A freight broker acts as an intermediary between those needing shipping services and those providing them. A US freight broker license is required, which can be obtained through education, working under a licensed broker, or self-study. The process involves filling out an application, obtaining a carrier number, obtaining a $10,000 escrow, choosing process agents, and waiting for approval from the FMCSA.
A freight broker is an entity that acts as an intermediary, setting up services between people or businesses in need of package shipping and businesses that provide shipping services. Essentially, they help trucking companies fill their trucks and make money doing it, and they help people with items organize shipping, fees, and terms. A broker can be an individual or a business, but either way, a US freight broker license is required; requirements and procedures may differ in other countries.
Education is often the first step in acquiring a freight broker license. Many prospective brokers enroll in training programs to learn what they need to know in order to become licensed and operate as a freight broker. Some of these training courses are available online. Interestingly, formal education is not required to obtain a license. A person can learn what they need to know by working under a licensed freight broker or even by reading books and manuals.
Once you have a solid understanding of freight brokerages, the next step is to apply for a license with the FMCSA (Federal Motor Carrier Safety Administration). A potential freight broker can do this by filling out a Carrier and Broker Authority Request form and paying the follow-up fee; this application is available on the FMCSA website. Once this form has been completed, submitted and paid for, the prospective broker will have to wait to be assigned a Carrier Number. He cannot complete the rest of the freight broker license application process without this number.
After receiving your carrier number, the potential broker’s next step is to obtain a $10,000 escrow for your business. He will have to provide proof of affiliation with the FMCSA. The freight broker must then choose process agents for each state in which it plans to do business by completing a Process Agent Designation Form and paying the required fee for each agent. The process agent is configured to assist the freight broker in case of legal action in the state of the process agent.
Once these steps are completed, the prospective broker simply has to wait for the FMCSA to process and approve. This can take four to six weeks to complete.
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