Should I become a freight broker?

[Rookie at 53]

I am driving my own truck right now and I was told that I should become a freight broker as well as having my own authority. Should I get it or not? What is the advantage to having both? All help appreciated.

[Grumman]

Before getting your own authority, find the cargo first. Learn to find shippers and bill direct to them for retail rates. Develop a traffic pattern to bill retail at both ends. Leaving your domicile with retail outbound doesn't do you much good if you haul for wholesale coming back. As you develop retail customers you will have more freight than you can handle. Learn to broker out the excess. The most successful truckers are also brokers. A word of caution, learn to seperate the two so you don't place liability on the brokerage, where none should be.

[GMAN]

If you only run one truck, it would be difficult to also be a broker. On the other hand, if you are knocking on doors, it is much easier to cover a load that you cannot carry on your own truck when you also have broker authority. Unless you are good with sales, I would stick with the carrier side.

[shyykatt]

The husband wants me to become a freight broker (so he can get his own truck), and I'd work from home, getting his loads, etc. Obviously, I have a whole lot to learn about it, but I am considering it. I've only just begun my research; any tips? Thnx

[GMAN]

You don't have to become a freight broker to find and book loads for your husband's truck. Unless you want to find loads for other carriers you will be wasting a lot of money for broker authority and bond.

[Triple Digit Bob]

Originally Posted by GMAN

You don't have to become a freight broker to find and book loads for your husband's truck. Unless you want to find loads for other carriers you will be wasting a lot of money for broker authority and bond.

You don't have to be a freight broker if you are just using other brokers to find loads thru.However having broker authority might help in getting direct shippers and brokering out loads to other carriers. The first hardship to starting a brokerage is to find carriers for a load since new brokers don't have a credit history.

[Larry Heyns]

I think shippers will be leary of new brokers now that hackers broke into the FMCSA web site and changed the names and phone numbers of legitimate brokers and carriers.

Also, Transport Topics 11/24/08 page 2 reported that "freight brokers are preparing to wage a defensive battle next year to defeat federal legislation they believe is coming that would compel them to post their profit margins online for each load they arrange to be hauled. ...At least four versions of the Trust in Reliable Understanding of Consumer Costs Act were introduced in April and May... The freight brokers object to being forced to post all the pricing details on every transaction into which they enter... The brokers said theirs is a highly competitive industry, filled with price negotiations almost daily. ...Many TL carriers also broker freight, and even LTL carriers are getting into brokerage."

[GMAN]

I have not heard anything about hackers breaking into the federal website. I would expect these brokers to fight with everything they can muster to prevent more openness in the industry. Perhaps they should do like the Realtors and have a standard commission for the industry. Realtors have all pretty much had the same commission structure for years and I don't believe there is any legislation requiring them to do so. There are some honest brokers. There are also many who take way too much of the rate. Some will take 40-50%. In most industries brokers either represent the shipper or buyer. In this industry they seem to only represent themselves. Some broker contracts have language which states that they represent the carrier. If that is so then they should have a fixed commission or fee stated in the contract. The carrier should also be entitled to see any freight agreement the broker has with the shipper. In fact, if the broker represents the carrier then the contract should actually be between the carrier and shipper. You need to read those contracts very carefully. I don't know we need the government to get further into our business. Then again, it would be interesting to see some of the real numbers with which these brokers are dealing.

[GMAN]

Originally Posted by Larry Heyns

... The freight brokers object to being forced to post all the pricing details on every transaction into which they enter... The brokers said theirs is a highly competitive industry, filled with price negotiations almost daily. ...Many TL carriers also broker freight, and even LTL carriers are getting into brokerage."

If they all charged the same commission it would not be much of an issue as to what the other charged. Maybe a little disclosure would help. By the way, not all carriers who broker freight have broker authority.

[Larry Heyns]

Transport Topics published "Scam Artists Hit Brokers, Fleets" 11/17/08 page one. The article by Eric Miller refers to the "gaping security vulnerabilities in federal regulatory Web sites..." Two Russian immigrants were arrested for bilking an estimated 118 brokers and carriers, using load boards. A three-year investigation preceded the arrests, and the scheme totaled roughly $500,000 over just the past 18 months. "Probably the most common load board scheme involves fraudulent brokers and trucking companies accepting loads and then double-brokering them with unsuspecting brokers and carriers who never get paid for their services." "Web site operators and other monitoring firms work hard to keep track of the scammers, but the con artists are typically a step ahead of the legitimate businesses. It is not uncommon for the criminals to change their company information on the FMCSA Web sites every 10 days."

[GMAN]

I try to do business with the same people that I have done business with for several years.