So, is it possible to shift your career entirely to become a freight broker? You might be wondering if you need a set of skills or experience for it to work successfully.

It’s not uncommon for someone outside this freight industry to think it’s an easy move with minimum risks. Well, it has its fair share of perks, but it’s not entirely risk-free. You need to qualify for certain legal requirements, such as getting a freight broker’s license, financing your services, and bearing operational costs for it to run smoothly.

Let’s look into the important factors you must consider before starting your freight broker career.

Freight Broker

Freight Broker

A freight broker is a middleman in charge of logistics – the intermediary between companies that ship their products and the carriers or shipping agencies.

In other words, your job is to provide logistic support that is crucial for the shipper and the freight carrier. The broker’s job is to facilitate the transaction between these two parties.

To legally operate as a freight broker, one must hold legal authority from the Federal Motor Carrier Safety Administration (FMCSA). This process includes license costs, surety bonds, also known as fmcsa bonds, and other additional expenses, which we’ll reveal later in this article.

Freight brokers manage the costs and payments associated with shipping products and charge a fee to facilitate this service. Usually, brokers charge a fee slightly higher than the actual logistics costs, which is the source of their income.

To simplify it for you, if shipping something via a transportation company costs $1,020, you, as a freight broker, will charge the shipper $1,200, which is an additional $180. This is your profit as a freight broker after paying the truck company for their services.

Freight Broker’s Legal Requirements

It’s vital to talk about the costs of getting a freight broker’s license. We’ve broken it down into four basic costs:

1. Training Cost

This is the first thing you need to invest in to qualify as a freight broker. Training costs can vary depending on the route you take to facilitate as a broker. Look around to explore to find out whether you want to learn the traditional way, or just sign up for a workshop. Compare fees involved and decide accordingly.

2. Type Of Business

There are three different types of businesses in the freight brokerage industry, just like any other business. Sole proprietorship, partnership, or corporation. They all come with separate tax and documentation specifications. To learn more, you should seek advice from a business attorney to clearly understand how to set up your business legally. Check for state laws, too.

3. License Fee Or Broker Authority Application

The license fee depends on the category of your services. You must apply to the FMCSA to get a broker authority to get the license. The application must specify whether you want to serve as a “broker of household goods” or “broker of property.”

Typically, it’s $300 for a single category and can increase to $600 for multiple categories. This fee needs to be paid to FMCSA for you to acquire a freight broker’s license.

In most states, online application is also available.

4. Surety Bond

The cost of a surety bond is $75,000 for a freight broker to operate legally. You don’t have to pay this amount out of your pocket; you can reach out to surety companies to help you finance this for a small premium.

The payment terms and amount will depend on your credit score with the surety bond company. The bond amount can vary between $1,500 to $3,000 annually, which needs to be renewed yearly. This fee works out to be between 2% to 4% of the total price of the surety bond.

Keep in mind that the terms of your bond must be taken very seriously. Any violation can lead to long-term penalties. You can be sued for not complying with their terms and conditions.

5. Process Agent

You must collaborate with a process agent for your brokerage contracts. They are responsible for looking after your legal proceedings. if there are disagreements between parties and claims from the court they will handle it on your behalf.

You must declare your selected process agent’s details by filing Form BOC-3 with the FMCSA for their record.

6. Register Through The Unified Registration System

Lastly, you must ensure you are registered with the FMCSA only through the Unified Registration System (URS). As the name implies, URS’s job is to compile all your information into one account, from registration to agents and legal form submissions. You can log in to their website and make an online application easily.

Once you have done that, you’ll be able to access all the essential information about your freight brokerage firm online. You’ll also have necessary state laws and regulations declared to you so that you are not missing out on anything important.

If you have more concerns, you should contact your state’s regulatory agency for guidance.

7. Operational Costs

Freight Broker

Setting up your freight brokerage firm demands more than just getting a license and signing up with the administrative bodies. You must also consider insurance, premises, and other additional operational costs.

You have to get a commercial space to start your new venture, which comes with many legal proceedings. You should speak to business law and tax officials to understand the requirements for you to operate legally and successfully.


The first steps of becoming a freight broker can be pretty simple if you follow all the steps adequately. However, becoming a successful one comes with additional responsibilities. It’s a competitive market, and you have to keep in mind that you will face new and complicated challenges.

As we mentioned, becoming a freight broker can be a fantastic career choice, but it does come with risks that make many brokerage firms close down within their first year of business. To avoid making such mistakes, you should focus on the quality of your service and brand image in the long term.

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