10 Tips To Be A Successful Freight Broker!

Freight Broker

The transportation industry has seen a rapid influx of interest and growth over the last several years, and this includes the professionals who work as intermediaries between shippers and carriers, such as a freight broker.

Licensed freight brokers operate around the country in various markets, helping make the transport of goods a reality for their customers. Currently, more than 17,000 freight brokers work in the United States, either as independent businesses or as part of a team. Many use business license software to keep things operating smoothly.

However, not all freight brokers experience the same degree of success in their profession.

To be a successful broker, the following strategies are a must.

1. Gain Experience in the Industry

The first step toward building a successful career as a freight broker is to gain the necessary experience in the transportation or logistics industry. Freight brokers connect shippers and carriers, ensuring that loads are transported successfully and within deadlines and budgets to the best of their ability.

Some freight brokers gain this experience by working with a trucking company or as a truck driver, while others have previous work experience in logistics roles with small or large companies. This on-the-job training is an essential component of understanding what it takes to be a freight broker who is successful over time.

2. Understand the Business Costs

Although the cost barriers to begin a freight brokerage business are low compared to other industries, there are still expenses which must be calculated before becoming a broker. Freight brokers are likely to need a computer and a dedicated cell phone for business operations, as well as systems that help facilitate loads and connect customers to the process.

These expenses, coupled with the licensing requirements mentioned below, can range from a few hundred to several thousand dollars. Understanding these costs is necessary to ensure a broker is prepared to start and maintain the business.

3. Follow Licensing Requirements

All freight brokers operating in the United States are required to hold a valid license in order to comply with federal rules and regulations. The Federal Motor Carrier Safety Administration, FMCSA, charges a one-time fee for a freight broker license, and this registration must be done prior to working with any customers.

Fleet Management

Freight brokers must also secure a bond or trust as part of the business requirements, detailed below. Failing to follow through with these licensing requirements may lead to devastating results for a freight broker, such as the inability to get a license or bond in the future.

4. Know the Difference Between a Bond and a Trust

One of the licensing requirements for becoming a freight broker is having a bond or trust in the amount of $75,000. This requirement provides protection to the broker’s customers in the event business transactions do not follow federal guidelines. Claims against a broker’s business are paid by either the bond or the trust, and they can represent a significant cost to the broker.

A freight broker bond is the most common choice because its cost is calculated as a percentage of the total bond requirement. Brokers pay far less for a bond than they do for a trust, which requires a broker to place the entire $75,000 into a trust account up-front. Understanding these differences can save freight brokers money both initially and over time, allowing them to focus on other needs and expenses within the business.

5. Build Business Relationships

No freight broker is successful unless he or she has worked to cultivate business relationships over time. Some business connections come from networking with other transportation industry professionals, while others are sourced from previous jobs or employers.

6. Have a System for Communication

Successful freight brokers also have the right systems in place when it comes to communicating, not only with prospects and customers, but with business contacts. Communication systems come in many different forms, from e-mail and phone calls to texting or messaging applications.

Whatever the type of communication system used, successful brokers ensure they share relevant and timely information with customers and business partners consistently.

7. Use Technology to Your Advantage

Freight brokers who are successful also use technology to their advantage. Several different forms of technology exist, specifically designed to help brokers ease their business processes and automate tasks on a daily basis. Technology exists for scheduling, instant pricing, and business analytics, all meant to help brokers streamline their business operations over time.

8. Continuing Education

Although industry experience is one staple of being a successful broker, those who are able to maintain a profitable business allocate some of their time toward continuing education. Freight broker training schools operate throughout the country as well as online, allowing brokers to gain deeper insights into the business, the industry, and best practices.

9. Market the Business

Successful freight brokers understand that competition is high in the industry, and more licensed brokers are expected to enter the market each year. As this takes place, brokers must have a strategy in place for marketing their business.

Marketing efforts may include having a social media messaging plan, an e-mail campaign, or print or radio ads to entice new customers to connect with the brokerage. Some freight brokers also focus on networking with shippers and carriers at local events or through online forums to enhance their business reach.

10. Put in the Time and Effort

Finally, freight brokers must be dedicated to the business if they want to experience success to any extent. Brokers have the luxury of working as much or as little as they want, but those who are the most successful commit to a full work week to ensure they are meeting the needs of their customers each and every day. 

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Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.

Freight broker article and permission to publish here provided by Aaron Anderson at JW Surety Bonds. Originally written for Supply Chain Game Changer and published on August 22, 2019.

One thought on “10 Tips To Be A Successful Freight Broker!”

  1. Amazing tips for become successful Freight broker. I got some new information from this article. and i think this article will be very helpful to me in the future. Thanks for sharing!

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