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How to Become a Truck Freight Broker in Los Angeles, California
Freight brokers match businesses that have cargo-shipping needs with the trucking companies that provide those services. Freight brokers are always in demand, especially in highly populated states like California, but professionals will need to meet both federal and local requirements for licensing. To become a truck freight broker in Los Angeles, you’ll need to first get a surety bond and a USDOT number, along with any certifications you choose to pursue.
Freight Broker License in California
If you’re interested in becoming a freight broker, Los Angeles is a great city to choose. The state of California employs more freight brokers than any other state, which means there will always be a demand for your services. Your steps to becoming a broker depend on whether you plan to start your own business or work for someone else.
To get a freight broker license in California and start a business, you’ll first need to satisfy the Federal Motor Carrier Safety Administration’s requirements for working in the field. This means getting a surety bond that insures your work and obtaining a USDOT number. There are specialized classes you can take that can help you get up to speed on running a freight brokerage, and you’ll also need to obtain a business license.
If you want to work for an existing brokerage, it may be beneficial to take the Certified Transportation Broker exam. Certification can be pricey, but it will pay off if it helps you beat out other applicants for a job. The industry will continue to grow over the next few years, especially as demand to get products in the hands of customers quickly increases, so there should always be opportunities for skilled freight brokers.
Get a Freight Broker Bond
No matter where you’re doing business, you’ll need to follow the Federal Motor Carrier Safety Administration’s requirements that you have a surety bond of at least $75,000 before you can get a license. You’ll have to pay a premium for that bond, and the rate varies from between 1 and 4 percent of the issue amount, depending on your own credit score and current standard market rates.
The surety bond serves as a protection against any lawsuit that could come as a result of the carriers you choose. Although you’ll get your truck broker license California through the government, your surety bond can come from an insurer of your choosing. Price around to get the best rate possible.
Carry Other Types of Insurance
Before you can apply for a freight broker license in California, you’ll first need to obtain a USDOT number from the FMCSA. An MC number is also required of anyone who transports federally regulated commodities, as well as the service providers who arrange for these items to be transported. To apply for these numbers, you’ll need to go through the Unified Registration System, available online at www.fmcsa.dot.gov/registration.
You may need to include your USDOT number on your application for a California freight broker’s license. Even if you’re not asked, though, attach the information to your application. Doing so could accelerate the application process.
Get Freight Broker Training
Although you won’t need any special certifications to get a freight broker license in California, it can help to go through the training offered in the state. This will help you learn about the regulations specific to the state where you plan to work. Although there are many choices for best freight broker training 2019 in California, two stand out.
Perhaps the best freight broker training 2019 for those living in Los Angeles is available at Brooke Transportation Training and Services in Ontario, California. This five-day program walks you through everything from how to get your license to daily operations tips. But you don’t even have to leave the house to attend California State University East Bay, which has courses available online. You’ll get one-on-one instruction and coursework based on a curriculum written by veteran freight specialists.
Special Certifications for Freight Brokers
No special certification is required to get a truck broker license California. However, on a national level, the Certified Transportation Broker exam can give you an edge over the competition. When you’re trying to drum up new business, companies may be impressed that you hold this additional credential.
Unfortunately, taking the exam to become certified will cost you. The exam costs $1,325, which is in addition to an $800 fee to take the exam study course. You’ll also have to purchase a textbook titled "Foundations of Business, 5th Edition," which you can rent online for a small fee.
Business Options After Licensing
Once you’ve gotten certified and completed the best freight broker training 2019 available, you’ll be ready to start working as a freight broker. One of the most popular options is simply to join an existing brokerage, which will give you experience in the field. According to the U.S. Bureau of Labor and Statistics, as a category, cargo and freight agents average $44,980 per year, and many employers in Los Angeles will pay at the higher end of the scale due to the higher cost of living there.
But for many newly minted freight brokers, starting a business is the way to go. All you’ll need is a computer and the right software to put your knowledge to use. You’ll also have to market your business to get new clients, but as your brokerage grows, you’ll find referrals bring even more business your way.
Starting Your Own Brokerage
If you opt to start your own brokerage rather than working for someone else, you’ll need to go through the typical steps to register your business in California. The City of Los Angeles has a startup guide as well as online registration available on its website at business.lacity.org/start. As with any type of new business, you’ll need to choose a name and get set up to pay taxes on any money you make.
To get your truck broker license California, you’ll simply need to apply through the link, providing information about your business. You’ll also need to request an Employer Identification Number from the Social Security Administration, which will set you up to eventually hire employees and pay them. The California Secretary of State’s website can help you make sure your desired business name is available.
As a business, you’ll also have to register with the City of Los Angeles so that you can pay business taxes. Businesses selling products have to register to pay sales tax, but that doesn’t apply to service-based companies. However, you will need a Payroll Tax Account Number once you start paying employees.
Demand for Freight Brokers
As the state with the highest employment level for the occupation, California is the perfect place to start a career as a freight broker. The transportation industry as a whole is growing, which will only boost demand for brokers even higher. BLS predicts 7 percent growth in transportation and warehousing through 2022, but that’s slightly lower than average for all occupations during that time.
The demand to have items delivered to customers quickly has only driven demand for freight brokers to help handle it all. Being able to use logistics software to provide the most efficient service to multiple customers could give a freight broker an edge over the competition.
- The FMCSA only regulates interstate commerce, so if you only intend to broker freight within California, you don't need to obtain an operational authority.
Stephanie Faris is a novelist and business writer whose work has appeared on numerous small business blogs, including Zappos, GoDaddy, 99Designs, and the Intuit Small Business Blog. She worked for the State of Tennessee for 19 years, the latter six of which were spent as a supervisor. She has written about business for entrepreneurs and marketing firms since 2011.