Insider Secrets to Successful Freight Brokering

Freight Brokers: Do You Need Software?

Many people who call or email with questions think they need to purchase freight broker software. After all, technology can provide a real pop to business transactions. But, here's the truth. Software is not needed, starting out. Yes, I do recommend using some type of general ledger software to record income and expenses and to send invoices and prepare checks. QuickBooks is the winner here. Other than that software, we provide spreadsheets that are ready to go for recording, monitoring and analyzing load activity.

Here is a sample of transactions that you will be doing:

• Searching the Internet for customers or carriers,
• Making a lot of phone calls,
• Sending faxes, usually all you need to change each time is the cover sheet,
• Receiving faxes,
• Setting up carriers as vendors and shippers as customers in QB,
• Recording load activity into QB,
• Printing out financial statements, usually on a monthly basis,
• Entering load information into spreadsheets,
• Etc., etc., etc.

Your first line of duty is to get customers and the best software in the world won't help on this; it will help MANAGE your customers and loads once you build a good base of activity. But it won't help in your search for customers.

Keep this in mind and don't spend a lot of money on freight broker software until the business demands it.

Freight brokering has several dimensions

I sometimes think that if a person can poke their phone dial with a finger or punch one time for a speed dial that they can broker freight. Well, yes, you'll be making a lot of phone calls however way you choose.

But freight broker has other dimensions. You may be good on the phone - and this IS a people business usually over the phone and Internet. But here are some other facets of the business that you need to master:

• Collecting information from shippers and carriers other than just taking the order and dispatching the truck,
• Recording all your load activity - shippers, carriers and lanes,
• Analyzing all your load activity so you can separate the winners from the losers,
• Managing your cash flow while growing the business,
• Having several strategies to continuously find customers and carriers,
• Taking care of the invoicing and making payments on time,
• Creating the necessary forms that will help you run and monitor your business,
• Using good people skills with those that work well with you,
• Recording your financial activity and analyzing the same,
• Using technology the right way,
• And the list goes on and on and on and on .....

Don't get locked in with the idea that freight brokering is simple. The concept is simple, the reality is not.

Build your own database of shippers and truckers .....

Recently I have completed two database templates for clients: one for collecting shipper info and the other for carriers. You must first purchase the MyDatabase software ($39) in order to use these templates.

Then you will build your OWN databases

These database templates will save you 3-6 hours of set-up depending upon your programming abilities.

Take a look at a sample shipper database here:
http://www.atexfreightbrokertraining.com/SAMPLESHIPPERDATABASE.doc

Then call or email me to get started in your freight broker venture.

(Note: this link above should now be working properly.)

Here's how a transaction might go .....

DAT Solutions, offering one of the best load boards out there, has an interesting article here:

http://www.dat.com/blog/post/Headhaul-Rates-Coming-and-Going?utm_campaign=cnews&utm_medium=email&utm_source=mkto&mkt_tok=3RkMMJWWfF9wsRokvqTIZKXonjHpfsX64u8vXa%2Bg38431UFwdcjKPmjr1YABRMZ0aPyQAgobGp5I5FEOQ7jYRax2t6YMUw%3D%3D

Freight Brokers Doing First Things First

As new freight brokers are calling on potential customers, they may run across a shipper who needs a truck right away. Great! But make sure you take this process step-by-step. Otherwise, you may end up searching for a truck even before you get set up with the shipper.

The shipper may be talking about the load he has and even tell you what he is paying; that's good but before you even think about looking for a truck, you will tell the shipper that you will need to get set up with them. They should know what you mean; if not, tell them you have a package of information, including your broker authority, etc. But you don't need a broker-shipper contract, necessarily.

Then you will ask the shipper how quickly they normally pay freight brokers. He should be able to tell you and it had better be at least within 30 days.

Lastly, you get the shipper's full name and their address and then run a credit check. This is mandatory unless you want to be working in the dark as far as your cash flow is concerned.

So, yes, it's good to find a shipper who is anxious to work with you; but you have to do first-things-first and get started on the right foot.

In short, don't jump out there searching for a truck before you haven't been properly set up with the shipper including a credit report.

Limited Liability Companies and Sole Owners

Many individuals select the LLC as their choice for operating their freight brokerage. LLCs have more flexibility for the most part.

When it comes to one individual who will be the sole owner of the LLC (called a singel-member LLC), he or she has a choice as to how they want to operate the LLC. It can either be treated as a corporation; or it can be treated as a sole proprietor.

If it is treated as a corporation, the owner of the LLC will need to file a year end tax return on Form 1120 in most cases. If it is treated as a sole proprietor, the year end tax return is filed on Schedule C, Form 1040.

Now what about the tax ID number? If the LLC does not have employees and chooses to report on Schedule C, there is no need to obtain an EIN number for the LLC. The LLC owner will use his or her personal name and ID number for the federal tax return.

There may be exceptions to these observations. However, in our training we try to point you in the right direction to get the correct help. And, usually, there are places to get help without spending a lot of money.

One more item, if the single-member LLC owner takes money out of the business, there is no need to withhold employment taxes. Estimated taxes may need to be made depending upon the company's net profit.

If you still have questions on any of this, however, a tax attorney or corporate accountant can keep you on the right path.

To learn more about our freight broker training, go to: www.atexfreightbrokertraining.com

Obamacare: How Will it Affect Your Brokerage?

Don't feel like a dunce if you are uncertain about what you should know about Obamacare. You are not alone. Billions of dollars are being spent by companies to create the "exchanges" wherein health care consumers can choose their desired services.

The explosion of new rules and options will require the creation of insurance brokers who can navigate this maze and to assist consumers in making the best choices.

The state you live in will impact your options and choices. Some states are taking action by providing various options on these exchanges. Other states will leave it up the the Federal government to deal with individuals and will leave employer-sponsored plans alone.

For the smaller and mid-sized brokerage firms, you need not worry about penalties for not providing an employer health plan if you have fewer than 50 employees. Most of the smaller to mid-sized brokerages use agents which are independent contractors and not employees.

The bottom line: most brokerages won't be be affected by Obamacare because thay will have fewer than 50 employees.

However, if you have fewer than 25 full-time employess with an average salary less than $50K, companies are eligible for tax credits for providing insurance.

Enrollment into Obamacare is supposed to start in October, 2013 but some experts are saying that could be pushed back due to all the necessary infrastructure that needs to be in place.

What Do These Have In Common?

A reefer, a vented van and a flatbed with sides. Okay, yes, they all have wheels - maybe they are all 18 wheelers.

In addition, they all can pull produce. The reefer will usually run at 38 degrees for most produce; the vented van will move any other produce that does not require refrigeration; and the flatbed with sides will haul other types of produce.

You will even see some dump trucks hauling pumpkins. Go here to see what I'm talking about: http://atexfreightbrokertraining.com/videos.html

Scroll down till you see the video on Unloading Pumpkins. This video was taken in Morton, IL where you'll see tons of trucks making their way to the Libby plant from the fields within a 25 mile radius or so.

Here is the point: you really don't need to know a lot about trucking or all the variations of trucks to be a successful freight broker. Your customer will tell you exactly what they need to move their cargo.

Enjoy the video.

Freight Broker Success: What to Watch Out For

When I get phone calls and emails asking about the freight broker industry, I try to be as realistic as possible. This approach is far more helpful than trying to hype up the money potential.

Sure you can make good money. Sometimes it gets to be as easy as falling off of a log.

But, therein lies the danger - the hidden snare that has taken many brokers down to their knees. When some brokers get so successful, when things are moving along without too many hitches - WATCH OUT.

Many brokers start jacking up their rates and trying to pay the truck less and less. At the same time, they start getting sloppy on their service. They don't dot their i's or cross their t's. They forget to thank their customers and start treating truckers like a commodity.

Folks this is sad. But this is the way it is for some brokers. This is bad for them; BUT it's good for you if you are new. Many shippers have their eye out for a new broker because of lax attitudes and ways for doing business. This is how some new, small brokers get their chance to get their foot in the door.

Are you ready to make a move? This isn't exactly and dog-eat-dog business. But be ready to pounce at opportunity when it hits you in the face.

Freight Brokers and Trucking

Freight brokers and truckers go hand-in-hand like peas in a pod. Right? Wrong? Actually, both. Here's why. Many truckers deal with freight brokers every day for all their loads. Further, many truckers are becoming their OWN broker to cut out the middle man and put that money in their pocket.

It is a mistake, however, to think that just because you are in trucking that you know how to broker freight. There is a connection between brokering and trucking. Yet, there is a big difference as well.

Truckers move cargo AFTER someone else usually finds the cargo. Freight brokers, however, FIND the cargo and then FIND AND COORDINATE with the truck to move the cargo. This is a huge difference. The trucker focuses on moving the cargo - the broker focuses on coordinating the move between the shipper and the truck.

I often see other freight broker training schools focus much of their promotional material on TRUCKS and trucking. However, this is only half the story. They lose the focus on COORDINATING the move between two separate entities.

If you were to go to my website to learn about freight brokering, you would find little emphasis on TRUCKING and a whole ton of focus on BROKERS WHO ARE COORDINATING the move.

Check it out at http://www.atexfreightbrokertraining.com

The more you understand the concept or the big picture, the better you are at learning the details.