There is growing interest in the freight industry and more and more people are thinking of starting a career as a freight broker. Before you go and start enrolling in a freight broker licensure exam preparatory course, you should first ask yourself, “How much does it cost?”
It will be heartbreaking if you spend all that time and effort studying and reviewing and then pass the licensure exam just to find out you don’t have enough capital to start your own freight brokerage. You need significant capital before you can start practicing as a broker. Securing FMCSA (Federal Motor Carrier Safety Administration) accreditation alone can cost thousands of dollars as it will require you to get a minimum amount of bond and a minimum amount of insurance. There is a way to start earning money in the freight industry even if you can’t practice as a freight broker yet – you can work as a freight agent.
Starting Out as a Freight Agent
This is the ideal way to start your career as a freight broker. You don’t need FMCSA accreditation to work as an agent which makes the career more financially accessible. Committing to your own brokerage when you have next to zero experience and minimal capital will likely end in a disaster. Get a feel of the industry first and build up experience by working as an independent freight agent. This will limit your capital risk and allow you to earn and save until you have all the capital you need to setup your own brokerage firm.
Here’s how much it will cost to become a freight agent:
- Printer/Fax/Scanner combo: $100-200 one-time purchase
- Desk/chair: $50-200 one-time purchase
- Phone service: $25-50 monthly expense
- Load boards: $30-150 monthly expense
- Office Supplies: $5-20 monthly expense
Upgrading to Being a Freight Broker
Once you’ve saved enough capital and gained enough knowledge and experience, you can switch to being a freight broker.
Here’s how much it will cost to become a freight broker (in addition to monthly costs of being an agent):
- Broker authority: $300 one-time purchase
- Bond/trust: $500-6,000 annual expense
- Process agent (BOC 3): $50-$150 one-time expense
- Insurance: $0-500 monthly expense
- Mileage software: $0-5,000 one-time purchase
The freight industry continues showcase tremendous growth. If you want to know how to become a freight broker, don’t rush it. Take your time researching so you know what to expect from a career in freight brokerage or freight agency. There are various online resources you can use. There are even some free online courses that you can take to prepare for the licensure exam.