The transportation industry is a vital part of which freight brokers play a key role.
E-commerce has made it easier to ship and transport goods across the country and freight brokers help with tracking and facilitation of shipments.
It may be beneficial to find out what a freight brokerage does and how you can become one in Tennessee if you are interested.
Here is what it takes to become a freight broker along with some essential FAQs about this lucrative profession.
Article Table of Contents
- 1 Requirements for Tennessee Freight Brokers
- 2 How to Become a Freight Broker
- 3 Salary for Freight Brokers in Tennessee
- 4 Frequently Asked Questions
Requirements for Tennessee Freight Brokers
Tennessee residents can become freight brokers, just like people in all other states.
These guidelines are provided by the FMCSA (Federal Motor Carrier Safety Authority) Department of Transportation agency.
FMCSA requirements require that you are a high school graduate, or a GED holder in order to be licensed as a broker.
You must also follow the application process for a broker’s license, or MC Authority.
How to Become a Freight Broker
Attend freight broker training school
Although it is not required by law, a freight broker training school is highly recommended.
Freight broker training school can help you get the tools that you need to manage a profitable brokerage business.
Freight broker schools often offer in-person training to give you more practical experience.
Other training schools offer online self-study classes.
Freight broker school will help you learn about the industry, technology tools, best practices, and how to run your freight broker business.
You can choose the classes that you require to be a successful freight broker.
Taking part in online forums and reading publications about shipping, trucking, and logistics can provide insight into the trucking industry.
Register your company and create your business plan
Acquiring a freight broker license is your first step to getting started in your business.
You will need to choose a name for your freight brokerage and register your company with the licensing department in your area.
It is up to you to decide what legal structure best suits your business.
A majority of freight brokers prefer an LLC or limited-liability corporation.
Once you have registered, you will be issued a tax ID, as the IRS will provide you with a tax ID number.
The next step is to create a business plan and apply for credit.
Choose the right carrier
Your brokerage business success depends on the selection of the right carriers.
It is important to choose reliable, trustworthy, and reliable carriers who have worked in the same field as your business.
You can search online for carriers or get referrals from brokers within your network.
Meet licensing requirements
Before they can work in this field, all freight brokers must comply with the legal requirements.
Apply for a USDOT number at your state’s Department of Transportation.
Then you will need to complete an OP-1 freight broker request.
This takes approximately three to four weeks and is $300 to complete and submit.
Once your application is approved by the Federal Motor Carrier Safety Administration, (FMCSA), you will receive your motor carrier number via mail.
Wait 10 days before your registration is complete.
Once your registration is complete, you will receive your full MC authorization to operate your business.
Get a freight broker bond
You must apply for a BMC-884 or freight broker bond.
To show carriers and companies that you have the financial backing necessary to cover you in case of an emergency, the bond requirement is $75,000.
The bond is similar in concept to business insurance.
Before you are approved, your personal credit and the financial stability of your company will be assessed by the surety who provides your bond.
Your credit score will determine the premium percentage.
File your BOC-3
BOC-3 provides coverage for your entire business.
This will need to be filed in every state where you are operating.
Before you can file, you will need to choose a process agent.
You will need a process agent to handle the legal procedures in each state you are operating in.
Salary for Freight Brokers in TennesseeAnnual Salary Range: Annual Salary by Location:
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Regional Salary in Tennessee
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* Employment conditions in your area may vary.
Frequently Asked Questions
How much does a freight broker make?
Freight brokers work either full-time, part-time, or both.
A freight broker’s salary depends on their experience, industry knowledge, job status, and geographic location.
The average salary in the U.S. is $61,891 per annum with salaries ranging from $43,000 to $108,950 annually.
What training for becoming a freight broker is available in Tennessee?
Brooke Transportation Training Solutions and Ed2go are two of the most renowned training programs for freight brokers nationwide.
The two companies offer a comprehensive 180-hour training program for all students.
They also have industry professionals who are course instructors.
There are many institutions in Tennessee that offer Brooke Transportation/ed2go, including:
- Tennessee State University (Nashville).
- Southwest Tennessee Community College (Memphis).
- Nashville State Community College (Nashville)
What are the best freight brokers locations in Tennessee?
The best chance of success for freight brokers is when they are near manufacturing hubs that are near major cities.
The two largest cities in Tennessee are Nashville and Memphis.
You also have the option of Knoxville, Chattanooga, and Clarksville.