get link Carriers have become more cautious in partnering with brokers after minimum surety bond for freight brokers was increased from $10,000 to $75,000. According to the Federal Motor Carrier Safety Administration (FMSCA), the number of freight brokerage companies dropped from 20,000 to 13,000 when the ruling became in effect in 2013.
follow site enter site 1. FMCSA-accredited – carriers enjoy certain levels of protection when dealing with freight brokers that are officially recognized by the FMCSA. Hence, getting FMCSA accreditation should be your top priority after your brokerage firm is up and running. Established brokers with good credit records can obtain surety bonds at a premium rate as low as 2%. Startups and those with bad credit records, on the other hand, can face bond premium rates of up to 12%.
2. Single-brokerage – risk exponentially increases the more parties are involved since a delayed payment or nonpayment by one party can cause problems for the remaining parties. A mistake by a broker can also damage the carrier’s reputation. Carriers prefer freight brokers that practice single-brokerage. Single-brokerage means that there are only three parties involved: the carrier, the broker, and the shipper. In comparison, a double brokerage involves the carrier, the broker, a second broker, and the shipper.
3. Proof of Liability Insurance – in effect, a freight brokerage contract means that the broker is hiring the carrier to transport the load of the broker’s client, the shipper. In this arrangement, liability rests mostly on the shoulders of the carrier. However, there are still situations where the broker can be held liable instead of the carrier. Liability insurance guarantees that the broker will be able to fulfill his obligation in case he is held liable. Carriers will also find it appealing if the broker has contingent cargo insurance coverage in addition to liability insurance coverage.
4. Versatility – carriers that tackle only one type of load is extremely rare nowadays. Most carriers today cater to multiple types of shipping services such as LTL (Less Than Truckload), FTL (Full Truck Load), TCL (Temperature Controlled Logistics), Flatbed (Heavy Haul), Airfreight, and Rail Intermodal. Carriers strive to be flexible and they want a freight broker that is just as versatile as or is even more versatile than them.
go to link 5. Sustainable and Reputable – carriers want a freight broker they can trust and can partner with for a long time. A good reputation is a must. A reputable broker boosts the reputation of its partner carriers. Losing or changing a broker can also disrupt the operations of a carrier so carriers prefer brokers that are unlikely to cease operations anytime in the next 10 years.
Know what carriers want and give it to them and you’ll be on your way to becoming a successful freight broker. Step in a carrier’s shoes and envision what they consider to be the perfect broker.