Discussion in 'Starting a Trucking Business' started by Michael Ludwig, Feb 4, 2014.
Well said Boss
Mloxy, if it wasn't clear already, understand that the 75k bond is not normally the amount you need to fork out or hold as collateral. Your insurance company, based on your credit worthiness and goodstanding, will ask for an annual premium to secure this bond for you. Depending on your financials, the premium may be between $500-1500 annually ( higher if you are new to the industry or have pending claims against you). The new rules are positive for all. Brokers need to show good faith, and quality carriers should be picky to only work with those who can prove they are in good standing and hold this bond. Hopefully, with due dilligence on both sides, we can weed out the lower tier of the broker market. This, coming from a broker.
Something we do that may help you. We are a trucking company. We have no interest in being a load broker. They know how to buy and sell freight, I know how to put trucks under it. Leave each to his own specialty.
That being said, we do have a customer base that looks to us to move freight outside of our normal operating areas. Since I know my customer very well, I contract with a load broker to move that excess freight. I make a little bit, the load broker takes the responsibility and takes his cut, the customer pays the bill and is exceptionally happy. As for me and the load broker ... we agree not to cut each other's grass. For all intents and purposes, we become an agent for the load broker. For us, the system works very well.
Is this a new law? I purchased an existing freight broker business about 3 years ago and the only thing the previous owner had (for 23 years) was the Intermediary Permit number.
Do I absolutely need to get that? What are the implications if I don't? I have been brokering freight in and out of the U.S., and no one has asked for that.
Thanks a lot, time to apply for a license then...
plus with the new laws if you have no authority in the US and you run a US load you are fully liable since you are not using an MC/Bond for protection...
let me specify: if you have the MC and the $75,000 Bond you are protected by this as you would be by an insurance policy, but if you have no Bond then you become unprotected so this would make you fully liable issues would arise. This means you could lose a lot more than you could gain from avoiding the MC and Bond process.
if you want to broker any freight touching US soil you really need the MC and the Bond.
That's correct theman. Freight movements in either direction are subject to the same regulations. My head and my fingers aren't working too well this morning!
If you do business in the USA at all, you need to have the bond. You can't run freight in/out of the USA without having US authority and following their laws.
If you are arranging freight shipments from the US to Canada, you will need a US Property Brokers Licence regardless of where you are physically located. If your customers only ship within Canada, this licence would not be required. The licence is very easy to obtain, however to get one, you must have a 75K surety bond on file with FMCSA, along with a listing of process agents in the US. You remember the old saying, "if something is worth doing, then it's worth doing it right"? If at any time you were to offer a load to a US based carrier, they would most certainly ask for your brokers licence. In addition, it shows your customers that you are serious about your business.
Are you sure that the licensing applies to Canadian load brokers too? I thought that this is the requirement of US brokers only...
I would like to add that if you want to build a reputation...you had better establish a system of checks to make sure you broker freight to carriers that are going to do what is required of them. There are many, many companies that will do a great job for you. But there are also some that will cause you a great deal of strife. Do everything in your power to get information about carriers before you give freight to them. Giving freight to the wrong company can cause you to lose the customers you have worked so hard to acquire. The more you are prepared to handle a variety of different scenarios, the more likely you are to succeed at your goals.
If a shipper has to blast out to unknown parties to find brokers to move their freight, it's not a shipper you want to do business with. Anything that has any good come out of it usually starts with a struggle. Take it from experience.
I kid, don't do that lol
what company are you with?
and yeah the authorities, surety bond, insurance are a must. plus they must be all separate from your trucking operation. so you would do everything off the brokerage side, sell freight to your own trucks and then broker some out. this way no catch where people thought it was all on your own trucks.
$75,000 surety bonds are in play now. not too hard to get if your credit is decent.
Hello mloxy. Before you start brokering any freight that you can't handle on your trucks, you should ensure that you have the proper licensing, surety bonds and trust accounts in place. One website to start with would be the NTBA's, www.ntba-brokers.com. Here you will find all the steps you need to take before you begin. As far as a website offering loads directly from shippers or manufacturers, I am not aware of one. If such a site does exist, I doubt the loads and the rates they pay would be very attractive or leave enough room to broker it to a carrier. You're best to find your own customers and service what you can on your own vehicles and offer the excess to other carriers after you have ensured that they will provide the same level of service as your own fleet would. Whether you are a carrier or a broker, it is all about customer service.
We are fairly new in the business. So far we have been only using our trucks to move freight for our customers and we were also getting loads from the load brokers. We are trying to expand and start to broker some loads.
Is there any website where you can find different companies posting available loads, where the load brokers can find loads directly from shippers - manufacturers? Sometimes I see the same load posted by a few load brokers at the same time on the loadlink. It looks like they have the lead from the same source at the same time.
I'm talking about CAN - USA trips.
Any ideas how this works?
I will appreciate your input.