The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
The Kickass Entrepreneur
Subscribe
The Kickass Entrepreneur
  • About
  • Blog
    • All Blogs
    • Create Wealth (Investing)
    • Entrepreneur Interviews
    • Featured Top Posts
    • Growing Profits
    • Growing Revenues
    • Marketing
    • Positive State of Mind
    • Real Estate Investing
    • Retirement
    • Sales
    • Selling your Business
  • Book
  • Courses
  • Podcast
  • Resources
  • Contact
  • All Blogs

5 Challenges of Getting Freight Brokers License

  • August 25, 2021
  • 3.7K views
  • 5 minute read
  • Rene
a handshake from two persons
Share
Tweet
Share

A freight broker license is necessary for anyone who’s planning to get into the business of hauling and transporting products.

5 Challenges of Getting Freight Brokers License

As a licensed freight broker, you’d be tasked to act as a middle person connecting shippers with various carriers.

Shippers hire freight brokers to haul their goods from one point to another, but the latter doesn’t do the hauling by themselves.

As a regulated practice, getting a freight broker’s license can become complicated and confusing, but they come with immeasurable benefits.

Understand how freight brokers work and find out the challenges you’re likely to face if you’re planning to get a freight broker license. Read on.

What Does a Freight Broker Do?

Almost every business organization requires freight forwarders in order to grow and move their business. And freight brokers are tapped by these businesses to address their needs.

As the link between organizations with shipping needs and the authorized shippers themselves, licensed freight brokers can start working even if they don’t have a capital-intensive logistics or carrier business.

What Challenges May Freight Brokers Face When Getting a License?

The freight brokerage industry is a high-value sector. In the United States, the market is estimated to be at USD$1.164 billion in 2020, with a projected compound annual growth rate of 36.2% from 2021 to 2028.

The freight brokerage sector is regulated by the federal government through the Federal Motor Carrier Safety Administration (FMCSA).

Getting a license as a freight broker may not be that easy. Same with a prime broker account, but once you got it, you can make big progress. There are potential challenges you may need to face, including the following.

1. Misleading ‘No-Training’ Requirement

Formal education isn’t one of the requirements for getting a freight broker’s license.

Thus, anyone who wants to get authorization to practice freight brokerage may get the wrong impression it’s just an easy job, only to find out later on that such isn’t the case.  

While some things can be learned by gaining actual experience, it’s better for an aspiring freight broker to gain basic knowledge of how the sector works.

A training program is beneficial for those who have no prior experience in the sector.

Lectures on the requirements of the freight industry, especially when it comes to licenses, operations, and regulations, are often discussed.

So are the essential components, such as marketing your services and growing your business. Training also includes other freight-company-specific information.

Each program aims to provide an enrollee with enough knowledge to operate their own brokerage firm.

Without these critical sets of information, a freight broker planning to obtain a license may find the undertaking an uphill battle.

Wait for at least one year to develop an understanding of the sector instead of filing an application right away.

2. USD$75,000 Surety Bond and Other Fees

Most applicants are unaware that they need to raise a surety bond worth USD$75,000, as part of the application process. This is perhaps the most challenging part of obtaining a license.

Unlike other types of bonds, a federal freight broker bond can be difficult to pass with flying colors.

Because of the risks attached to freight brokerage, approval for this bond will hinge on the results of the individual background check performed on an applicant.  

Surety bonds are used in many industries, mainly to ensure professionalism. The following are the key players:

  • The principal or the subject of the bond: This pertains to the freight broker license applicant.
  • Obligee or the party requiring the bond: It refers to the claimant, who claims the bond in case the principal fails to comply with the set rules.      
  • A surety or the bond issuer: The principal pays a premium to the surety or bond issuer, who assures to pay the obligee in the event of a claim.  

Apart from the surety bond, which you don’t necessarily have to raise yourself, an applicant will have to pay for the training costs and actual application fees.

In sum, this can cost you USD$300 for one category or double that amount, or USD$600, for two categories.     

3. Determining the Best Business Structure

One of the steps in getting a license is to find out how to structure the brokerage company. To find out the best setup, you’d need to talk with a lawyer or accountant.

As with other businesses, you can choose from among the following: sole proprietorship, partnership, and corporation.       

Each business type has its own advantages and downsides, and discussing it with an expert can help you make an informed decision. This may also add to the delay in applying for a broker’s license.       

4. The 10-Day ‘Protest’ Period

After deciding the business structure for your brokerage company, a license applicant must get a motor carrier number from the FMCSA by submitting a form.

Called the OP-1 form, it’s the first actual form that’s submitted and includes information on the business structure and operating authority, along with the USD$300 filing cost.

A motor carrier number must also be secured prior to getting the broker license since it gives any brokerage firm the official recognition to operate.

An online applicant can receive the motor carrier number almost immediately, while those who applied through the mail will have to wait for a few weeks.

After issuance, however, the applicant would be subjected to a 10-day protest. During this time, another organization may question the application.

Anyone who thinks you shouldn’t be allowed to practice can file a protest by keeping in touch with the FMCSA.

5. Choosing a Process Agent

A licensed freight broker is required to have a process agent in every jurisdiction where it writes a contract or in places where it has an office.

A process agent is a person who receives court documents in case a complaint is filed against a motor carrier, broker, or freight forwarder.

If it’s your first time and you don’t have adequate experience, it may be quite hard to look for a reputable process agent.

A company has a choice whether to appoint an agent for each branch or one agent for multiple states.         

Final Thoughts

There are two major challenges in getting a freight broker’s license: costs and lack of proper knowledge of the sector.

Before lodging your application, consider working for a freight brokerage or any closely related firms to build up your knowledge on how the sector works as well as gain important contacts.

Once you’re confident enough to run your own firm, it’s time to take it further by applying for a license.    

_________________________________________________________________________ 

Some other articles you might find of interest:

Understand how you can maximize your time to grow your business:

 Time Is Money And Your Most Valuable Resource. Use it Wisely to Build Your Business

https://www.thekickassentrepreneur.com/time-is-money

Looking for effective ways to drive and increase traffic to your startup website?

 SEO Traffic Guide To Boost Your Blog Rankings

https://www.thekickassentrepreneur.com/guide-to-boost-your-blog-rankings/

 Looking for effective ways to drive and increase traffic to your startup website?

 3 Top Reasons Why Startups Fail and How Not to Become a Victim

https://www.thekickassentrepreneur.com/3-top-reasons-why-startups-fail-and-how-not-to-become-a-victim/

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

Related Posts:

  • How To Navigate Volatile Freight Markets
  • 6 Benefits of Hiring a Freight Forwarder for Your Business
  • 8 Reasons Your Trucking Business Should Start Using Freight Factoring
  • 8 Challenges That All Startups Need to Take Seriously
  • 9 Manufacturing Challenges and How to Avoid Them                  
  • The Challenges of Working with an OCIO Firm
Share
Tweet
Share
Rene

Previous Article
a back view of a truck
  • All Blogs

What Are the Differences Between Forwarding and Reverse Logistics?

  • August 24, 2021
  • Rene
View Post
Next Article
a man inside a car holding a mobile phone
  • All Blogs

Things To Look For in a Reliable Forex Broker

  • August 25, 2021
  • Rene
View Post
You May Also Like
man touching a woman's shoulder
View Post
  • All Blogs

Addressing Emotional Distress from Sexual Harassment in San Diego: A Legal Perspective

  • September 20, 2023
  • Meg Rivera
writing
View Post
  • All Blogs

8 Essential Steps for Impeccable Essay Proofreading and Editing

  • September 20, 2023
  • Meg Rivera
Net worth by age percentile calculator for Canada
View Post
  • All Blogs
  • Financial and Investment Calculators and Economic Data

Net Worth By Age Percentile Calculator for Canada with 2023 Data

  • September 9, 2023
  • Jeff Wiener
waste disposal
View Post
  • All Blogs

Dumpster Diving: A Guide to Efficient Waste Disposal

  • September 6, 2023
  • Meg Rivera
form 1040-x
View Post
  • All Blogs
  • Business

Mastering Form 1040-X: Your Guide to Amended Returns

  • September 3, 2023
  • Jeff Wiener
ohio tax rate
View Post
  • All Blogs
  • Business

Navigating Ohio’s Tax Rates: A Comprehensive Overview

  • September 3, 2023
  • Jeff Wiener
Safe workplace yellow out of service tag placing on RCD residual
View Post
  • All Blogs

Managing Workplace Accidents in San Diego

  • August 29, 2023
  • Meg Rivera
australia
View Post
  • All Blogs

Unleash Fun: Get 30 Free Spins in Australia’s Online gaming Scene

  • August 21, 2023
  • Meg Rivera

Join 6,472 Entrepreneurs That Get My Business Building and Wealth Creation Posts by Email

I can teach you how to build a successful, profitable business, and turn that into millions in personal wealth.

Thank you for your interest in THE KICKASS ENTREPRENEUR'S GUIDE TO INVESTING. Three Simple Steps to Build Massive Wealth with your Business's Profits. Please check your email to confirm the book download. Form: 400529

There was an error submitting your subscription. Please try again.

We won’t send you spam. Unsubscribe at any time.

Recent Posts
  • man and papers 1
    Targeting Millennials: Real Estate Marketing Strategies For The Next Generation of Homebuyers
    • September 22, 2023
  • loan types 2
    Smart Borrowing: Determining How Much You Can Afford To Borrow
    • September 22, 2023
  • handyman 3
    Effective Strategies To Advertise Your Handyman, Landscaping, or Plumbing Services
    • September 22, 2023
  • happy woman 4
    Kickass Ideas to Maintain Customer and Employee Loyalty
    • September 21, 2023
  • Real estate broker agent presenting and consult to customer to d 5
    The Return on Investment (ROI) of Mortgage CRM Investments
    • September 20, 2023
Featured Posts
  • Become a Decamillionaire
    How to Become a Decamillionaire, Grow your Net Worth to $10 Million, and Join the 1% Club
  • how to become wealthy
    The Entrepreneur’s Secret to How to Become Wealthy and Build a Personal Fortune
  • Most Profitable Small Businesses
    27 of the Most Profitable Small Businesses to Open in 2023
Categories
  • All Blogs (1,077)
  • Business (410)
  • Canadian Financial Products (4)
  • Create Wealth (Investing) (134)
  • Entrepreneur Interviews (27)
  • Featured Post for Main Menu (4)
  • Featured Top Posts (23)
  • Finance (112)
  • Financial and Investment Calculators and Economic Data (118)
  • Fitness (9)
  • Growing Profits (72)
  • Growing Revenues (115)
  • Growing Revenues (71)
  • Marketing (161)
  • Millionaire and Business owner interviews (3)
  • Positive State of Mind (69)
  • Real Estate Investing (17)
  • Retirement (13)
  • Reviews (13)
  • Sales (16)
  • Sell Me This Pen (8)
  • Selling your Business (13)
  • Starting a Business (1)
  • Startup Ideas (18)
  • Technology (194)
  • Top Products (4)
  • Uncategorized (62)
Follow us
Author
Jeff Wiener
Jeff sold his company to private equity in 2017 and is now semi-retired. Jeff spends time…

    CHECK OUT MY BLOG, AND SUBSCRIBE

    about
    The Kickass Entrepreneur

    Expand Your Business, Improve Profits, Create Wealth

    Expand your business, improve your profits, and create wealth. Each one of the three can be elusive goals. Follow the right steps, and you, too, can create financial independence. It is possible … you just have to take the right steps.
    NAVIGATION
    • About
    • Blog
      • All Blogs
      • Create Wealth (Investing)
      • Entrepreneur Interviews
      • Featured Top Posts
      • Growing Profits
      • Growing Revenues
      • Marketing
      • Positive State of Mind
      • Real Estate Investing
      • Retirement
      • Sales
      • Selling your Business
    • Book
    • Courses
    • Podcast
    • Resources
    • Contact
    TAGS
    apartment BATNA Business business failure business growth business sale Capitalization Rate CAP Rate cash cash flow Creating Wealth Discipline entrepreneur entrepreneurship excel extra cash Featured goal setting Growing Business investing investment real estate M&A marketing Marketing KPIs Mergers and Acquisitions | M&A | Entrepreneur Blog Millionaire millionaire next door mistakes MUR Peter Principle Profit profitability real estate retirement revenue Revenues sales sales management Semi-Retirement Blog | Entrepreneur Blog | Small Business Blog small business Stagnant stocks success Thomas Stanley wealth
    RECENT ARTICLES
    • horse jockey
      Top 5 Most Successful Horse Racing Jockeys Ever
      • September 8, 2023
    • man and papers
      Active vs. Passive Investing: Which Is Right for You?
      • August 8, 2023
    • seoul
      How Seoul Internships Shape Your Professional Journey
      • July 24, 2023
    • casino
      Empower Yourself With These 5 Lifelong Skills For Success In Casino Business
      • June 23, 2023
    • Real Estate Brokerage
      Factors That Affect Real Estate Commission Rates
      • June 21, 2023
    • Digital online marketing commerce sale concept. Woman using tablet payments online shopping and icon customer network connection on hologram virtual screen, m-banking and omni channel.
      A Savvy Shopper’s Guide to Purchasing Power Tools Online
      • May 23, 2023
    The Kickass Entrepreneur
    • Coaching
    • Book
    • Blog
    • Contact
    • Privacy Policy
    • Terms
    • Disclaimer
    • Facebook
    • LinkedIn

    Input your search keywords and press Enter.