Brokering freight from home can be a lucrative business for an entrepreneur. The process involves matching shipper loads to authorized carriers, for which you earn a commission. Running a freight brokering service begins with formulating a business plan and obtaining the requisite authorizations. Building a good network within the freight industry and marketing your service can help to grow your business. When you work from home, a disciplined approach that separates family time from business time is crucial for success.
Choose a niche for yourself on the basis of load size or type of cargo or delivery location. Consider your area of expertise or interest in working with freight. General commodity freight does not require special skills whereas dealing with freight related to perishable items, large sized loads, hazardous materials and heavy equipment will require some level of expertise. Study the market requirement for the service you are seeking to provide and choose your niche accordingly.
Obtain the necessary legal authorizations to begin operating as a freight broker. This will include a Broker’s Authority, a surety bond or trust fund and a Processing Agent Form. Visit the website of the Federal Motor Carrier Safety Administration, download the forms for these documents and submit with the prescribed fee to obtain permission to begin your freight broker business.
Prepare a business plan and approach your bank to request for a major line of credit. In the initial stages, you will need to pay the freight carriers but you will receive payment only later from the shippers. Therefore, maintain a good credit record and build up a rapport with your bank to obtain a line of credit. Make your business plan credible enough for the bank to see benefit in extending credit to you.
Find a reliable carrier by checking with freight directories. Visit a few truck stops and look for well-maintained trucks. Find out the truck company details from the information posted on the truck or by speaking to the driver. Ask others in the freight business for references to dependable carriers. Contact the carrier and work out an agreement regarding loads and payments.
Contact manufacturers, distributors and shipping yards in your area to introduce your freight brokerage business. Have visiting cards printed and use these to promote your business during local trade shows. Create a website to advertise your freight brokering business.
Set aside a portion of your home to use as your business office and equip it with a computer, internet connection, printer and all the stationery you will require to run your business. Don’t let the fact that you operate from home make you laid back. Set a routine for a definite number of hours or work every day. Avoid getting yourself into housework that eats into your business time. Keep your family time separate from your work time.
Complete your paperwork when a shipper calls you about a load. Send the load details to your carrier along with the rate of payment. Collect the signed document from the carrier and file it safely. Follow up with the carrier to monitor the pickup and delivery of the consignment. If possible, work out an arrangement for the driver to call you at the time of pickup and also after completing delivery.
Collect the original bill of lading and invoice from the carrier and make the necessary payment. Send your invoice to the shipper whose load has been delivered and collect payment for your freight broker service.
Study the Code of Federal Regulations to know what records you ought to maintain of each transaction. These records will have to be maintained for a period of three years and be accessible to either party involved in the transaction.
- Study the Code of Federal Regulations to know what records you ought to maintain of each transaction. These records will have to be maintained for a period of three years and be accessible to either party involved in the transaction.
Hailing out of Pittsburgh, Pa., David Stewart has been writing articles since 2004, specializing in consumer-oriented pieces. He holds an associate degree in specialized technology from the Pittsburgh Technical Institute.