How to Become a Freight Broker in California

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How to Become a Freight Broker in California

As the liaisons between shippers and companies providing freight services, freight brokers play an important role in the world of commerce and trade.

Without them, shippers would not be able to navigate their way through the various parts of the supply chain to safely get their cargo to their respective destinations.

In addition, cargo owners would not be able to ship their goods as efficiently and securely.

Freight brokers are an integral part of the freight and shipping industry, and, as a result, they are essential to national and international commerce as a whole.

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If you are in California and you can picture yourself pursuing a career in freight brokerage, read our information about the profession and tips to get you started.

Freight Broker Duties in California

The duties of freight brokers in California are basically the same as those of freight brokers elsewhere.

Their duties and responsibilities include: 

  • Building relationships with clients and carriers
  • Serving as intermediaries between clients and carriers
  • Researching cargo companies
  • Arranging for the transportation of goods and providing tracking information
  • Ensuring that clients’ goods are shaped safely and securely

Freight brokers in California can expect to facilitate both inland freight services (e.g., across mainland US) and coastal shipping services (e.g., across the Pacific Ocean) due to the state’s geographic location.

Their services can also range from being national to international in scale.

Because of all these possibilities, California freight brokers have to be familiar with a very wide array of freight brokerage services.

Licensing Requirements to Become a Freight Broker

Here are the main steps to becoming a freight broker in California: 

  1. Getting Your USDOT Number – This is a crucial first step, as your USDOT number will be required for certain application materials. After obtaining your ID number from the US Department of Transportation, you can use it for all your paperwork.
  2. Apply With the FMCSA – The job of freight brokers is mostly regulated at the federal level, not the state level. What this means is that you will be working closely with the Federal Motor Carrier Safety Administration (FMCSA).

Once you have completed their OP-1 Form, you have to pay the $300 application fee.

Afterward, the FMCSA will issue your Motor Carrier Number (MC) and your 10-day protest period will begin.

If a company does not file a protest to your application during this period, you will be ready to move on to the next step.

  1. Getting Your Freight Broker Bond – This bond is required to legally operate in California as a freight broker. The purpose of the freight broker bond is to protect the carriers you work with in case you fail to pay them.

According to Form BMC-84, securing this bond satisfies FMCSA’s registration requirements.

Currently, the minimum bond requirement is $75,000.

However, the actual cost of your freight broker bond will be just a tiny percentage of that amount, depending on factors such as your personal background and your credit score.

Brokers with good credit can expect to pay a bond premium between 1.25% and 4% of the total bond amount.

  1. Designating Your California Process Agent – Picking a legal process agent is a requirement in every state, not just California. This agent’s role is somewhat like that of a lawyer; they receive and process legal actions for you.

You can designate your agent by filling out Form BOC-3.

Freight Broker Programs

Although there are no education or training requirements for operation, the majority of freight brokers opt for freight broker training courses.

There are a plethora of options to choose from, including in-person and online courses.

Some courses are even offered by public universities in California.

Examples of freight broker training programs in California include: 

  • San Diego State University (SDSU) – This 6-month training program teaches you the “basics of how to run a domestic freight brokerage or agency in the United States.” For a total of 180-course hours, students pay $1,895.
  • Brooke Training School – Located in Ontario, California, this program offers training to veterans and is “Workforce Solutions Vocational Rehabilitation”-approved by the US Department of Labor. For information about the program’s cost and duration, students can visit the school’s website.
  • California State University, San Marcos – An online course, the CSUSM training program goes over the “ins and outs of the industry from experienced freight brokers.” The program, which takes 6 months or less to complete, costs $1,995.

Salary

According to salary.com, the average freight broker in California makes $37,377 (as of December 27, 2021).

The salary usually ranges from $35,119 to $39,672.

Compare California’s average to the national average, which is $33,462 for the same job, with the range falling between $31,441 and $35,517.

Annual Salary Range:
$50K
$58K
$67K
10%
50%
90%
Annual Salary by Location:
Location Avg. Annual Salary
Los Angeles $59,657
San Diego $56,923
San Jose $66,198
San Francisco $65,935
Long Beach $58,814
Fresno $52,473
Sacramento $57,015
Oakland $62,770
Santa Ana $58,866
Anaheim $58,946

Sources

https://www.suretybondsdirect.com/educate/what-do-freight-brokers-do

https://www.bryantsuretybonds.com/blog/california-freight-broker-license-guide

Frequently Asked Questions

Is it possible to get into the industry without a bond or license in California?

Yes, but you would have to be working for another broker, and your profits would be split.

If you want to work independently, you need a bond and a license.

Can I work from home as a freight broker in California?

Definitely.

In fact, most freight brokers work from their own home offices.

Is this a profitable career option in California?

Absolutely.

With an economy that is larger than most countries (not just states), California is a hub for shipping and freight services.

Plus, California-based freight brokers earn more than the national average, with an average income of $37,377 (compared to the national average of $33,462).

USA Freight Broker License by State


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