Becoming a Freight Broker in Pennsylvania
Freight broker is a versatile role that requires a range of different skills. While their primary job is communication, they also need to understand how international and global shipping industries work and how to use basic business tactics like marketing and negotiation.
Information about freight broker duties, license requirements, and salaries can help you decide whether this career is right for you.
Education & Training
Education and Freight Broker Training in Pennsylvania
Wondering how to become a freight broker in PA? Getting the proper training and education is the first step to qualifying for this competitive career. Although the state of Pennsylvania does not require a certificate or degree for this job, taking classes can give you a more thorough understanding of the industry and teach you some of the skills and practices you’ll need in this profession.
Several schools offer supply chain management programs and freight broker training in Pennsylvania, including:
- Community College of Philadelphia
- Penn State’s Smeal College of Business
- Temple University
Freight Broker/Agent Training Courses
Each freight broker/agent course is different. However, most classes teach you about transportation law, meeting proper insurance requirements, and drafting contracts and agreements. You’ll also learn freight brokering basics like how to use spreadsheets, software, and documents that are common in the industry and essential business techniques like:
- Determining quotes
- Negotiation and marketing techniques
Some non-credit freight broker programs can take about six months to complete. However, if you pursue a supply chain management degree, you’ll be in school for at least four years. Though it will take longer, completing a degree program can provide greater understanding and expertise in the freight industry, making you an attractive candidate for potential employers and clients.
Requirements for a Freight Broker License in PA
While there is no state-specific freight broker license in PA, all brokers must have a federal license through the Federal Motor Carrier Safety Administration (FMCSA). After you complete your chosen training program, take the following steps to get the proper licensure for a freight broker job:
- Complete a Unified Registration System application to receive a U.S. Department of Transportation number.
- Purchase a Trust Fund Agreement (BMC-85) for $75,000.00 or a Surety Bond (BMC-84) to protect yourself from any claims that a shipper or carrier may bring against you for alleged unfair business practices.
- Designate a process agent for each state you plan to operate in by filling out a BOC-3 form.
- Pay the $300 non-refundable application fee for your FMCSA license.
License application processing usually takes about 4 to 6 weeks. Freight brokers looking to start their own businesses may need to take a few extra steps. For example, some might become Certified Transportation Brokers (CTB) through the Transportation Intermediaries Association (TIA) and establish a limited liability company or other legal entity for their businesses.
What Do They Do?
A freight broker is the go-between for shipping and carrier companies. Along with negotiating prices and transactions for shipping various goods and materials, they arrange product pickup, plan the shipping route, track the shipment during transport, and maintain communication between the shipper and carrier to ensure safe, on-time delivery.
Knowing about various steamship lines, airlines, and truck lines is essential to doing this job. You also need exceptional communication, customer service, and accounting skills so you can build connections with different companies in the freight industry, find ways to cut shipping costs, and optimize your employer’s supply chain.
Freight Broker vs. Dispatcher
Both freight brokers and dispatchers negotiate the best rates and track shipments to ensure the delivery goes smoothly. However, a dispatcher works for the carrier, while freight brokers are intermediaries between the carrier and the shipper. Brokers also receive a small fee or commission for their services, while dispatchers get paid a percentage of the motor carrier’s pay.
Earnings for Freight Brokers
Shipping companies usually pay brokers a regular wage, plus some form of commission for each carrier they find to deliver their products. You can charge whatever you want for your services if you run your own freight broker business. However, you’ll need to make sure that your rates are affordable and competitive so you and the shippers and carriers you work with can still make a profit.
Freight broker earnings vary by location as well. While the average salary for a freight broker in PA is about $50,640.00 per year, you could earn between $30,020.00 and $69,450.00, depending on which part of the state you live in. Below, you’ll find the salary information for freight brokers in five different Pennsylvania cities.
According to the U.S. Bureau of Labor Statistics, you can expect to see the national demand for cargo and freight agents grow by about 10% by 2030. Experts also predict a 7% increase in freight broker jobs in Pennsylvania. You can take advantage of these career growth trends by applying to work at shipping companies with available positions or starting your own freight broker business.