Dart Folk

The industry:

Freight brokers arrange for the transportation of cargo between shippers and motor carriers. Nearly everything you touch throughout a given day has been transported by a motor carrier. The industry is enormous. Most cargo is shipped with either a dry van, a refrigerated unit (reefer) or a flat bed. Cargo is shipped both within local markets as well as long distance and coast to coast.

Freight brokers, then, seek, identify and get set-up with shippers, manufacturers, growers and distributors who have cargo to transport and who rely upon freight brokers to find motor carriers.

Motor carriers may be either large trucking companies who hire their own employee drivers; or carriers may be independent drivers (Owner Operators).

A freight broker derives a commission for their matchmaking skills. Freight brokers are also known as “truck” brokers, “transportation” brokers and “property” brokers. And the brokerage industry can span not only trucks but air, rail and ocean liners.

Freight brokers are governed by the Federal Motor Carrier Safety Administration (FMCSA) of the Department of Transportation (DOT). There is no governing body other than these. There are no tests given to pre-qualify freight brokers.

What shippers are looking for:

Shippers are working within cost constraints. They often set the rate as to how much they will pay. Supply and demand sometimes dictate how much particular loads are paying. Shippers are looking for carriers who will move their cargo safely, efficiently and cost-effectively. And they are looking for brokers who conduct business honestly, reliably and with an excellent service-oriented mentality.

What carriers are looking for:

Carriers are looking for good rates. They also work within cost constraints. If motor carriers are knowledgeable about what their operating costs are it helps them remain competitive. Knowing what is needed to maintain equipment, pay personnel and make a profit can make the difference of making it or breaking it.

Consequently, a freight broker is required to use good negotiating skills to complete a “competitive” transaction whereby everyone is satisfied - shipper, carrier and broker.

What brokers are looking for:

Brokers may first locate shippers who have cargo to ship and then look to motor carriers to “cover” the load. Or brokers may have motor carriers on hand who are seeking cargo to haul. In either case, the broker wants to make a match or cover the load.

Initially, a broker will spend many hours on the phone searching for both shippers and carriers. With experience, however, a broker learns to work pro actively where both shippers and motor carriers initiate much of the business.

This of course all depends on how well the broker performs. Getting both shippers and carriers to rely upon them is one of the primary objectives of the broker. This is when business starts to mushroom.

When brokers get set up with shippers the broker may need to do a credit check to avoid getting stuck with a poor paying shipper.

And before brokers work with carriers, the broker needs to pre qualify carriers. A carrier may be ready, willing and able to complete a haul; but the broker needs to document the carrier’s status - legal, insurance and operational.

Summary:

The business concept, then, is simple enough - a freight broker finds shippers with cargo, then finds carriers to transport the cargo and then makes a commission for making the match.

Freight broker opportunities and benefits offer work from home, low start up and overhead expenses, and minimal formal educational requirements. Tools of the trade consist of a computer, fax machine, telephone and file cabinet.

John D. Thomas, owner of Atex Logistics, Inc., provides low-cost, comprehensive freight broker training via telephone and internet. A free downloadable eBook entitled “Introduction to Freight Brokering” is available at http://www.atexlogistics.com