If you’re entrepreneurial at heart, starting a freight shipping business may be a solid option for you and your future. What is this? Freight brokers are the middlemen in the transportation arena. Although that may not sound flashy, they provide a needed service. One person, with the right start, could become a freight broker. You might look at a freight broker training course to get you started. But, before you officially start training, you should be aware there are four things that are necessary to be licensed as a freight broker.
GET A DEPARTMENT OF TRANSPORTATION NUMBER
The first thing to do, is to apply for a United States Department of Transportation number. It isn’t directly needed to start a freight shipping business, but it is necessary for the next step in the process.
GET A BROKER AUTHORITY LICENSE
This license is issued by the Federal Motor Carrier Safety Administration (FMCSA). It licenses a person or a company to conduct business as a freight broker, just as you would need a license to practice law or to be a commercial pilot. The specific form to be completed is MFCSA form OP-1. You must have a U.S. Department of Transportation number, which you should have already received. There is a $300 fee for this license.
GET INSURANCE
In the case of becoming a freight broker, this insurance comes in the form of a surety bond or a trust fund. This insurance is for the shipping company’s benefit and guarantees they will be paid for any cargo space. If the person or company shipping the freight does not pay, the freight broker is held responsible, and in cases where the freight broker cannot pay, this trust fund or surety bond is there to absorb the cost. This surety bond or trust fund must contain a minimum amount of $10,000.
GET A PROCESS AGENT
There is always legal documentation. For starting a freight shipping business, a person must register with a process agent for each state in which they will operate. This is also done with the Federal Motor Carrier Safety Administration. What is a process agent? He or she is an agent who acts as legal representative in a particular state. This also requires a form, called BOC-3. There is only a filing fee of $50 for this form.
These are all direct steps in order to become a freight broker. First and foremost, research is needed to get the ins and outs of what it means to begin any new career.