I WANT TO BE A BROKER

What is a property broker?

This is a term established by the FMSCA - Federal Motor Carrier Safety Administration.  FMSCA is a division of the U.S. DOT - Dept. of Transportation.  A licensed individual or companies who are to help the shippers find carriers to move their freight.

What the requirements of FMSCA to be a property broker?

The property broker must obtain a "Surety Bond" with an approved bank or insurance company and maintain a "Process Service Agents" in all of the 48 states.

What is a Surety Bond?  Each company must prove they are capable of paying the carriers, owner operators, airlines, railroads and any other entity being used by the broker.  The individuals credit and/or financial strength will be investigated and only then will a "Surety Bond" be issued. 

Sometimes individuals can not obtain a surety bond why?  The broker is fails to pay the transportation company - the bonding company must pay.  So their are careful on who they bond.

There are over 15,000 licensed transportation brokers in the U.S.  Freight brokers account for over #40 billion in revenues in this industry.  Half of them are full time business.

Must a Broker carry cargo and liability insurance?

By law, a broker is not required to carry cargo or liability insurance.

What do I need to be a Broker?

Computer, telephone, fax machine on separate phone line.  File cabinet, file folder, hanging folder, etc.

Will have to have:  "Broker Authority" through FMCSA - Cost $300.  Must fill out a OP-1 and file the Authority.  A "Surety Bond or Trust Fund" - obtained through your local bank or bonding company.  Cost:  Will vary depending on your credit history.  From $500-$10,000.  Works like an insurance policy.  Must fill out either a BMC 84 or BMC 85.  Depending if you obtain a bond or a trust.  A "Processing Agent" - Cost: about $50 so if you ever have a lawsuit filed against you.  A lawyer from that state will call and inform you of the claim.  File a BOC-3.

Can I work from home?

YES! If the prefect place to have a small business.  This help keep your expenses down and get more tax deductions.  Keep track of all receipts!

How long does it take for the business to take off on an average?

Usually 1-6 months to show a profit.  This business is based on your determination and the time you put into it.  What kind of shippers you get and the freight they give you.  How many loads they give you and what do you sell them for.

A full time broker can make an average of $30,000 to well over $200,000 a year.  It's unlimited according to your efforts and how focus you are on doing your job.

Differences between Broker and Agent?

Broker: owns his/her own business and must obtain all of the necessary documents to get started. They keep all that is earned. They general do all the AP/AR and usually carry most if not all the responsibility.   Agent:  works under a broker and is paid a percentage of the earnings.  An agent does not have to carry any license or bond in order to work under a broker. 

How do I find customers?

Publications, Associations, References from shippers your already using, internet and more.

If I decide to be a broker what should I do?

Don't get in the brokering side of this business if you don't have any experience.  You will hurt yourself and others financially.  You need to put away at least 3-6 months income - because it does take a bit to get the money to generate.  You will need additional funds to for start up cost.  Think it through before stepping into brokering!