How to Become a Freight Broker in Arizona
Looking for a great new career? Becoming a freight broker is one of the top-rated ideas for home businesses out there, thanks to the relatively low start-up costs – time and money – and solid returns. Also, job offers for freight broker and agents in Arizona are growing. On this site, we’ll show you where to get the best freight broker training courses in Arizona and get your career off to a flying start.
With a strong economy and a surge in consumption though online shopping, the need for freight brokerage services is set to grow.
What do freight brokers do?
The transportation industry in Arizona is a huge employer, and the Arizona Trucking Association represents 110,000 workers. These workers are responsible for moving most of the food, clothing and equipment for citizens in the state. A Freight broker/agent is responsible for making sure shippers can find the right carriers – trucking companies or owner operators – to move those goods to their destination, and as such for part of this crucial logistics function.
Owner operators get loads by posting the availability of their trucks on load boards or contacting directly with brokers and agents. Freight brokers work for shippers, and search load boards or use their contacts with carriers to move the goods. Freight broking involves agreeing terms between the shipper and the carrier, including shipping rates and delivery dates, resolving problems with the delivery and settling claims that arise. A large part of this work may be carried out by an agent, but it is the freight broker, who holds a license, surety bond and insurance, who is ultimately responsible. Freight broker agents fulfil both functions, providing a broader logistics service.
Freight Broker License Requirements in Arizona
While the state of Arizona has no training or other requirements for freight brokers/agents, FMCSA (Federal Motor Carrier Safety Administration) requires that brokers be licensed. Licensees must have a high school diploma, hold a $75,000 surety bond and take out cargo and general liability insurance. The license – known as an MC Authority – has an application fee of $300. Additionally, if a broker wishes to operate in states other than Arizona, he or she will need to designate freight agents in each of those states and inform FMCSA. More information on freight broker license requirements here.
The cost of the $75,000 surety bond will depend on your credit rating. In the normal range costs will be between several hundred dollars per year to several thousand. Most will pay $4,000 to $5,000 per year. Prior to 2013, the bond requirement was only $10,000, but this was increased by the Moving Ahead for Progress in the 21st Century (MAP-21) Act. Specifically, the requirement is that the broker has either a $75,000 surety or a $75,000 trust fund. The difference between these two is that with the trust fund (BMC-85), the broker is required to put up the full $75,000. With a surety bond (BMC-84), the broker pays an annual premium to a surety company, which will work to mitigate claims on behalf of the broker. For most, this is the single biggest cost to broker freight.
To become a freight broker takes the four to six weeks for your license application to be processed, plus the time you want or need to spend in training.
Freight Broker Schools in Arizona.
You can find excellent freight broker training at local community and technical colleges in conjunction with ed2go. These instructor-led programs are delivered largely online over six months and are self-paced. You’ll learn the basics of freight brokering operations, how to use software and online that are common to the industry, transportation law, contracts and insurance, and how to set up your own brokerage business. Graduates get to participate in a weekly job opportunity event. This online course, in partnership with Brooke Transportation Training Solutions is 180 hours long and lasts six months. The instructors are Jan Roach, who joined the transportation field and became a partner in a freight brokerage operation in 1995, and Jeff Roach, who has been in the transportation and freight brokerage industry since 1986, founding and operating his own freight brokerage in 1995. He grew his brokerage into a multimillion-dollar business.
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You can also consider Brooke Training Solutions’ presential courses.Brooke offers freight broker schools nationwide with intensive courses offered in Dallas / Fort Worth, TX, Charlotte, NC, Jacksonville, FL, Ontario, CA, Indianapolis, IN, Chicago, IL and Atlanta, GA, but not, unfortunately, in Arizona. However, their programs are also available online. They offer a 5-day basic course for $2,495, and advanced freight broker course for $3,995.
and Load Training, which offers a five-day in person course in Phoenix and other locations. This latter freight broker school is one of the bigger names in the business, having been in operation since 1987. Prices range from $599, for a fully online course to the full 5-day hands-on broker course which costs $5,500.
What will I learn at a freight broker training school?
Freight broker training will prepare you in freight brokering and provide you with everything you should know to run a successful freight brokerage or operate as a freight broker/agent.
The key element of any training program will be the legal aspect. You will need to know about transportation law and how to draw up a brokerage agreement. You will need to understand the broker’s responsibility in shipping the goods and know how to handle any insurance claims.
On the practical side, you will need to understand load and truck types. You’ll learn how to match different types of cargo with different types of truck, how dangerous goods need to be managed and how trucking companies manage routes. You’ll know the difference between full truck load (FTL) and less-than-truckload (LTL). You’ll also learn how to determine rate quotes and how to negotiate with the parties involved.
Freight broker training will prepare you to make the most of commonly used software and online tools such as load boards. As load boards have fees associated, you’ll want to make sure that each use is as efficient possible. Long term, you’ll want to develop your own database of carriers, and the best schools will train you how to do this.
To run a brokerage, you’ll need to deal with bookkeeping, accounting and financial management, to make sure you have enough working capital to finance your business.
Lastly, you’ll need get training in sales and marketing. Because company overheads can be low and commissions high, there are many other brokers/agents trying to get their share. You’ll have to perfect your sales pitch and know how to differentiate yourself from the crowd. On the practical side, you will learn best practice in the use of the phone and email, how to advertise and direct marketing techniques for driving leads.
Training for agents is the same as for freight brokers. The difference between a broker and an agent is that the broker holds a license, has a surety bond and insurance. A freight agent may perform all the work associated with a broker but does not provide the guarantee of service or insure the cargo. Brokers may work with many agents, with agents taking the larger share of the commission for handling most of the administrative work, but the broker ultimately earning more by handling more shipping contracts.
How much to freight brokers make in Arizona?
The United States Bureau of Labor Statistics reports salary data for Cargo and Freight Agents for the year to May 2018. According to their data, entry-level freight brokers get started with salaries of $25,060 per year. Such salaries would typically be for employees with little or no training or experience. At the top end, salaried licensed freight brokers earned $62,100 per year. The average was $43,420. Pay in larger cities like Phoenix will be higher. Note that these salaries exclude commission payments which may significantly increase overall compensation. Also, licensed freight brokers with their own brokerage business can earn substantially more.
Where to get a freight broking job
As you might expect, most freight broker job offers are for positions in Phoenix, AZ, but also Tucson, Mesa, Chandler, Glendale, Scottsdale and Tempe. All the large national logistics companies have a presence in Arizona and jobs can be found on the most popular job boards. The best freight broker training programs will also help you find employment, by providing you with contacts, showing you with whom to network and offering a job board for graduates.