Are you considering getting your freight brokerage license? Do you wonder whether you can own your own fleet of carrier trucks? Well, the answer is a resounding yes! In fact, many freight carriers are now taking on a brokerage license as a secondary source of revenue, and freight brokers can also act as carriers as long as they avoid transporting cargo that is double-brokered.
There are no restrictions on freight brokers owning trucks, only in how they use them. So, if you’re ready to take your business to the next level and expand your profits, read on to find out more about freight brokers and how they can own their own trucks.
What Is a Freight Broker?
Traditionally, a freight broker is the middleman who acts as a go-between for the client who owns the cargo and the carrier. With the ease of obtaining a freight brokerage license through the internet, many carriers who already possess a fleet of cargo trucks are beginning to get involved in the brokerage side of freight to generate a second stream of revenue.
While brokers with assets (trucks) may seem like a more solid bet, brokers without assets often possess a large network of carrier connections that they can use to transport cargo. Ultimately, the success of a freight broker hinges on having a wide network of trusted carriers that they can call on to get cargo transported, regardless of whether they have their own trucks.
Why Are More Carriers Getting Involved with Freight Brokerage?
Carriers that already own cargo trucks are getting more involved with freight brokerage all the time, including individual truckers who own their rigs and gain brokerage authority in order to get into direct shipping. As a result of the increased use of real-time digital technology in transport logistics, it is becoming easier and easier for newcomers to enter the game, especially if they already have experience on the carrier side of things.
For Carriers, Freight Brokerage Can Be Lucrative
For trucking companies who already own their own fleet and want to branch out into the logistics side of things, getting a freight brokerage running in-house can be a good opportunity to make money on shipments those companies can’t transport directly. However, carriers should avoid double brokerage, which is considered unethical.
Freight Brokerage Is Restricted by Financial Liability
One of the restrictions on freight brokerage is financial liability above and beyond what the broker is already responsible for if they own trucks. Since 2013, freight brokers have to be bonded for a minimum of $75,000, according to the Federal Motor Carrier Safety Administration (FMCSA).
While it is possible for a freight broker to own their own trucks or for a motor carrier to obtain brokerage authority, these two branches of transport logistics are both expensive to maintain and invest in. Unless an individual already has capital and networks established from one branch or the other, it can be difficult to become financially established on both fronts.
Owning Trucks Can Be A Great Investment for Established Freight Brokers
For freight brokers who have already established themselves in the transportation industry and have developed some financial security as a company or individual effort, purchasing trucks as company assets can be a good way to invest money back into the business. However, brokers should be aware that trucks bring their own set of costs and liabilities onto the table. Freight brokers planning on starting up a fleet of their own motor carriers should be prepared for the potential financial pitfalls of commercial vehicle ownership at the same time as they scout for new and lucrative opportunities to use their fleet.
In summary, while owning trucks can potentially be a benefit to a freight broker, it isn’t a necessity for success. Having a strong network of carriers available is key to running a successful freight brokerage business. As more carriers get involved with freight brokerage, it’s important to stay up-to-date on industry-wide updates and advancements in technology that can help streamline operations and maximize profits.
In fact, according to recent industry reports, the transportation logistics industry is expected to continue growing at a steady pace, with a projected value of $12.1 trillion by 2025. As the industry continues to evolve and grow, it’s important for freight brokers and carriers to adapt and stay ahead of the competition.
So, if you’re a freight broker looking to expand your business and increase your profits, owning trucks can be a great investment. However, it’s important to weigh the costs and liabilities associated with commercial vehicle ownership before making any decisions. With the right network of carriers and a strong understanding of the industry, you can build a successful and profitable freight brokerage business.
Ed Note: This article is part of our freight AI research program by taking an old article previously published on our site and having the AI rewrite it with updated industry knowledge. Have feedback on this? Shoot us a comment using the form on our podcast page.