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How to Make Money as a Freight Broker – Part 2 of 2
In Part 1 we talked about a strategy of coming up with some unique keywords and going to Google or Yahoo to find shippers and loads.
Here in Part 2 we’ll look at another strategy to uncover shippers who may have loads for you AND we will discuss getting trucks when you need them and where you need them.
Here is another keyword search I just did: passivating manufacturers. What the heck does “passivating” mean. Well, you don’t have to know before calling “passivating” companies. You just want to know if they use freight brokers. Most brokers would pass on pursuing this keyword because they are not familiar with it.
By the way, when you come across a unique word, you may find out that the company results you get after an online search reveals “service” companies. They are not manufacturers. So what do you do? You do some digging and try to find out WHO manufacturers the tools they are using.
So from Part 1 and Part 2 here, this is one strategy – using unique keywords with Google or Yahoo.
Now, finding loads is one side of the coin. The other side is finding trucks. They must be found and prequalified. You don’t make money as a freight broker if you can’t find qualified trucks.
There are two potential problems here: the first problem is trying to find carriers in an industry with fewer trucks than loads; and, the other problem is taking care to conduct due diligence on carriers to keep you from making a “negative” carrier selection.
The best way to attract trucks is to post good-paying loads. Other than that, you want to build your own database of carriers whichever way you can. In our training, we point you to a cheap but good database where you will enter carriers that you get set-up with.
In the past, I’ve gone to various search engines like YellowPages.com where you can enter the word “trucking” and select the city and state where you need a truck. At some point, you may disregard using the load boards and rely on your own database.
You NEVER want to pass on an opportunity to get set-up with carriers. Once set-up, keep in contact so as to start building a relationship.
So, finding trucks in a scarce market is your first potential problem when starting your brokerage.
The second potential problem is learning how to prequalify carriers to avoid a negative carrier selection. There is a lot of confusion here and we can’t go into detail (but the audio CD below goes into more detail).
When you have a truck that wants your load, you will get their DOT# and go to the FMCSA website to make sure they have their authority. They have to be active; they have to have their proper amount of insurance and they have to have their BOC-3. This process is very easy and simple.
Here’s where it gets complicated. The FMCSA’s Safety Measurement System (SMS) reveals a series of scores in several categories of carrier behavior. These scores may be misleading because the SMS methodology has been found to be flawed. The FMCSA will not admit to this.
Yet, if your carrier has a problem with a delivery, attorneys may get involved and you could become liable for damages or missing pieces or more if you don’t properly check out a carrier’s status in several categories.
Brokers are NOT required to do a full audit on a carrier before selecting them but attorneys could find you negligent one way or another.
And, bingo, just like that you may be out of business.
In summary, you have to do several things very well in order to make money as a freight broker.
You need to at least:
- Use several strategies to find shippers that use freight brokers,
- Negotiate a good rate and margin for most, if not all, loads.
- Find carriers that are ready, able, willing and qualified to move your loads,
- Take “reasonable care” in your carrier selection, and
- Repeat this process over and over again.
Lastly, to get much more detail than this email post, go and grab my recent audio CD, titled “A Simplified Guide to Becoming a Freight Broker”.
There’s a lot of info on setting up the brokerage and getting your authority, getting your trust fund or surety bond, putting together your set-up packages for shippers and carriers, avoiding “negative carrier selection”, plus much more.
Go here to grab the audio CD: >>> A Simplified Guide to Becoming a Freight Broker <<<