How To Start A Freight Brokerage Business

How To Start A Freight Brokerage Business

In order to generate these revenues, the freight industry relies on brokers who negotiate with cargo haulers, corporate clients, individuals, and SMBs in need of freight services. This means you can start and run a lucrative freight brokerage business. Here is how to start such a business.

Acquire USDOT number

You need a USDOT number from the US Department of Transportation. Although not mandatory, the USDOT number is necessary for several reasons. Firstly, it would enable you to apply for freight brokerage licensure from the Federal Motor Carrier Safety Administration (FMCSA). Secondly, it acts as a mark of quality assuring clients that you run a legitimate business and can be trusted to arrange safe shipping of goods from one location to another.

Broker authority

Broker authority is a license given to qualified brokers by the FMCSA. As stated above, you cannot apply for broker authority if you do not have a USDOT number. A non-refundable fee of $300 is payable by each applicant.

Surety bond

In addition to applying for FMCSA licensure, you must post a surety bond of $75,000. This bond is an insurance policy that covers the cost of losses in the event of contract breach on both client and carrier fronts. You can obtain one from an insurance company. It is worth noting that insurers who offer surety bonds to professionals in the cargo brokerage industry must file the appropriate paperwork with the FMCSA.

Appoint a process agent

A process agent is a representative who can receive court orders/papers from aggrieved clients. Freight brokers are required to have process agents in every state where they have offices or business branches. Since it may be financially imprudent to hire a process agent in every state where your business has a footprint, the rule of thumb is to use the services of companies that offer “blanket process agent coverage” in every US state. At the same time, remember to file the relevant documentation especially form BOC-3 to the FMCSA.

Register business

Besides acquiring licensure and appointing process agent, you must register your business as well as ensure it complies with state or local cargo brokerage and transportation regulations. Business registration fees range from less than $100 to more than $150 depending on state regulations.

Set up an office and contact shippers/carriers

Set up an office where clients can reach you. A permanent address will add legitimacy to your business operations. Moreover, liaise with businesses and individuals who may require cargo-shipping services. Additionally, enter into agreements with carriers who can transport your clients’ goods across the US or even abroad.


If you would like to start a cargo brokerage business,acquire a USDOT number, register your business, acquire broker authority, appoint a process agent, acquire surety bond, and set up and office.

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