How To Become A Freight Broker?


How To Become A Freight Broker?

Many people have responded to my previous post should I become a freight broker asking me questions about becoming a Three red barrels on a palletfreight broker. I thought it may be a good idea to give fair warning to everyone that becoming a freight broker is no easy task. In fact, I highly suggest working for a reputable logistics broker prior to trying to become one yourself! The barriers to entry, even with the new $75,000 broker bond requirement, are still fairly reasonable, yes, but the real difficulty lies with the day to day of running a successful brokerage company. Truthfully, it’s no easy task and there are so many pitfalls to navigate. Further, to get into the industry and compete with some of the larger brokers out there is very difficult currently.

Working For A Freight Broker First

Working for a freight broker as an agent or independent contractor before becoming a freight broker really is a smart move. You can learn so much about how a brokerage runs and what rules must be followed. Working with LTL carriers is like navigating a field of land mines. They have hundreds of pages of rules in their tariffs, and they’re very confusing and difficult. You can easily lose a whole months commissions with a single mistake on a load. You can get an idea of the rules involved and the consequences for breaking them if you search Google for carrier rules tariff and read them for one of the major carriers in the industry. This is what you’re up against on a daily basis!

Be Careful Who You Sign Up With

It’s also very important to be careful which freight brokerage you sign up with. I’ve seen some really one-sided contracts floating around these days that really require a lawyer’s assistance to understand. You have to pay close attention to what you’re signing up for. Many brokers try to stipulate that customers you bring in become theirs. This can be fine if you work for them for a short time or plan to stay forever, but if you build up a big following only to find out all your hard work was in vein, you may not be too happy! A broker certainly has to protect their interests but should be reasonable in their expectations as well. For instance, a good policy is to not demand exclusivity from an agent but instead encourage an open relationship between all parties. This way, as an independent contractor, you’re still free to grow your business in other ways and the customer has a choice as well. The broker can continue to service the client even after your relationship ends with them this way too. Everyone wins.

We’re always looking to bring on new independent contractors to work with us and do not demand an exclusive relationship from you. Feel free to contact us should you have any questions or if you’d like to join us.

 

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