealing to work at home parents or those for whom the idea of working from the comfort of their own home, without the hassle of commuting or the additional expense of running an office.

So acting as a freight broker from your home office would be a perfect thing to do under those circumstances. For more information on how the freight business works, click on that link.

Freight Brokers

What is a Freight Broker?

One of the first questions that you may ask when arriving at a site such as Freight Brokers is, “What is a freight broker?” Well, here is a brief explanation that may help you understand exactly what freight brokers are and what they do.

A freight broker is what can be legally termed a property broker. This is the term that was established by the body known as: Federal Motor Carrier Safety Administration (FMCSA). This is a division of the US Department of Transportation. Basically, it describes a licensed individual, or corporation that assists in making a freight shipper and an authorized motor carrier more successful within the transporting of cargo, or goods. So freight brokers can be a company or an individual trading from an office or even from home.

Knowing this, you may then ask, “What are the requirements to be a Freight Broker?”

Well, you’ll need to be in possession of three certain legal documents that are all needed in order to operate as a freight broker. These documents are:

  1. A Broker’s Authority – obtained through the FMCSA for (currently) a $300 fee. You need to fill out Form OP-1 and file for your authority in order to operate as a broker.
  2. Surety Bond or Trust Fund – obtained from a bank or bonding company. The cost of this document will vary depending on your personal credit. You will be required to carry a $10,000 bond or trust. However, if your credit is good there are some companies that will put up your bond for you for a fee (normally $500 to $700 per year). The form filed with this is BMC-84 or BMC-85.
  3. Processing Agent – This costs approximately $50, and is obtained by filling out form BOC-3.

So there’s a starter primer for you and now you know what a freight broker is and the relative initial startup costs should you wish to pursue this as a career.

Freight Brokers