What to Consider When Becoming a Freight Broker

What to Consider When Becoming a Freight Broker

December 22, 2021

Freight brokers are instrumental in ensuring a variety of goods reach their destinations on a daily basis. With consumers’ on-demand expectations coupled with online buying behaviors, there’s no surprise that research indicates continued growth for the US Freight Market value to reach 13.78 Billion USD by 20281.

Considering the demand for freight brokerage in the logistics industry is on the rise, it might be time to start that transportation brokerage business and be on your way to your next career. If you’re considering becoming a broker or starting your owner freight brokerage, we’ve compiled a few tips to help you get started.

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What is a Freight Broker?

Acting as an intermediary between shippers, carriers, and a final destination, transportation brokers help connect and move freight, or goods via land, air, sea, or rail. It’s up to you what type of broker and goods you want to move. The average annual income for a broker in the United States is $62,000 a year with an average additional compensation for commissions ranging up to $28,0002.


Getting Started. What You Need to Know.

To start a freight brokerage business, it typically takes six to 12 months to get up and running with establishing your business, securing all of your registrations, and building a network of shippers, carriers, and drivers.


Step 1: Build Industry Experience and Knowledge

If you have no previous experience or exposure to the transportation, logistics, or brokerage industries, consider working in a related job or field. You can also begin researching and becoming familiar with the latest industry trends and regulations. Here are a few resources for learning:

    • FMCSA, Federal Motor Carrier Safety Administration: fmcsa.dot.gov/regulations
    • TIA, Transportation Intermediaries Association: tianet.org/government-affairs/
    • Inbound Logistics: inboundlogistics.com
    • SupplyChainBrain.com

To further gain experience and industry connections, you’ll want to start networking with other brokers or industry leaders and experts. LinkedIn is a great way to reach out to individuals as well as join various groups and conversations to learn more about the day-to-day, what to expect, and overall industry happenings.

You can also take a freight broker course and read various industry publications.


Step 2: Create a Business Plan for Your Brokerage Firm.

One of the first steps to starting any business is developing a business plan with goals, timelines, and benchmarks for what you want to achieve and how you plan to get there. Take time to map out what you’ll need to consider and prepare from a financial perspective and what’s the right business structure. Research and identify reputable carriers and drivers you would leverage for jobs, and define tools and technology that might be needed to support your business. Once you’ve built a framework, determine your costs and create a budget. This will help you also understand whether you need financial support to start your business and what you will need in the long term to recoup and generate revenue.


Step 3: Make it Legit. Establish your Authority & Other Requirements

You’ll need to register through the FMCSA and obtain Authorization, or Operating Authority (MC Number) to run a legitimate brokerage business. For a list of steps and overview, visit the FMCSA’s page – Getting Started with Registration

A few things to keep in mind during the registration process:

    • The FMCSA requires companies to define the type of business operation, e.g. Motor Carrier, Broker, Intermodal Equipment Provider (IEP), Cargo Tank Facility, Shipper, and/or Freight Forwarder. 
    • In addition to filing an application for authority along with your USDOT number, you will need to have specific insurance and legal process agent documents. Visit the FMCSA’s Insurance Filing Requirements page for more information on what is needed specific to your operation.
Step 4: Apply with the Unified Carrier Registration.

After establishing your brokerage, you will need to register with the UCR (Unified Carrier Registration). The UCR was created by the Unified Carrier Registration Act of 2005 to replace the former system for identifying and collecting fees associated with vehicles engaged in interstate transportation. For more information, visit: plan.ucr.gov


Step 5: Build and Launch Marketing Strategies and Tactics.

Once you’ve established your business, you’ll need to create a marketing strategy and tactics that will support bringing in cash flow. This is something you can build into and consider during the creation of your business plan; no need to wait until your business is up and running to get started on marketing plans. Things to consider when marketing your brokerage:

    • How are you going to find, acquire and retain customers and build your business’s reputation? Consider both offline and online sources and how you will manage or execute against those sources.
    • Consider different methods, tactics, channels along with their associated costs and expected or ideal ROI. For example, if you choose to do paid search ads via Google, what is your cost per conversion (conversion could be ad clicks or form submissions) Essentially, what is your acquisition cost to gain new customers or carriers.
    • A few channels to consider:
      • Business directories
      • Load boards
    • Also, consider who you want to target and build a persona or a customer profile based on the ideal attributes. You can use tools like Facebook and Google to target and find them online.

Be patient. It might take time to build your network of shippers, reliable carriers and truck drivers, but with good business practices and a strong strategy, you’ll be on your way to earning your customers’ business and securing revenue.



1Verified Market Research, US Freight Brokerage Market Size by Commute, by Service, by End-Use & Forecast, published. Jul. 2021.

2Indeed.com, How Much Does a Freight Broker Make?, published Feb. 22, 2021.

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