How to Get a Freight Broker License in North Carolina

When it comes to shipping and supply chain logistics, freight brokers are a hugely important link between their clients, who are shipping the goods, and the shipping companies themselves.

Working for a wide range of customers, from smaller SMEs (Small and Medium Enterprises) to larger international businesses, a freight brokerage is a vital intermediary who is responsible for negotiating contracts, obtaining insurance certificates, filing all necessary paperwork with government agencies, and tracking shipments on behalf of their clients.

If you want to enter the fast-paced world of freight brokerage and are based in North Carolina, your first step needs to be to obtain a freight broker license NC. In this guide, we'll walk you through the process of applying for your license, from what the various pre-application requirements are to what forms you have to fill in.

Licensing Requirements to Become a Freight Broker in NC

The first step to obtaining a freight broker license NC is to make sure that you meet all of the required perquisites in advance. In order to apply for your license, you must be:

• A minimum of 18 years old
• Have a clean credit record
• Have access to a surety bond or trust fund agreement to a minimum of $75,000
• Have a business registered in North Carolina
• Be able to pass a criminal background check successfully
• Must also submit proof of the fact that they have acquired liability insurance coverage of an amount between $750,000 and $5 million

Making sure you are able to meet these requirements in advance, and be able to supply proof of them on your application forms, is a great way to streamline the application process.

Step-by-Step Guide to Obtaining a Freight Broker License in North Carolina

If you're worried that the process of applying for a freight broker license NC is going to be difficult and long-winded, don't be! The process is actually fairly straightforward, and, to make things easier, we've slimmed it down to a step-by-step guide for you to follow:

1. Apply for your U.S. Department of Transportation (USDOT) number 

The first step in your application to become a licensed freight broker in North Carolina is to apply for your U.S. Department of Transportation (USDOT) number. Your USDOT number is a unique identifier for you and your business and is issued by the Federal Motor Carrier Safety Administration or FMCSA. You'll need your USDOT number to complete the next stage of your application.

2. Apply for your license with the FMCSA

The next step is to complete the required forms from FMCSA (federal motor carrier safety administration) Forms MC-1 and OP-1 are required and can both be found and completed online on the FMCSA website. When you submit these forms, you will also have to submit a $300 application fee simultaneously.

3. Provide proof of your liability insurance

As part of filling out your FMCSA forms, you will need to provide proof that you have the required level of liability insurance. Since you hopefully arranged this in advance, all you need to do is provide the relevant documentation as evidence.

Freight Broker Bonds vs. Insurance

Freight broker bonds protect shippers/motor carriers, not freight brokers.However, freight broker insurance does protect freight brokers. 

Many new freight brokers that invest the bare minimum on insurance coverage quickly realize they are disqualified from working with larger shippers. Each year, more freight brokers are pulled into litigation, and ultimately go out of business due to huge judgments and legal fees they can’t afford.

Although insurance is not required to operate, the most important reasons to have it in place are to:

• Protect your bottom line
• Create increased security around your bond, and avoid leaving yourself open to paying legal fees by not purchasing insurance.
• Increase top line: by having insurance, you become more attractive in today's marketplace to shippers and wholesalers.

Freight Broker Insurance Types

There are several types of insurance coverages that are recommended for freight brokers; please see the list below:

• Business owner’s policy (BOP)
• General liability
• Workers' compensation
• Commercial auto
• Professional liability/errors and omissions (E&O)
• Contingent cargo
• Contingent auto liability

If you’d like to learn more about all of the insurance coverages available to you, please read our freight broker insurance guide.

4. Submit proof of your surety bond or trust fund agreement

The final step in your application is to submit a freight broker bond or trust fund agreement to a minimum of $75,000. Having the correct documents on hand can make this process simple and easy.

5. Appoint a North Carolina process agent

The last step in the freight broker license application process is to appoint a North Carolina process agent. Your process agent is an individual or corporation with a physical address in North Carolina who is able to receive legal documents on your behalf. You'll need to fill out form BOC-3 to appoint your North Carolina process agent.

Once you've taken the steps above, you can submit your completed forms with the required documentary evidence, and your application is complete. However, there is one more step that it's essential to take to give your startup freight agent business the best chance of success, taking a freight agent training program.

Freight Broker Training and Certification Programs in North Carolina

While you are not federally mandated to attend freight broker training programs or certification programs in order to apply for your freight broker license NC, there is a wide range of benefits associated with enrollment. 

In order to be effective, transportation brokers need to keep up with all aspects of transportation law, as well as have a firm grasp of subjects like contract negotiations, key industry regulations, transportation regulations, logistics, and more.

Attending freight broker schools can help you make the best of your new business by giving you a firm grounding in essential skills, such as record keeping, supply chain management, and customer service.

By enrolling yourself in the freight brokerage training courses offered by institutions such as local community colleges, the University of North Carolina, or specialist organizations such as Brooke Transportation Training Solutions, Global Precision Logistics, and Freight Broker Boot Camp, you can also get a head start on networking and potentially make valuable early contacts for your business.

From valuable networking opportunities to the best way to build a firm grounding in current trends in freight brokerage, opting to complete a training course as a startup freight broker agent is the best way to ensure you have everything you need in place to become successful.

Career Growth and Salary Expectations of a Freight Broker

According to the U.S. Bureau of Labor Statistics (BLA), the average freight broker salary is $56,109 per year in North Carolina. However, the average salary is impacted by various factors, with one of the most important being location.

To help you get an idea of where in North Carolina to base your business, we've listed the major transportation hubs below and their associated average annual salaries:

 

 

Career growth for freight broker jobs continues to be positive, with the need for increasing national and international shipping levels creating a demand for qualified freight agents.

FAQs

To give you the clearest possible understanding of how to become a freight broker, we've put together the following FAQs:

Q: How Much Does It Cost to Become a Freight Broker in North Carolina?

A: The basic cost associated with obtaining a freight broker license in North Carolina is the application fee of $300. However, there are other costs to consider, such as the cost of insurance, your freight bond, and the expense of setting up a business and hiring a process agent.

Q: How Long Does It Take to Become a Broker in North Carolina?

A: While there is no discreet timeline for obtaining your freight broker license in North Carolina, the process usually takes three to six months from application to you receiving your license.