Starting your own freight brokerage can be an exciting journey to success, offering valuable benefits like being your own boss and keeping 100% of your profits. While the path does come with its unique challenges, overcoming them is part of building a thriving business. With the right approach, you can sidestep common pitfalls and join the many successful brokers who have found long-term growth in this dynamic industry.
This guide provides you with the key steps and strategies to confidently navigate the process of becoming a successful freight broker. Let’s get you on the road to success!
What is a freight broker?
A freight broker, or transportation broker, is a crucial intermediary between shippers and carriers. Shippers have freight that needs to be moved, carriers provide the trucks to haul it. The freight broker connects the two, facilitating the transaction without ever taking possession of the freight themselves. Licensed through the Federal Motor Carrier Safety Administration (FMCSA), freight brokers have the legal authority to operate and can hire employees or contract independent freight agents to work under their license.
Freight brokers make money by charging shippers a rate higher than what they pay the carriers. This difference, known as the margin, typically hovers around 15%, though it can vary with market conditions. For example, if a broker charges a shipper $1,000 and pays a carrier $850, their profit from the transaction is $150.
For more details, check out our video How to Become a Freight Broker or Freight Agent?
Freight broker vs. freight agent: What’s the difference?
While freight brokers and freight agents play vital roles in the transportation industry, there are key differences between the two. A freight broker is fully licensed by the FMCSA and bears all legal and financial responsibilities of running the brokerage. This includes obtaining the proper insurance, securing a surety bond, and maintaining financial solvency. Freight brokers have the authority to hire employees, work with independent contractors, and directly manage customer accounts.
On the other hand, a freight agent works under the authority of a licensed freight broker, meaning they do not need to go through the licensing process themselves. Instead, agents focus on building relationships with shippers and carriers, securing deals, and earning commissions from the freight broker they work with. This makes becoming a freight agent an appealing option for those looking to break into the industry without the financial risk and regulatory requirements involved in starting a brokerage.
If you’re interested in how to become a freight agent, you’ll find it’s a streamlined way to start your career while learning the ropes from an established broker.
How to become a freight broker: 5 steps to follow
The basic requirements for becoming a freight broker are quite simple, which is why many people come to us asking how to become a freight broker without any experience. This low barrier to entry is one of the main reasons for the high turnover of new brokers.
There are only a few things you need to start a freight broker business:
Obtain broker authority
To legally operate as a freight broker, you must obtain broker authority through the FMCSA via the Unified Registration System (URS). The process involves submitting an application and paying a processing fee. Typically, the FMCSA takes four to six weeks to review and approve applications. If you prefer support throughout the process, services like DAT Authority provide step-by-step assistance to ensure compliance and a smooth experience.
Secure a surety bond
Every freight broker must maintain a surety bond or trust fund valued at $75,000 to meet FMCSA requirements. This bond guarantees payment to carriers if a broker fails to fulfill their contractual obligations. You can obtain this bond from an insurance provider or work with services like DAT, which partners with insurers to offer competitive rates for freight broker bonds.
File a list of process agents
A list of process agents (Form BOC-3) must be filed with the FMCSA to represent your brokerage in every U.S. state. These agents are responsible for receiving legal documents on your behalf in case of a lawsuit or court action. Since maintaining individual agents in all 50 states can be complicated, many new brokers opt to work with process agent companies that manage coverage nationwide.
Review freight broker training
Although formal training isn’t required, it can be beneficial to enroll in a freight broker basics training course to build foundational knowledge. These courses cover essential topics like managing freight movements, negotiating with carriers, and maintaining regulatory compliance—valuable insights for new brokers navigating the industry.
Get insurance
Freight brokers often need insurance coverage to protect against financial loss. This can include liability insurance and all-risk per-load coverage to safeguard against potential claims. Quick and affordable insurance options are available through brokers specializing in transportation.
How much does it cost to become a truck broker?
While starting a freight brokerage is more affordable than many other industries, the costs can still add up quickly. One of the first steps to success is determining your break-even point, as you won’t generate profit until these initial expenses are covered. To legally operate as a freight broker, you’ll need to pay the following minimum costs:
- DOT Authority: $300 application fee
- Surety bond: $1,800 – $10,000 annually (depending on your credit)
- Insurance: $1,500 – $3,000 annually
- Processing agent: $50 – $150
These baseline expenses typically total $5,000 to $10,000. However, successful brokers understand that additional investments are critical for scaling their business and maintaining smooth operations.
Is being a freight broker hard?
The short answer is yes. For every three new brokerage authorities issued, only one remains active after two years—a clear indicator that success in this industry requires persistence and hard work. However, while challenging, becoming a successful freight broker is achievable with the right mindset, effort, and strategy.
If the idea of making over 60 cold calls a day to build a book of business while managing a variety of back-office tasks sounds overwhelming, you may consider starting as a freight agent or working as an employee of an established brokerage. This path allows you to gain experience and build relationships without the financial burden or operational risks of running your own brokerage—setting you up to launch your own business later.
On the other hand, running a brokerage offers attractive benefits, such as keeping 100% of the profits. The flip side is that you’re responsible for startup and ongoing expenses that can cut into your margins. You also assume significant financial risk, including the possibility of unpaid or short-paid invoices. Without the support of receivables insurance, you bear the full burden of any payment issues.
In contrast, working as a freight agent under a licensed broker eliminates many of the risks and operational headaches. As an agent, you can focus solely on growing your business without worrying about back-office tasks such as accounts receivable/payable (AR/AP), credit checks, carrier vetting, or freight claims. Although you won’t keep 100% of the profits, many brokers allow agents to retain their own customers, helping you build equity and gain valuable experience.
Get transportation broker experience and training
To become a freight broker, the right training and experience are essential—ideally before securing your trucking authority. One of the most effective ways to gain this experience is by working with a coach or mentor who is already thriving in the industry. Alternatively, you can start by working under a successful brokerage to learn the ropes firsthand.
There are also plenty of self-guided learning resources. Podcasts and blogs like Freight 360 offer valuable insights, while freight broker training programs provide structured education on the skills needed to succeed. Continuous learning is crucial, even after you’ve launched your business. Staying updated on industry trends, mastering new tools, and networking with other brokers will help you adapt and thrive. Many top brokers continue working with mentors throughout their careers, ensuring they grow alongside the evolving market.
Find customers and carriers
Securing shippers takes consistent outreach, often starting with cold calling. Online databases, directories, and paid lead lists offer valuable contact information to target potential customers. Setting up Google Alerts with relevant industry keywords is another smart way to stay ahead, identifying new companies and projects in need of shipping services. Once you establish relationships, ask for referrals to expand your network.
To maximize your efforts, batch your contacts before each day’s calls. Whether you organize them by region, industry, or commodity, having a plan will improve efficiency and outcomes. Thoughtful preparation shows in your results.
For more tips on gaining customers, check out Episode 51: How to Target New Customers.
Finding carriers involves a different process—and it’s just as important to vet each trucking company you work with to ensure reliability. The easiest way to connect with carriers is through load boards. Posting loads or searching for trucks on platforms like DAT load board streamlines the process, while features like saved searches notify you when matching trucks become available. The DAT Directory, included with every DAT load board plan, is also a great tool for researching potential carriers.
Use these steps to ensure a carrier is reliable:
- Check carrier authority: Use the FMCSA’s Company Snapshot tool to confirm the carrier has an active authority. This tool also provides insights into their fleet size, safety ratings, and inspection history—key indicators of their reliability.
- Review carrier reputation: Browse carrier reviews in the DAT Directory or on Google. Focus on patterns in the feedback rather than isolated complaints, as recurring issues are more telling than one-off negative reviews.
- Confirm insurance coverage: Verify the carrier’s insurance meets the standards required by your customers. Insurance details are available on the FMCSA website.
- Request references: If you have any doubts, ask for referrals from other brokers or shippers who have worked with the carrier. Their firsthand experiences can offer valuable insights.
Avoid common freight agent pitfalls
To achieve long-term success as a freight broker, it’s important to be aware of and overcome common challenges that often lead to high turnover in the industry. Here are key pitfalls to avoid:
- Lack of industry knowledge: Success starts with researching how to be a freight broker and understanding the industry before launching a business. Without foundational knowledge, it’s easy to make costly mistakes early on.
- Poor cost management and cash flow planning: Accurately factor in overhead, freight rates, and operational costs to ensure profitable pricing. Maintain healthy cash flow so you can seize growth opportunities and avoid relying heavily on credit.
- Neglecting technology: Leverage TMS software, load boards, rating tools, and tracking systems to streamline operations.
- Spreading yourself too thin: Trying to be a jack-of-all-trades often leads to mediocre performance across the board. Instead, focus on a niche area of freight where you can excel—whether that’s refrigerated goods, flatbeds, or LTL freight.
- Neglecting relationships: Strong relationships with carriers and customers are the backbone of a successful brokerage. Without reliable carriers or loyal shippers, your business will struggle to grow.
For more on these topics, check out Episode 53: The Basics of Brokering (A Typical Broker’s Day).
Succeed as a freight broker
Starting a freight brokerage comes with its fair share of challenges, but by following the recommendations in this guide, you can set yourself up for long-term success. The key to thriving in this industry is preparation—take the time to learn before you leap. Research how to become a freight broker, understand the business dynamics and build the necessary skills to navigate the competitive landscape before launching your own operation.
DAT customers can take advantage of an exclusive offer—20% off the Freight Broker Basics Course from Freight360. Normally priced at $749, this essential training is available to DAT users for $599.
Take the next to become a freight broker today
With the right preparation and strategy, becoming a successful freight broker is achievable. Focusing on essential steps like securing licenses, building carrier relationships, and managing costs effectively will help create a profitable, resilient brokerage that thrives in the competitive transportation industry.
Start your journey to becoming a successful freight broker
DAT is committed to the success of your business. That’s why we’ve partnered with Freight360 to offer the best freight broker training and coaching available to our customers. Freight360 has designed a comprehensive introductory freight broker training course to give new brokers the best chance for success. Learn how to make your brokerage more successful with an exclusive discount through DAT. Sign up today to receive your promotion.
