Freight Brokerage Business. The Staff of Entrepreneur Media, Inc.

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      Since trucking deregulation in the 1970s, the number of shippers associations has declined significantly.

       • Import-export broker. These people are facilitators for importers and exporters (import brokers are also referred to as customhouse brokers). Import-export brokers interface with U.S. Customs, other government agencies, international carriers, and other companies and organizations that are involved in international freight transportation.

       • Agricultural truck broker. Generally small and operating in one area of the country, unregulated agricultural truck brokers arrange motor carrier service for exempt agricultural products.

       • Shippers associations. Shippers associations are exempt, nonprofit, cooperative organizations formed by shippers to reduce transportation costs by pooling shipments. Shippers associations operate in a manner very similar to that of freight forwarders, but their services are limited to their members and are not available to the general public.

      In a perfect world, of course, each entity in the industry would handle its traditional role and that’s all. However, the transportation industry is changing so rapidly that once-distinctive lines have blurred. Also, it’s quite common for a successful freight broker to expand his or her business by creating subsidiaries or additional companies that offer other freight services.

      Plus, while it’s not possible to fully automate a freight brokerage business, technology and specialized software (from companies like DAT Solutions, LLC, www.dat.com/products/broker-tms) are currently being used heavily by freight brokers of all sizes, so they can work much more efficiently when it comes to managing operations, accounting, document management, and analytics. Thus, a successful freight broker must understand how to best utilize the specialized technology that’s at their disposal to remain highly competitive.

      A key issue, say industry experts, is that legal definitions have not been challenged recently, so freight forwarders may be acting as brokers, and brokers may assume the role of freight forwarders. In the event of a cargo claim or nonpayment of bills, problems can arise when a company holds multiple authorities. The question becomes: Who was wearing what hat and when?

      • A Truck by Any Other Name

      The term “truck” is an umbrella word covering a wide range of equipment. Among the types of trucks you’ll need to be familiar with are:

       • Dry vans (non-refrigerated semitrailers)

       • Refrigerated semitrailers (or “reefers”)

       • Flats or flatbeds (flat trailers built to handle heavy loads such as metal and machinery)

       • Liquid tankers (trailers designed to carry liquid or fine bulk materials)

       • Ragtops (canvas-covered, boxlike trailers)

       • Containers (shipping containers used for freight carried on ships or trains)

       • Air-ride (trailers built to reduce road shock and designed to carry fragile items)

      tip

      As a freight broker, you’ll build your company on repeat business. If you do a good job, you’ll rarely have a one-time customer. Most shippers have routine, repetitive shipments that move around the country on a predictable schedule. As you become familiar with these shipments, they become easier to handle. To establish loyal customers and generate repeat business, not only must you master the skills related to becoming a skilled freight broker, you’ll also need to develop and polish your sales, problem solving, time management, and organizational and interpersonal communication skills.

      Clearly, pushing the proverbial envelope when it comes to services and operations has some definite risks, and you’ll want to carefully consider all of your options when setting up your business. If you’re new to the industry, nothing replaces the need for specialized training and real-world experience prior to working in this field as the operator of a freight brokerage. Without proper training and some real-world experience, you’re much more apt to make costly mistakes and destroy business relationships.

How They Started

      Ask a class of first graders what they want to be when they grow up, and you’ll likely hear things like doctor, firefighter, police officer, superhero, or lawyer; it’s highly unlikely anyone will say “freight broker.” So how do successful freight brokers get into the business?

      stat fact

      Trucks carry 94 percent of all furniture, fixtures, and appliances for the American home.

      Bill Tucker’s brokerage in Cherry Hill, New Jersey, has employed three generations of his family. His father founded the firm in 1961 by purchasing one of the few broker’s licenses still operating at the time. Years later, Tucker was working in the computer industry when his father passed away unexpectedly. At first, he and his mother decided to sell the business rather than shut it down, so he helped run it while looking for a buyer. But after several months without a realistic offer, Tucker decided that he wanted the company for himself. He worked out a deal to buy the company from his mother, and now his own sons work for him. “I’ve never regretted it because it has been a great business,” he says.

      After holding a variety of jobs in the transportation industry, Cathy Davis started MCD Transportation, Inc. as a consulting and commissioned sales agency in 1986, and obtained brokerage authority in 1991. After she passed away in 2002, her daughters took over the Smyrna, Tennessee-based company.

      • Working 9 to 5

      While it’s certainly possible to start a freight brokerage as a part-time business and gradually expand it into a full-time operation, this approach is not recommended. This is not a business where problems or issues can wait. You need to be accessible to your customers during regular business hours and often after normal business hours as well. If you’re not available to answer a question, solve a problem, or quote a rate when a shipper needs information, for example, they’ll likely take their business elsewhere.

      There’s also the image issue to consider. Whether it’s a valid perception or not, many people view part-time businesses as hobbies, and their operators as less than professional. Many shippers are not going to trust their shipments СКАЧАТЬ