How to Become a Freight Broker with No Experience

September 20, 2022
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A freight broker career holds the potential for great pay, commissions, benefits, and even the ability to work from home. In addition, and perhaps most importantly, these shipping experts are in-demand—with the job market showing no signs of slowing down. 

Zippia projects a 7% growth in this career between 2018 and 2028, which is expected to result in an additional 32,400 freight broker jobs in the U.S. The best part is that you can get started in this career without any experience (or post-secondary education). 

From optional training programs to how to get a freight broker license to freight broker insurance, keep scrolling for everything you need to know to become a successful freight broker.

 

Duties and Responsibilities of a Freight Broker

 

A freight broker's main job is to facilitate and oversee the movement of cargo from its starting point to its destination. This shipping professional is essentially the middleman between whoever needs to ship the freight (the shipper) and those with the means to ship it (shipping companies, trucking companies, etc.). 

One perk of being a freight broker is the limited liability as they never come in physical contact with the cargo. Many manage most of their tasks from the comfort of an office.

Freight broker duties and responsibilities include: 

  • Facilitating and overseeing the movement of freight from pickup to drop off.
  • Using negotiation skills to broker deals with shippers and freight services.
  • Tracing and tracking shipments, effectively dealing with any losses or damages. 
  • Optimizing shipping time through route analyses, detecting any inefficiencies.
  • Helping truck drivers maximize loads to avoid deadhead miles. 
  • Following all industry requirements and legalities, including getting a freight broker bond and freight broker authority.
  • Keeping up to date with broker registration and all regulations laid out by the Federal Motor Carrier Safety Administration (FMCSA).
  • Tracking trends and changes in the shipping industry, logistics industry, and transportation industry. 
  • Carefully vetting transportation services, truckers, and other shippers for reliability. 
  • Finding freight transporters to take on cargo using load boards.
  • Sourcing new customers in need of broker services.
  • Seeking out new businesses to transport goods. 
  • Managing client relations.
  • Using freight brokering software.
  • Ensuring all paperwork is filled out, including carrier packets. 
  • Acting in the best interest of the freight brokerage business or freight brokerage that employs them. 
  • Implementing a marketing strategy, which may include cold calling and advertising on social media (for startup businesses or those running a freight broker company).
  • Doing basic accounting, such as invoicing and general bookkeeping. 

 

Freight Broker Salary

 

In the U.S., the average freight broker's salary is $53,372 + commission. Earnings will vary based on a variety of factors that include:

Location: The state you live in can significantly impact your salary. The 5 highest paying states for freight brokers in the U.S., according to Zippia and the Bureau of Labor Statistics, are New York ($66,730), New Jersey ($62,881), Michigan ($61,443), Alaska ($59,526), and West Virginia ($58,590).

The lowest paying states? Montana ($32,131), Louisiana ($33,335), Nevada ($33,845), South Dakota ($33,873), and Hawaii ($34,785).

Education: Those that hold a bachelor's degree in Business or Supply Chain Management and Logistics tend to make more than those without post-secondary education. Approximately 51 % of freight brokers have a bachelor's degree, 21% have an associate's degree, and 15% have a high school diploma (with the rest in the field varying from certificates to master's degrees).

Experience: Like most jobs, pay increases with years of experience. While entry level freight broker jobs pay less, these are the positions that you have the best chance of landing with little-to-no experience.

Commission: Most freight brokers have both a base salary and commission, while others only get a commission. Either way, earnings will vary based on how successfully you negotiate your rates. In short, you want to negotiate high with the shipper, and low with the transportation company as the difference is your commission (13% - 15% or the load's net revenue). We dive into specifics in the next section. 

 

How Does Freight Broker Commission Work?

 

A freight broker's commission isn't based on how big a truckload is. Instead, it's a percentage of the difference between the price the shipper pays and the shipping rate. According to a Freight Waves survey, the average commission is 13% to 15% of a load's net revenue.

Example:

A shipper pays $4,000 to a licensed freight broker to move a load. The freight broker negotiates $3,000 with the trucking company to transport the load, leaving $1,000 net revenue. If their commission is 13%, they will get $130.

$4,000 (shipper payment) + $3,000 (transportation cost) = $1,000 (net revenue)

$1,000 (net revenue) x 13% (commission rate) = $130 (freight broker’s take home)

 

What Are the Steps to Becoming a Freight Broker?

 

Becoming a freight broker with no experience (and perhaps no post-secondary education) can be a little daunting. However, the good news is that a few simple steps can set you on the right track to a successful career. Here is what you should consider. 

 

Step 1: Start Learning

 

Knowing and understanding the shipping industry and its logistics is essential to becoming a successful broker. Obtaining this knowledge will help ensure that you are genuinely interested in the field and help you gear your resume toward what recruiters want. 

You can find an abundance of information online (like this handy guide!). Once you understand what the job entails, you can start a freight broker resume. For example, say you had to be hyper-organized and highly communicative in your previous employment as a paramedic. 

While that was in a very different field, those skills you learned on that job are essential to becoming a good freight broker. In addition to articles, guides, and videos online, you may also want to check out forums on the topic. There you can ask specific questions to those in the industry and potentially make some connections. 

 

Step 2: Get Experience

 

There are a couple of options to get industry experience, including: 

Freight Broker School: There are many freight broker training schools that will help you learn the ins and outs of the industry. This certificate training not only shows potential employers that you are serious about this career but also loads you with the knowledge and skills you need to succeed as a freight broker. This includes running your own business, managing and sourcing clients, understanding transport management systems, etc. 

Similar Jobs: Those that like to learn hands-on can gain experience doing a job in the same sector before diving into freight brokering. Similar careers in the freight industry that deal with many similar daily tasks and responsibilities include freight dispatcher, freight broker agent, truck broker, process agent, and freight forwarder. Becoming a truck driver can also give you first-hand experience of what it's like delivering cargo. 

 

Step 3: Apply to Freight Brokerages (or Create a Business Plan)

 

Get that resume polished and start sending it out. Remember, even if a job requires a bachelor's degree and you only have a broker training certificate, apply anyway. Often job openings don't get enough applicants, and recruiters have to overlook some of their original desires. 

Contrastingly, a business plan is a must for those who want to work for themselves. This plan should address everything from the goals of your business to your start up costs to your marketing strategy. A few key items that you will want to think about include:

Business Structure: Are you a sole proprietorship, partnership, limited liability corporation (LLC), or corporation? The Small Business Administration (SBA) provides a framework for these different structure options.

Financials: What are your current and projected financials? What are your startup costs? How will you pay those initial costs (line of credit, savings, investors, etc.)? What's your potential revenue and break-even point?  

Target Market & Competition: Who are your potential clients? Are there other brokerages targeting the same clients? 

Marketing: How will you reach out to potential clients? Are there directories that can help? Where will advertising be most effective (social media, billboards, cold calls, etc.)?

 

Step 4: Register for Your Tax ID Number 

 

You'll need to register with the IRS to get your tax ID number if you are starting your own business. Generally, you do so after you've figured out your business name.

 

Step 5: Apply for an MC Authority

 

You will need a motor carrier (MC) number in order to make any freight broker business legal. The first step is getting a pin from the Federal Motor Carrier Safety Administration (FMCSA) of the U.S Department of Transportation. From there, you can submit an online OP-1 application for your MC Authority. It takes about 4 to 6 weeks to process and will be mailed to you. 

If you also decide to be a carrier and work in interstate commerce, you will need a USDOT number (form MCS-150).

 

Step 6: Get Insured and Bonded

 

You should consider general liability insurance or contingent cargo to protect yourself and your clients. For freight brokers that also operate as freight forwarders or carriers, this is a non-negotiable. 

Additionally, freight brokers need a freight broker bond (BMC-84 bond or BMC-85 bond) to get licensed. This $75,000 bond reimburses customers if you fail to uphold the terms in your contractual agreement. It costs most freight brokers between 1% and 10% each year to obtain this bond—between approximately $750 to $7,500 a year. The rate you are able to secure is based on your credit, bond history, and professional experience.

Note: There are many differences between BMC-84s and BMC-85s, so it's essential to understand which one you need. A good bond company can help you navigate this step with ease if you have any confusion. 

Learn more about how to ensure you choose the proper bond company.

 

Step 7: Find Processing Agents

 

You will need a processing agent for each state in which your brokerage company will operate. The FMCSA's list of firms who provide processing agents is a great resource. Alternatively, you can get someone to work directly for you since freight broker agent training is readily available. 

You will need to fill out Form BOC-3 for this step. 

 

Step 8: Get Your Unified Carrier Registration

 

The final step in the legal process is obtaining your Unified Carrier Registration (UCR). In most states, you can register online through the UCR application website.

Check out our blog, How to Become a Freight Broker, for more information and FAQs. 

 

How Long Does It Take to Become a Successful Freight Broker?

 

It takes about 2 - 5 years to become a successful freight broker.

Keep in mind that "success" is a term that means something different to everyone. Is it how much money you make in a year? How many clients you land? Your personal growth? The estimate of 2 - 5 years takes into account training time, and the period it will take you to settle into your new career. 

Like most professions, the longer you are immersed in the field, the more comfortable and knowledgeable you will become. For freight brokers this often translates into securing more clients and making larger commissions!

 

How Much Does It Cost to Become a Freight Broker?

 

It costs around $5,000 - $10,000 to become a freight broker.

There are many costs to consider when starting out—and they add up. This includes training, broker license registration, software, equipment, and your insurance and surety bond (to name a few). 

Keep in mind that the initial start up costs may be steeper than in some professions. But the opportunity to recoup that money is also good. Additionally, working for an existing brokerage can cut your costs dramatically.

For a monetary breakdown of each expense, see our guide: Cost of Becoming a Freight Broker.

 


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