A freight consultant or freight broker as they are more commonly known have the important job of matching authorized motor carriers with potential freight. It may sound like a simple process to take orders from manufacturers then simply send a truck to pick it up, right? That is the short version however; in reality, it is much more complicated than that.
In order to have a profitable business, a freight broker's reputation is the key. That reputation relies completely on the actions of others. Not only do they have to find reliable transport for goods but they must also service the needs of the motor carrier. Should a carrier provide the service then not be adequately compensated the freight broker stands to lose the service of the carrier. On the other hand vice versa is true, a high paying load that sits on the docks due to late trucks will go to a different freight broker the next time. It is a very high stress position to be in.
Nevertheless, the use of freight brokers has become standard practice in the industry. Companies discovered in the '90s the benefit of having third party logistics specialists managing the flow of products. They have found their services to be indispensable.
Freight Broker Training and Education
Many brokers began their careers working in some level with the trucking industry, working their way up and making contacts along the way. Contacts in this field will make or break a freight consultant. Good old-fashioned networking coupled with years in the field gaining technical knowledge is what makes an excellent freight broker.
Some of the things you will need to learn are the shipping lanes of North America, Canadian clearance issues, the best and worst areas in the nation when it comes to finding loads and Department of Transportation's rules on hours of service for motor carriers. The last is not essential to the broker's position per se; however, it is important knowledge when dealing with the drivers moving the freight.
There are training programs and schools that offer programs both online and off. These are great programs but remember you will need to establish contacts in the field to become profitable. Cost for this kind of training will vary from school to school. In some areas, you may be able to receive some financial aid through technical programs or occupational rehabilitation grants, again this will vary by school and state.
Legal Requirements and Cost
In addition to training and experience, there are also legal requirements for being a freight consultant. Listed below are the licenses and insurance you must carry including their cost:
1) You must apply to the Federal Motor Carrier Safety Administration for broker's authority. Submit $300 and form OP-1 to file for your brokers authority.
2) Obtain a surety or trust bond, a $10,000 bond is required. If you have good credit, some companies will put up the bond for you for a fee, approximately $500-$700 per year. You must fill out form BMC-84 or BMC-85 and submit it.
3) File a form BOC-3 and submit it along with $50 to become a processing agent.
Equipment
In order to start your freight consultant business you will need a computer, fax machine, phone with inexpensive or unlimited long distance and high-speed internet access. Although an office can be handy it is not an absolute requirement, many consultants start their business out of their homes and become quite successful.
Job Outlook
The job outlook even during these times is good. The trucking industry is a $400 billion dollar a year business with freight brokerage at about 10% of that. Since this a relatively new concept that began really taking off in the '90's there is still room for growth. In fact, a recent article in the Wall Street Journal cited brokerage and logistics as the fastest growing part of the transportation industry.
Income Potential
This is a business where earning depend greatly on you. The better you can relate with people and the more diligently you work to produce results the faster your income will grow. The income span for freight brokerage today is between $40,000 and $200,000 per year.
The time it will take you to go from the bottom of the income scale to the top is dependent on several things. Generally, you can expect three to six months to be firmly established and begin making money. If you are one of the lucky few that have vast experience and contacts in the field, you may shorten this time quite a bit. However if you are personable and persistent you can also rise rather quickly. There again it is really up to you and your motivation.
Pros and Cons
Whenever you are deciding if a field is right for you it is wise to weigh the pros and the cons. below we will examine some of these:
For
1) Freight brokerage is a field anyone can get into, either through relative experience or training.
2) There is a huge potential in earnings.
3) You can do this job from home in your pajamas.
4) Shipping is the way that 90% of product gets from the manufacturer to the consumer; this equals job security in the field.
Against
1) Anyone can get into, so the initial competition may be fierce in this field.
2) It can take up to six months to see real earnings
3) This is as much about whom you know as what you know. A good network trumps training. However, skill will quickly overshadow the who you know aspect; if you are not any good at what you do it will show and end your career.
Conclusion
This is definitely an area worth checking into, especially if you are already in the transportation field and are looking to move up the ranks. A freight broker has the best of both worlds; they can tap into the huge earning potential found in the trucking industry while never taking possession of one piece of freight.What Is a Freight Consultant?
