Freight Brokering - Still a Viable Home Based Business?
Posted: Monday, January 11, 2010
by David Patrick Lee
http://www.WorkwithDavidLee.com
Freight brokering is purely the undertaking of putting together the requirement for the travel of freight for a shipper or client, with a trucking company or motor carrier.The person that does this for a livelihood is identified as a freight broker. The business itself is quite enormous. Think about it, most everything that you come in contact with on a every day basis was carried at one time or another by a motor vehicle.
Generally most goods can be transported in a dry van, on a flatbed or in a refer (refrigerated trailer). The movement of cargo and freight across the countryside, comes together with it tremendous trustworthiness and those liabilities can be unusual depending on which type of trailer carries the goods. passage of commodities into other countries is commonplace these days but requires a totally distinctive skill set to have a shot.
A motor carrier or trucking company can consist of 1000 trucks or a "mom and pop" two truck operation.The truck drivers themselves can be actual employees of the motor carrier or can be what is called an owner operator, which means they utilize the said "Company's DOT authority" to run under.
Freight brokering requires that you get paid a commission for putting the matching your customer's freight with a truck to transport it from point a to point b.An international shipment or truckload may be put on and ocean liner, rail or in the air and involve so much more than the average cargo as for you're dealing with other countries customs departments, etc
The area of our administration which oversees freight brokering is the Federal Motor Carrier Safety Administration, which is a part of the Department of Transportation or DOT. You don't have to pass any tests or be licensed to be in freight brokering. Give it time though, I'm sure our lawmakers are forever looking to make additional tax monies for the coffers.
to begin with for most persons starting out in freight brokering, it's a culture shock as soon as they recognize how much "cold calling" is implicated to acquire the business. Many fail because of this and frankly numerous motor carriers looking to bring on freight brokers as agents merely don't share this information either. several just cast them up against the wall to find out what sticks.
In freight brokering there is quite the procedure amid initially getting the order, to doing a detailed credit check on customers to verifying the motor carrier's credit rating and safety records as well. The expenditure for all of this can get quite exhorbitant if you're not assiduous. Locating trucking companies with satisfactory credit and safety records is becoming increasingly hard as well.
Once again doing credit checks and safety checks can become labor intensive and steep. The broker must insure the motor carrier has insurance, authority from the DOT and the lawful status to haul cargo in this country.
Freight brokering "authority" requires you have to provide evidence you have your MC# (motor carrier number), a BOC-3 (legal agent permit), which shows the freight broker has deliniation in our 48 states, a surety bond for $10,000, and the UCR (the Unified Carrier Registration).
Trucking companies keep cargo insurance as security for the property but a few loads these days are "high value" and necessitate addtional insurance. a lot of customers insist on that the freight broker have contingent cargo insurance which is just an additional cost in freight brokering. This would cover your assets would not be affected, but is an further cost for you.
Changes in the trucking business and freight brokering have been countless over the last few years One of the numerous changes includes the shippers and customers searching out the "one stop" shop called a 3PL or Third Party Logistics company. In today's environment, shippers are seeking them out in droves.
These companies perform as a one stop shop for the shippers and typically undertake over all of their supply chain management functions, including integrated software's and operations, warehousing and trucking services that can be scaled and custom-made to the customer's needs based on market circumstances and the demands and delivery service necessities for their products and materials.
regrettably, this is making it increasingly problematical for the smaller freight brokers or the ones that have a one-man office out of their home. It's just too demanding for "the little guy"to compete directly against such sizeable operations and resources.
The existence of a lone freight broker working out of his home office and making $60,000 to $90,000 annually are just about gone. In this terrible financial system, the room for profits are diminutive and getting smaller. And don't overlook the always present fuel dillema and the recent entry of the 3PL taking over the industry. To especially be doing well as a freight broker today, you would need to have a brick and mortar business, with salespeople, office employees and dispatchers. As you can see the costs of this kind of venture would be huge.
Learn How I Replaced my freight brokering business INCOME working half the hours. You will want to learn as much as you can before getting involved. Visit the following link and you'll be taken to You Tube and you can watch our video on Freight Broker Training video from an industry expert.
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