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13 Steps How To Become A Freight Broker (Complete With Pictures)

( How To Become A Freight Broker - If you want to work in the exciting field of freight brokerage, you'll need to become licensed. Although this can be a fairly involved process, we're here to help you navigate the steps to make this dream a reality!

  • How to set up business

How to Become a Freight Broker: 13 Steps (with Pictures)

1. Create a business plan. Although it isn't mandatory to create a business plan first, it's a good idea. You'll be able to get a good idea of ​​the upcoming startup costs, and it will make it many times easier to obtain funding from banks and other lenders. Your business plan should include:

A summary of your business goals.

An overview of the industry, including your specific market and the factors which shape it.

An overview of your customer base. You've got to have some idea how you're going to get money. You should identify possible shippers and carriers. If you can't, at least identify how you will go about getting them. Try to be as specific as possible.

A section which identifies your competitors, their strengths and weaknesses, and how you will adapt and survive in their midst.

A marketing plan. Explain how you will tell possible customers about your business.

A detailed analysis of your financial plan, including startup costs, revenue projections, and the road to turning a profit.

How to Become a Freight Broker: 13 Steps (with Pictures)

2. Train. Formal education is not required by law to become a freight broker. Many freight brokers are ex-truckers or ex-agents who have worked for brokers. If you have the time and access to gain hands-on experience, you should seize the opportunity. Find a job as a truck driver, as a dispatcher at a freight forwarding company or in the warehouse of a logistics company.

Fortunately, there are alternatives for those who cannot spend several years in actual training. If that sounds like you, examine the freight broker training programs to see which one is right for you.

Since freight broker training programs are not accredited, it is difficult to assess their relative quality. To get an idea of ​​the reputation of a school you're examining, research the teacher's experience and check their rating with the Better Business Bureau.

How to Become a Freight Broker: 13 Steps (with Pictures)

3. Choose a name and business form. You need to choose a unique name for your business and decide what type of business form you want to take. Deciding what type of business form to adopt can be complicated and you can read a detailed report at Registering a Company. However, there are a few basics to keep in mind:

Sole proprietorships are the worst form of business unless you have so little seed capital that you cannot afford the registration fees for other forms of business. It's a bad format because it doesn't separate the company's assets and liabilities from your personal assets. This means if your company loses a lawsuit, the party you owe money to can seize your personal property to fulfill the judgment.

A corporation is the most expensive form of business, but offers the best protection against liability, perpetuity and the easiest access to capital.

A limited liability company, or LLC, combines many of the good qualities of sole proprietorships and corporations. Like a sole proprietorship, they are relatively inexpensive to register. Like a company, they offer some protection from liability.

How to Become a Freight Broker: 13 Steps (with Pictures)

4. Register with the secretary of state's office. Once you've picked out a name and business form, you'll need to register with the secretary of state's office wherever you've decided to mate. They will check to make sure that you aren't using a name that's already taken and examine your articles of incorporation, among other procedural steps.

There is always a filing fee for registering a business, and the fee varies substantially from jurisdiction to jurisdiction. You can find out what the fees and procedures are at any of the fifty secretary of state websites, which can be found at

How to Become a Freight Broker: 13 Steps (with Pictures)

5. File for an Employer Identification Number (EIN). You'll need to identify what type of business form you're taking, principal officers or partners, and identifying information like the address of the business.

Applying to an EIN is a quick process, and you should be able to complete it in fifteen minutes or less. However, you'll have to complete it in one session; there's no saving your work. Apply at

How to Become a Freight Broker: 13 Steps (with Pictures)

6. Find reliable carriers. It's a good idea to establish relationships with some reliable carriers before you actually go into business. If you're already experienced in the business, this probably won't be difficult. However, if you are new to the business, this might be more challenging.

A great way to network with others in the industry is to join the Transportation Intermediaries Association (TIA). Members get access to a directory that rates and lists airlines, making it an invaluable resource for a new broker.

How to licensing new business

How to Become a Freight Broker: 13 Steps (with Pictures)

7. Submit an application for a USDOT number. Registration with the Department of Transport is the first step in obtaining a license. All you need is your EIN, the names and addresses of company officers and your Dun and Bradstreet (DUNS) number if you have one.

The registration fee is $300 and you can register at

There are two steps for registration and licensing. The first is given the USDOT number and the second is given the Motor Carrier Operating Authority. Although these are two separate steps, complete them through the same portal at

How to Become a Freight Broker: 13 Steps (with Pictures)

8. Pay for a brokerage bond. A broker bond is a type of surety bond, which is a financial arrangement that works like insurance to get a job done. You need a guarantee of $75,000 or more, which costs between $1,500 and $4,000 per year depending on your credit rating. There are numerous companies that sell surety bonds, but you should make sure you find one from a financially strong company. Rating organizations such as Moody's, Fitch and Dun and Bradstreet are all well respected and all use a simple alphabetical scale, with AAA being the best.

For example, if one of your carriers breaks down and they are unable to deliver the carrier's goods, the goods must still be delivered. This is where the bond comes into play. The guarantor company steps in and pays another carrier to deliver the shipper's goods so the job can be completed.

How to Become a Freight Broker: 13 Steps (with Pictures)

9. Find an insurer. You will also need an insurance policy to act as a broker with most major airlines. Some types of freight broker insurance are specialty products, while others are not. You can buy them separately through multiple insurers or all bundled through a specialty insurer, but you'll need at least two types.

One type of policy required is called contingency insurance and covers any gaps in the carrier's insurance policy. For example, if a carrier causes damage to another, but the carrier's insurance is not comprehensive enough to cover the damage, the injured party can sue you. This policy covers your defense costs.

You will also need a public liability policy. Although the premium and offer are specific to you, it is not a specialty product and you can purchase it from most major insurers. You can also get it through the same insurer that issues the contingency policy.

As with purchasing any type of insurance, you should obtain multiple quotes, check the insurer's financial ratings through a rating agency, and inquire about possible discounts from bundling.

How to Become a Freight Broker: 13 Steps (with Pictures)

10. Apply for a carrier license. Finally, you can apply for the license or MC authority. All you have to do is submit the documents proving your liability and insurance through the portal at There is no additional fee.

  • How to get business off the ground

How to Become a Freight Broker: 13 Steps (with Pictures)

11. Save or borrow seed capital. As with virtually any business, a freight brokerage requires a certain amount of seed capital to get started. With the business plan you already have in place, you should have a good idea of ​​how much you will need to get up and running.

You should have at least $10,000 to start with, either in cash or through a line of credit. Liquid funding is more important to a freight broker than most startups because the broker often pays the carrier for the shipment before the shipper pays the broker.

How to Become a Freight Broker: 13 Steps (with Pictures)

12. Buy equipment. A new freight brokerage company will not require many assets beyond what an ordinary office would require. You will need computers, printers, fax machines, copiers, a landline phone, a cell phone, high-speed internet and freight brokerage software.

The software allows you to automate many functions, track your drivers and generally be more productive. There are many software programs out there, but Tailwind, Broker PRO, and Freightview are all highly rated.

How to Become a Freight Broker: 13 Steps (with Pictures)

13. Market your business. Finally, you need to let people know you're open for business. Implement the marketing strategy you developed while creating your business plan and add any appropriate tweaks.

A great way to get into business and build your reputation is by using online shipping services.,, and Direct Freight Services all operate online marketplaces where you can find truckers at your convenience.

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