6 Steps to Get a Freight Broker License

If you want to run a freight brokerage business—matching goods that need to be shipped with trucking companies and carriers that do the hauling—you will need a freight broker license, also known as a load broker license. Freight brokers are regulated by the Federal Motor Carrier Safety Administration (FMCSA), and the requirements can be complex. Understanding trucking broker license requirements is essential for avoiding fines and violations.

What do freight brokers do?

A freight broker acts as an intermediary in the freight industry. They do not ship cargo themselves or have cargo to ship. Instead, they negotiate transactions between shippers and carriers, either independent drivers or trucking companies.

They’re also different from freight forwarders. Brokers do not handle shipments. Forwarders take physical possession of goods that need to be shipped, consolidate several small shipments into a larger shipment, and coordinate that shipment’s transportation. The same company can provide both services.

How much do freight brokers make?

A freight broker’s rate of pay is heavily dependent on their location. According to Indeed, the average salary is about $62,000, with additional compensation for commissions averaging about $28,000. However, the total take-home pay can fluctuate based on location and market demand.

There are three types of freight brokers, each with different salaries:

• Licensed freight broker: Has their own operating authority, owns a company, and might employ other brokers.
• W-2 freight brokers: Works for a licensed broker as a freight broker agent and receives a salary plus commission.
• 1099 freight broker: Works under a licensed broker as an independent contractor.

6 steps to getting your freight broker license

What are the freight broker license requirements, and what is the process for obtaining a broker license for freight? Here’s how to get a broker license for trucking.

1. Invest in training

While not a legal requirement, training can be incredibly beneficial. Find an online course, work through a training book, or get some hands-on practice at a freight brokerage company. Plan to spend about a month at the least developing your skills and knowledge.

Additional training and education might be tax deductible—as long as it’s directly related to your career.

2. Choose a business structure

A freight broker can be organized as a sole proprietorship, partnership, or corporation. Each has specific tax implications and documentation requirements. Your business structure can have long-term impacts on your company, so you should consult a business attorney and tax professional before choosing.

3. Apply for broker authority

Next, apply for broker operating authority by submitting Form OP-1 to the FMCSA. The form is relatively straightforward. As of 2024, the filing fee is $300 per type or $600 for both. If you apply online, you’ll get your motor carrier number right away. Once that happens, complete the following steps.

4. Get a surety bond

If you’re a freight broker or forwarder, the FMCSA requires you to have a $75,000 surety bond to make sure you follow the rules and regulations. Don’t worry—you don’t have to come up with all that cash yourself. A surety company can back the bond for you in exchange for a small premium.

As long as you stick to the rules, that’s all you’ll have to pay. But if something goes wrong and you violate the terms of the bond, you can be sued up to the limits of the bond. In that case, the surety company would pay the claim, but you will have to reimburse them for how much they pay on your behalf.

5. Choose a process agent

You will need a process agent in every state where you write broker contracts. If any legal proceedings are brought against your business, a process agent agrees to accept any court papers served on your behalf. You can use individual process agents in each state, or you can work with a national company that offers process agent services across the country. You will need to file Form BOC-3 with the FMCSA to declare your choice of process agents.

6. Register through the Unified Registration System

Finally, register with the FMCSA through the Unified Registration System (URS). This system combines all the necessary forms into a single, easy-to-use online application form.

After completing your URS application, you’ll need to learn all the relevant regulations on interstate commerce in the states where you plan to do business. Contact each state’s regulatory agency for more information.

Growth strategies for new brokers

Starting up means identifying the best software, finding clients, and marketing yourself. These processes are time-consuming but important, as the right growth strategies can help your business take off faster. Using a load board and networking are two of the best growth strategies for new freight brokers. 

Use a load board

Once you have your broker license for trucking, consider subscribing to a load board to connect directly with reliable carriers. You can post loads directly from your TMS (transportation management system), and your preferred carriers can book those loads. You quickly gain access to thousands of potential partners nationwide willing to haul your loads. 

Load boards help you identify carriers looking for loads. New brokers can use load board platforms to develop experience and build a trusted network. Focus on responsive communication, competitive rates, and on-time deliveries. A good reputation can lead to positive reviews and repeat business.

Focus on networking

Trucking and logistics are highly competitive, and connections can make or break your business. You can use networking events to find new clients and carriers. 

Start by attending industry events, trade shows, and local gatherings. These events let you introduce your service to others. Then, consider joining freight broker associations or local chambers of commerce to access more networking opportunities. Finding new ways to connect with potential clients gets your name out there so you can start growing your operation. 

Freight broker license costs

Part of understanding how to get a freight broker license is knowing the costs involved. There are four basic types of expenses:

1. Training costs: Formal training isn’t a requirement, but it can help. Investing in training courses gives you essential industry knowledge. You’ll learn freight logistics, regulations, and software. Investing in a training course can help you start making money fast.
2. License costs: The broker license for trucking is a one-time cost. Once you have the license, you should only need to pay for another one if you need to reapply.
3. Surety bonds: Brokers must secure a $75,000 surety bond or trust fund. These bonds come with yearly premiums based on your credit score and financial history. 
4. Organizational expenses: Starting your business involves setting up a plan, getting insurance, and purchasing equipment. You’ll need a computer, internet access, software, supplies, and other essentials. Consider securing funding to help you launch your business.

SEE ALSO: 5 Steps to Become a Freight Broker in California

Resources for aspiring freight brokers

Getting started with freight brokerage means diving into a complex industry. The right resources can make all the difference. Use expert podcasts, webinars, and training resources to start out on the right foot:

• FreightNation: FreightNation is Truckstop’s freight podcast. Listen to seasoned brokers break down the industry and offer expert insights into the freight world. 
• Webinars: Webinars are another great resource for freight brokers. You can choose where to focus your learning and get the answers to questions, so you’re ready to go.
• Training: Truckstop also offers training videos to help you navigate our technology tools.

SEE ALSO: 7 Tips to Pass Your CDL Test

Use Truckstop’s Load Board to find qualified carriers and shippers.

Once your freight brokerage is ready to go, it’s time to find carriers and shippers. Making the right connections and getting the word out can be challenging for new freight brokers. Working with a digital load board makes it faster and easier.

Truckstop connects tens of thousands of carriers, shippers, and brokers through a complete technology solution. The Truckstop Load Board includes freight matching, planning and tracking tools, a TMS (transportation management system), real-time rate analysis for load pricing, and convenient payment solutions. Freight brokers who choose Truckstop can enjoy advanced features that streamline their operations and make management easier. Use Truckstop’s solutions to:

• Uncover hidden capacity
• Monitor carrier compliance
• Post unlimited loads
• Monitor truck-to-load ratios
• Get real-time rate updates
• View carrier performance ratings

If you have your freight broker license, we’re here to help. Choose Truckstop to simplify the freight process from start to finish. Get your demo, and see the difference our solutions can make today!