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How to Start a Freight Brokerage Business

Do you possess the spirit of a hustler? Do you have intention of starting a freight brokerage business but you don’t know how to go about it? Do you need a sample freight brokerage business plan or feasibility study? Then read on as I provide you a detailed guide on how to start a freight brokerage business.

If you have the logistic and business management skills, as well as an entrepreneurial spirit, you may just be fit to learn how to start a freight brokerage business.

As a freight brokerage company, it is your duty to act as a mediator between shippers and client companies who need their services and facilities. Their tasks also involve clearing your goods from the ports, paying up your duties and taxes, transporting your consignment to your desired destination, etc. Sometimes, freight brokers are referred to as clearing and forwarding agents.

Now from a preliminary look at this industry, I can boldly attest to the fact that there’s much money to be made as a clearing and forwarding agent. The sweetest part is that this business can be done anywhere, in any country; as long as international trade still exists and your country is a partaker, you are in business.

So whether you are in China, Nigeria, Ghana, Brazil, Canada, U.K, India, etc; you can do this business and earn lucrative income based on commissions for every successful deal and transaction. If you are still interested in learning how to start a freight forwarding business, then keep reading.

How to Start a Freight Brokerage Business and Make Money

  • Make the decision

Yes, no one wakes up and jump into an industry without due diligence and some personal assessment. The freight brokerage industry is a tough one, so you need to really decide if this business is for you.

Can you handle deadlines and pressure from clients? Are you prepared to bargain hard with clients, companies, trucking or haulage companies and custom agents alike? Are you prepared to learn what it takes to be in the freight forwarding business? These are a few questions you must answer.

  • Gain the necessary experience

Knowledge and skills in both logistics and business management are essential when considering starting a freight brokerage business because there are a lot of protocols to be observed before a transaction can be completed. You have to deal with clients, custom agents, shipping companies, competition, etc.

Moreover, you also need to expose yourself to learn how the freight brokerage business works. You can do so by researching or gaining experience from a reputable company first. This way, you get to learn the ropes as well as the ins and outs in the industry, which will absolutely come in handy when putting your own company.

Another important step to starting a freight brokerage business is determining the specific niche you want to cater for. This determines your area of expertise. There are many niches in the freight forwarding business and I bet that you can’t serve them all.

You may want to focus on the agricultural industry or cater to the chemical industry. You may want to target immediate or accessible areas or some other locations. I even know some clearing and forwarding agents that just focus on clearing cars from the ports, you can do the same.

To get everything organized, it is also advisable that you come up with a detailed business plan. This way, all items involved on how to start a freight brokerage business from the funding to investing in facilities and equipment, from the operations to management until the marketing strategy will all be defined well. Most businesses operate without a blueprint, you can gain an advantage by operating strategically with a plan.

Depending on the particular niche you want to cover, your funding needs may vary. In any case, you need to be able to consider all your viable options to get the necessary funding. It is important that you have at least enough money to cover your expenses for the first three months of operations. You also need to understand that you may need to pay the shippers yourself first as client companies are often late in settling their invoices.

  • Get the necessary license

To start a freight brokerage business, you need to obtain your business clearing license from the customs. One thing I have observed in this business is that most clearing and forwarding agents are not licensed. What they do is to source for clients, get the deal, take their cut and hand the deal over to the authorized freight forwarding agents.

You can choose to do this if you are starting with a small capital or better still, you can go for your license. After obtaining your license, you need to choose your business location and setting up your business office with all the necessary equipment. Will you situate your office close to the sea ports or otherwise? You alone can decide that.

  • Get a Lawyer or Attorney

You also need to hire a dependable lawyer to handle drafting the business contracts. He can also help you with the rest of the legal matters that you need to be on top in this business.

Another aspect of the freight brokerage business which is particularly of great importance is building your network list of shippers and possible client companies that may require your services as a freight brokerage company. You really need this to succeed in this business.

To get money rolling into your business, you need clients. This is where the need for marketing comes in. You can spend a little money on advertising or better still, network with other non-licensed freight brokers. As your company progresses, you may want to consider hiring more people to help you handle the demands of your booming freight brokerage business.

As a final note, I want to state that the freight brokerage business is very profitable but it is filled with twists and turns. Getting to the top depends on thorough understanding of the industry and your ability to handle the challenges of the business.


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