A freight broker is a middle person who arranges Transportation for shippers so that the cargo is moved from Point A to Point B. Most of the time shippers deal with Freight Brokers to arrange transportation for their loads until unless they find a reliable Transportation Company that can manage all their loads.
Along with running their own Trucking operations, many Transportation companies have started doing two things: one is to set up their own Freight Brokerage division so that they can maximize the profit and the second is to sign up directly with the shippers. By doing so, the middle person (Freight Broker) is cut out. This helps the Trucking companies increase their annual return and maximize the net profit as mentioned above.
The trucking business is highly regulated and so is Freight Brokerage. Many companies in the Transportation business get involved in Brokerage without proper paperwork (Authorities and Permits). Some Carriers also start Double Brokerage without understanding the consequences, it can have, if they are caught by DOT or if someone files a case against them.
In the USA, if a Broker or Freight Forwarder engages in interstate Brokerage without proper Authorities and Brokerage Permits, then they might face a civil penalty with can exceed more than USD 10,000. Furthermore, if there is any third-party injury, the concerned carrier will be liable to pay for all the valid claims regardless of any specific amount.
Moving forward, we highly encourage all our clients who would like to engage in Freight Brokerage or become a Freight Broker that they do their due diligence and get all brokerage permits along with the Freight Broker Bond for USD 75,000. At MAZE Consultancy we can get you set up with Freight Brokerage Permit and also the Freight Brokerage Bond for USD 75,000. We also have a training course “Truck Dispatcher and Freight Broker Specialist” which will give you advanced and practical knowledge on how to be successful as Freight Broker.
For more information call MAZE Consultancy at 905-826-2919 and one of our consultants will share their expertise and give you the best advice.