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The Surety Bond Blog

10
Feb
2014

3 Reasons to Start a Freight Broker Business in 2014

Thousands of freight brokers have felt the effects of MAP-21 (Moving Ahead for Progress in the 21st Century Act) since it went into effect on October 1st, 2013; whether they had to adjust to new requirements or leave the freight broker business altogether. However, if you’ve ever considered starting a freight brokerage, this could be a great time to gear up and start your own business due to three reasons.

 

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Reason #1: Decreased Competition

If you choose to start a freight brokerage in 2014, you’ll be competing with a much smaller number of brokers in the industry. When you compare the active licensed freight brokers in the FMCSA database for this year and last, that number is down from about 21,000 in 2013 to approximately 13,700 in 2014; that’s a huge 34.8% decrease. The major cause for the surge of freight brokers leaving the industry are the increased requirements they must meet in order to operate legally.

Reason #2: Improving Economy

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Although there is still room for improvement, the U.S. economy has recently shown slow and steady growth. Economic growth  is a great sign for anyone considering taking on the challenge of starting a small business, and may be just the incentive they need. It will be easier to get your business established in the current freight broker industry and economic conditions if you decide to start a freight brokerage in the near future.

Reason #3: Affordable $75K Surety Bond

Even though thousands of freight brokers had trouble finding a $75,000 surety bond with reasonable premiums and terms, programs do exist. There are affordable surety bond programs available to many current and aspiring freight brokers that don’t require huge premiums, thousands of dollars in collateral or require business financials which can cost thousands to have prepared. Whether you’re interested in starting a freight brokerage, or you’re a current broker who desperately wants to keep their license and stay in business, there are bond agencies that offer freight broker bonds at reasonable costs:

• A+ rated, Treasury-listed surety
• No collateral
• Lowest rates in the country
• Approvals with good or bad credit
• 99.9% approval rate

 

 

Apply for a freight broker bond directly on our website to get an instant approval.

Comments (6)

Category: Commercial Bonds, Freight Broker Bonds

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6 Responses

  1. How do you intend on finding trucks once you book the load if you have no assets to back you—i think that is something you seriously need to consider in this current market place.

    1. Hey Brad,

      Unfortunately, I can't provide detailed advice on freight brokering itself. I can only provide information on the freight broker surety bond.

  2. Brad,
    It is easy to get surety bond but very difficult to make contact with a new customers, otherwise freight brokering is not hard to deal with it is a fun job

  3. Ideally, freight brokers would have freight experience and therefore would have contacts that include both customers and carriers. Sometimes problems do arise when real estate brokers and folks without any experience or relevant information in freight business think they can make a quick buck in freight brokerage and thereby hurt the reputation of brokers in general. I am not saying a real estate agent or others without freight experience are not capable as I am sure they are. It would be nice if all freight brokers quoted freight as if they were paying the operating costs as an owner operator to ensure rates are not cut below a living wage for those that actually do the hard work of delivering the freight. When trying to get the freight, those wanting the "quick buck" will begin by cutting rates to woo the shipper rather than sell them on the expertise and safety of their carriers. I feel that type of business model is detrimental to everyone in the transportation business. It is just my opinion and I I do not mean to offend anyone; I is just what I have historically seen happen during my 15 years in freight operations in general.

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