As those who oversee the financial aspects of a company, freight brokers take on heavy loads of work consisting of invoicing, paying, extending credit, and many other aspects of running a business that companies do not handle on their own. When you think of a freight broker, you may think of one person handling it all, but this is not so for a variety of large, multinational companies that bring in billions of dollars in revenue each year. Brokers handle the inside work that meets guidelines and standards, and check into a customer’s finances as a way to avoid risks from customers that won’t be able to meet these standards.
A freight agent, on the other hand, is often confused with a freight broker but they are very different in their own regards. Instead, they are responsible for matching carriers with customers under the supervision of a freight broker. In some ways, they are providing customer service and care to a company while a broker is ensuring that all standards are complied with under FMCSA laws.
What Every Agency Should Know
So, many agencies are asking the big question: Is it time to transition to a freight agency, with a freight broker handling my business? Because FMCSA standards are plentiful and the costs can be a major expense for any business, having a broker handle these matters can make these matters simpler as well as more affordable as well as give companies access to the best tools in the trade, implementing new technologies to keep your company up-to-date. Even the most basic software can prove useful and beneficial on a financial scale over time.
Brokers will also keep records and provide support when needed, as well as give your business credibility as it stands up to others in the freight trade. Having a team who understands the ins and outs of freight agencies, improvements and decisions that need to be made, can lead to the best outcome in any business that just so happens to be competing with thousands of other freight companies in our country.
The Process of Becoming a Freight Brokerage
Starting business as a freight broker is a complex process that starts with selecting what type of business you wish to be (sole proprietorship, limited liability, etc.) and applying for authority to actually practice being a broker, which can prove to be time-consuming and come with small startup costs. After designating a representative and arranging the mandatory $75,000 surety bond required by brokers, a company will register their business, read up on state requirements, and conduct business from there. As you can see, this process can come with complications, which is why it requires the utmost of care.
Benefits of Freight Brokers
There are many benefits to hiring a freight broker, from having the best resources and time on your side, to creating a lasting relationship with a company who works for you. Freight brokers are necessary middlemen for businesses in the shipping industry worldwide, applying their knowledge in the trade to make connections between company and customer.