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Getting Started in Freight Brokerage - Setting Up Your Business

By Dave Ferrara
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Expert Author Dave Ferrara

Before you go about filling out the forms and applications for your Broker Authority (Freight Broker License), you need to make sure you have a business entity set up and ready to go. This can be a rather daunting task, but can actually be quite simple if you take a little time to educate yourself and just get it done.

First of all you need to decide on a form of doing business. You have several different options here. Your choice should depend on where you see your company going in the next several years. What about 10 or 20 years down the road? Are you going into business alone? With a friend? Do you plan on expanding or hiring other freight agents? These questions, among other considerations, will help you decide how to go about starting your business.

A corporation is probably the most desirable of all forms of doing business, as it separates your assets (as an owner) from the assets of your company. This means if something goes terribly wrong and someone wants to sue your company, they can take money from the company, but in most cases cannot take any money or assets from you (your house or bank account, etc.). As a freight broker, dealing with large trucks and potentially very valuable cargo loads, this is very desirable for you. The drawbacks to incorporation for your company are somewhat more rigorous regulation and complicated tax law. It is also somewhat more difficult to become a corporation, as there are more steps and complicated application process. The time it will take is worth it. An alternative from a corporation is an S Corporation, which carries most of the same benefits as a Corporation, but is designed for smaller companies still in need of incorporated status.

Less desirable than a Corporation and S Corporation, but still relatively safe, is a Limited Liability Company (LLC). An LLC offers similar liability protection, where liability for the company does not generally extend to an owner's personal assets; it is limited to assets in possession of the company. An LLC can be desirable especially for those not planning on sharing ownership of the company or expanding too much.

Sole Proprietorships and Partnerships should be avoided if possible, as these forms of doing business do not offer protection of personal assets. With these your house or anything else is fair game to satisfy company debts and legal liabilities. The one thing they do have going for them, is that they are relatively easy to set up. But setting up an LLC or Corporation is well the small additional effort required. If you do choose to set up a partnership, be sure to draft a thorough partnership agreement. Too many partnerships have gone sour because of unclear agreements and misunderstandings among partners. A clear legal agreement can go a long way to remedy this.

If you plan on using a business name other than your own name, you will need to check to make sure that that business name is not already taken. Once you are sure your desired DBA (Doing Business As) name is not taken, you can register it with the appropriate authorities.

This is intended as a general overview, not as a thorough or exhaustive guide. The information listed here may not be correct, as laws and regulations vary from state to state and county to county. Though most of this can be done without the aid of an attorney, it may be wise to consult with an attorney in your area.

BIGrigdave


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How to Finance a Startup Freight Brokerage With Factoring

By Marco Terry
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Expert Author Marco Terry

One industry that is improving, along with the economy, is transportation. Many existing transportation carriers and freight brokers are seeing their revenues increase as the industry picks up. The improved economic outlook and the condition of the industry have also prompted individuals with industry experience to start new freight brokerages.

Although running a freight brokerage can be very profitable, the business is very cash flow intensive. You need to keep your drivers happy, which means they need to be paid quickly. In the meantime, your large corporate customers will demand that you give them net 30 payment terms. In other words, your drivers want you to pay them quickly and your shippers want to pay you slowly. As a freight broker, you are expected to manage that payment discrepancy and keep all parties happy.

Few startup or growing brokers can afford to wait 30 days to get paid by their clients. Simply, they don't have the funds to cover the operating expenses of the business. This is a big limitation for them and prevents them from growing the business and capitalizing on opportunities. To complicate matters, getting business financing for a freight brokerage is very difficult. Few banks will provide business loans to the industry in part because they don't have hard assets (i.e. real estate) to use as collateral. Either way, a business loan is no necessarily the best solution either.

A better alternative for many freight brokers that have cash flow problems is to use freight factoring. This solution is designed specifically to help companies that have clients that pay in 30 days but need the funds sooner. Freight bill factoring provides a cash advance on the net 30 invoices, providing the necessary funding to pay drivers and other business expenses in a timely fashion.

One of the most attractive features of freight factoring is that most freight brokers can qualify for it - even startups. This is because factoring companies consider your freight bills from strong shippers to be your best collateral, and they are usually happy to advance funds against them. This means that brokers with few assets except a strong roster of shipping clients can usually qualify. Aside from having strong shippers, most factoring companies will only work with freight brokerages that have no lawsuits, judgments or liens.

Freight bill factoring is an ideal solution for freight brokers and transportation carriers who can't afford to wait 30 days or more to get paid by their clients.



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To Open a Freight Brokerage

By Sharon D. Martin
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Expert Author Sharon D. Martin

To open a Freight Brokerage is not necessarily hard or real expensive but, it does require proper training and correct procedures. I seriously suggest you be a Freight Broker Agent for a year or two before opening a Brokerage. Why? Because you will need to know the exact same things an Agent knows, and more. But if you don't want to go that route, you can put everything in place and then hire someone who is reputable and well experienced to run the Freight Brokerage for you. Yet it would still be a wise decision to at least have the proper operations training. That way you will have a pretty good idea of what will be taking place. You wouldn't want to put your money and your reputation out there and then trust it entirely to someone else would you? I know I wouldn't. And of course you can always hire a Logistics Consultant to help out when needed. But before you decide what you want to do, consider the following information:

FOR A BROKERAGE: you will need to have in place before you open your door for business: your License, UCR, BOC3, BMC84 or BMC85, a good working order knowledge, and although not required, I recommend that you carry what is called Contingent Cargo Insurance. You will also need to consider your finances. Do you have enough cash for, or a good enough credit standing for your $10,000.00 Bond? Will your cash flow allow you to pay your Carriers in a timely manner (usually within 21 days) or will you need the services of a Factoring Company? Do you plan to have any Agents, either In-house or Outside, or will you be doing it all yourself? Do you know how to use the Freight Broker tools you will need such as load boards and dispatch software?

FOR THE FREIGHT BROKERAGE AND THE AGENT: you will need to know how to build your Customer Base, where to find Carriers, how to check out both the Shippers and the Carriers. The different rates you will use and how to negotiate them. Where your pay structure comes in, contracts, legal aspects, and special equipment. What paper work and records to keep and for how long. What load boards to use and how to use them. When, where and how to start your workday, etc.

This may all seem a bit much and a little confusing and it will be without the proper training and guidance. So, before you open a Freight Brokerage, get the straight facts.

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The First Steps Toward a Successful Freight Brokerage

By Dave Ferrara
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Expert Author Dave Ferrara

The most important part of a freight broker or agent's business is his book of clients. A good list of customers is where a broker or agent goes to find freight to move. Of course, one should always be working on developing his list and finding new customers, but a strong list of people who have already done business with you, can provide business indefinitely, as long as you keep them happy.

To develop a list of customers who need your services, you will want to try a variety of resources. Most of your customers will be manufacturers needing to get their products to various buyers including distributors, retailers, and other supply chain members. Think of resources you could use to find companies needing to ship large amounts of goods, and start from there.

The first place to look may be companies you are familiar with, or possibly even already have a relationship with. Do you know anyone who works for companies that might need freight moved? Then take a look at your geographical area, and contact as many local companies as you can. You might have an upper hand if you can relate to these companies or their employees somehow.

You might also look into phone books, online directories, industry listings, or even lists compiled by numerous companies that can be bought, though these lists can become very expensive. There are numerous online sources of listings that can be had for free with a little searching.

Another alternative would be to pay someone else to find you leads. College students can be a great resource, since they'll work for little pay to gain experience. Offer to pay students a "finder's fee" for any lead they send you which turns into a sale. The advantage to this is that it allows you to spend more of your time selling, and less time searching.

It is important before you begin selling to understand the ins and outs of freight and the transportation industry. Do you know what kind of specific requirements your customers might have, and how to arrange for them? What weight limitations are there? Does a shipment need refrigeration? You may also want to try specializing in a specific region or industry. Becoming an expert in moving a particular type of freight might make you more desirable to companies in these industries, and help you focus your client search as you start out. You can always expand as business grows. You can even take classes for a freight broker license. That can help you find more freight in areas that require licensing.



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Owner-Operators Start Your Own Business

By B. Hathaway
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Expert Author B. Hathaway

Are you an owner operator tired of paying the company you work for to drive your own truck/van or in need of work and ready to do your own thing? It is not as hard as you may think it might be, it can get expensive to get up and running but it does not have to be. With the right tips and information you can start up for next to nothing.

First; getting your authorities also known as running rights would be your first step. These are types of licensing and permits that the government requires in order for companies to transport goods for others. These licenses and permit will vary depending on where you want to haul cargo to and from. You can hire a consultant or do the paper work yourself. Doing this yourself will save you thousands and give you a better understanding of your business and want guidelines you are expected to follow under the transportation act.

Second; having equipment or hiring owner operators is essential for your business, you will need one or the other or have both. If you are able working for yourself in the beginning will help your company get started if you are short on cash.

Third; Insurance. Right now there are competitive so make sure to shop around. You will need to insure your equipment and purchase cargo insurance as well. Forth; finding loads and/or contract. Using load boards and brokers will be the easiest way to start. If you have established contacts you may want to start giving them a call.

Fifth and very important getting paid. If you do not have very much cash and you are unable to wait then I suggest that you use a factoring company. When you are starting a company sometimes you are not able to wait 30 to 90 days to get paid from the company. Using a factoring company can put money in your account right away at a minimum fee. Shop around there is many.

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How to Use Freight Bill Factoring to Finance Your Trucking Company

By Marco Terry
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Expert Author Marco Terry

Managing the expenses of a growing transportation company involves a fair amount of juggling. There are fuel payments, driver payments and the constant need for repairs. Juggling becomes a need because most clients take 30 to 60 days to pay their freight bills, while expenses happen constantly. Although large carriers or brokerages may be equipped to handle costs while waiting to get paid, few small carriers can.

One way to solve this problem is to ask customers for quick pays. Many times, that strategy will work. But you will always be at the mercy of your customer. Another alternative is to secure business financing -- through a business loan or through freight bill factoring.

Freight factoring works by giving you an advance against for freight bills and is ideal to handle slow paying clients. The advance payment comes from a factoring company rather than from your client. This eliminates having to wait for your customers to pay, and provides you with the needed funds to cover business expenses.

For many transportation companies that are dealing with slow paying customers, freight bill factoring will solve this problem better than a business loan would. It targets the problem at its source since freight factoring is designed to help with slow paying customers. Freight factoring is flexibly and adapts itself to your monthly billings -- growing and shrinking as necessary. More importantly, it's easy to obtain. The biggest requirement to qualify is to have good credit worthy commercial customers. So even a start-up company, whose biggest asset is a strong roster of clients as a good chance of qualifying.

A typical transaction would work as follows. The carrier sends the freight bills and other information to the factoring company, who then issues an advance of 90% (sometimes this can be higher). Once the invoice is actually paid by the customer, the factoring company rebates the remaining 10%, less its fee. Fees vary and are based on volume of your billings and the quality of your clients.

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Revolution In The World Of Trucking And Freight Brokerage

By Ray Donovan
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Expert Author Ray Donovan

Trucking software is one of the most crucial systems that have been developed in order to ease the transportation industry, starting from the western countries like USA. For the last few decades, these trucking and freight broker software have always been the sole backbone of the industry, and helped us to do away with the basic manual operation of transportation to more advanced and modernized solutions, most of which are computerized.

If you are in a managerial position, and wondering how to ease the cumbersome and boring calculations of your fleet of trucks, then all you need is the trucking software. This eases not only the calculations but also the business correspondence and the reporting of the trucks and their maintenance department. Just a few years ago, all the trucking companies had to manage the individual intricacies of their business in a manual manner by keeping filed records of their incoming and outgoing payments, with simultaneous dispatch of loads, the generation of reports and filing of taxes. This task was all the more time consuming and required a lot of manpower at that same time. Thus, in order to shave off all the necessary hard work, the trucking software as well as the freight broker software has been developed.

In order to renovate the trucking business, successive improvements along with perpetual efforts in developing new software have been done. In the initial state, few companies had begun offering desktop software in order to manage the difference aspects of this business. Although they were quite helpful and at the same time, much less time consuming, after the advent of trucking software, the market had perceived an immense boost. Even though there were lesser costs involved in updating the existing infra-structure, the software was a dream to the freight brokers and truckers.

Web based trucking software was later manufactured for reduction of the extra hardware costs and seamless access from all around the world was added for its benefit. Also, the web-based freight broker software had addressed most of the companies that were small or medium-sized. In the modern era, all of the complexities like load dispatch or account management or even generation of reports and invoices, the trucking and freight broker software have made everything seem like nothing. Also, these companies have been benefitted by the use of the IFTA fuel tax software, which helped a lot in simplification of the filing of taxes.



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How To Start An Internet Logistics Company

By Alexander Gordon
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Logistics involves all processes from procuring raw material to delivering the finished products to the customers. Properly coordinating the logistics will definitely ensure the success of a business, hence the popularity of logistics experts. With proper control of logistics, a business can significantly reduce costs as well as improve profits. Good logistics management will ensure efficiency and promptness of service, resulting in customer satisfaction and retention. The nine areas of logistics are accounting, legal services, insurance, banking, information technology, website development, e-commerce, travel, and real estate. Logistics of a company is based on elements, such as, products being in the proper place, at the right time, adherence to quality, adequate quantity, setting the right price and conditions and reaching the right customers.

Kinds of Logistics Company You May Want To Consider:

Starting an internet logistics company is a very popular choice with people who want alternative ways of starting a logistics company. The main lure is comparatively lower start up costs as well as the speed at which information can be processed because of the internet. Make sure that you carefully research and find out all you can about the kind of logistics company you want to start. Analyze if there is a market for your company, carefully plan and execute your business plan, ensure there are adequate advertisements of your logistics company appearing in all media to help people know about you and seek your help. Seek professional guidance from accountants, attorneys, bankers etc before start up.

The popular Internet start up companies is those offering load brokerages as well as Internet freight matching services. Another popular kind of logistics companies are those that package their services and products into application service provider sites, and starting a website listing all the available internet logistics companies as well as information about them, helping million who seek the help logistics experts to improve their logistics.

Things to Consider While Starting an Internet Logistics Company:

Since they are popular, the competition may be tough; you can however seek and develop your own niche that makes the services you provide unique as well as advantageous to those who seek it. When quality service is offered, people will not hesitate to pay. Make sure your company gets reputation as ethical, dependable, and gets recognized as a quality service provider. Remember word of mouth publicity is the key to successful marketing, when your work is impeccable, you will automatically become popular. When every aspect of the business is carefully planned and executed, the process of starting an Internet logistics company will prove to be easy and rewarding.

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How to Start a Duct Tape Wallet Business - The Basics of Shipping

By Barry L Williams
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Expert Author Barry L Williams

"Yeah, and I need the wallet Overnighted."

Everybody wants their stuff yesterday until they find out how much it it going to cost to make things happen in their royal time frame.

As I write this article in 2010, having a duct tape wallet shipped overnight in the mainland U.S. or Canada is going to cost approximately Eighty U.S. dollars or about four times the retail value of the wallet. Somebody would need to own a duct tape wallet pretty bad in order to pay a "C Note" (one hundred dollars) for one of these babies...

Shipping Is An Odor That Lingers

Many folks (especially salespeople) forget that a sale is not legitimate until the customer accepts and RETAINS the purchased item, none of which can occur until you have made arrangements for the goods to be delivered.

To that end, here are a couple of concepts which can dramatically influence the effect of your shipping policy:

Control Your Customer's Expectation - this advice may sound a bit like cheating but I recommend telling customers that it will take longer than it actually will for them to receive their goods so you set their expectation at one level and then automatically exceed it. While this takes some finesse, it is not very difficult to accomplish because few folks are trying to exceed customer expectations in the first place!
Box Like You Have Golden Gloves - quality products that arrive damaged tend to make the recipients ill. No one likes to see good stuff wrecked but the double edged sword of packaging weight and packaging integrity make this a difficult call. Simply ensuring your wallets are protected with a layer of paper wrapping inside the shipping envelop will eliminate potential damage from friction and handling.
Learn Maximum Sizing - Canada Post uses a plastic template with a slot in it to determine if packaging conforms to a regular size. To qualify for letter size the envelop needs to be no larger than 15" x 101/2" by 3/4" wide and less than 1.1 pounds in weight. We can fit three wallets into this size of bubble wrap envelop which reduces the shipping cost by 50% of what we would normally pay to ship as a package.

Examples of 2010 Canadian Shipping Costs

If you are shipping across international borders you need to consider customs and brokerage fees as well as the delay enhanced security checks sometimes take. All this can be handled efficiently and cost effectively through any major carrier like UPS, FedEx or DHL.

Here are a couple of actual costs to ship wallets around the world.

One wallet (Canada Post) - $ 2.75 arrives 4 - 6 business days
Three wallets (Canada Post) - $4.75 - arrives 4 - 6 business days
One wallet (Canada Post Registered) - $17.00 - arrives 4 - 6 business days
Six wallets (Canada Post) - $18.35 - arrives 4 - 6 business days
One wallet (UPS Overnight) - $79.90 - arrives by 4 pm next day

Ship, Ship, Let Her Rip!

Nobody should be afraid of shipping today because most freight companies have simplified their technology to the mom and pop level of understanding.

Today it is possible to sell anywhere in the world with the confidence that you can get your wallets to wherever they are desired for a very reasonable cost.

Here's hoping you stick to it!

Thank you, friend.

Barry Williams


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