Every brokerage is going to have it’s own unique set up. Here are some of the expenses that a typical modern day freight broker should expect to incur right off the bat. These expenses are great example of why you need to hit the ground running when you start your brokerage, start ahead of the curve with our Freight Broker Training Course.
Obtaining Your General Business License: Depending on your state guidelines, $150 – $300.
Federal Tax ID Number: $0
FMCSA Form OP-1 Application: $300 non-refundable filing fee
BMC-84 Surety Bond: $1,100 – $2,250 annually. Brokers with a rate over $2,000 are usually permitted to pay monthly, quarterly, or bi-annually. Your other option is the $75,000 BMC-85 trust fund. Click here to learn how you can get a $75,000 freight broker surety bond without $75,000
Contingent Cargo Insurance: For a standard policy that covers $100,000 worth of loss or damage, expect a rate of $1,200 – $1,500 per year. These numbers are calculated with a $1,000 deductible in mind, please note that rates may change based on your deductible and other factors.
Form BOC-3: Free if you can fill it out alone but you might find that it’s worth the $20-$50 to work with someone. You can find a contact for you in your state on the FMCSA Website.
United Carrier Registration (UCR): The UCR collects $76 annually. You must file by the first of the year.
Standard Alpha Carrier Code (SCAC): $70 application fee, to stay valid your code must be renewed each year.
Total Legal Costs: $3,000 to $4,500
That of course is the total cost of getting your brokerage up and running initially and your legal expenses for the entire first year. The required legal costs and fees of a new brokerage will add up to about $2,450 to $3,900 annually. The total cost did not factor in the office expenses of a Freight Broker. Here is a list of the office essentials with some general pricing information.
2 line phone system: $50 to $200 (one time cost)
Fax Machine: $60 to $300 (one time cost)
Computer: (if you made it this far I think it’s safe to assume that you’re set)
High speed internet connection, 2 phone lines, and a fax/data line: ~$200/month depending on your local service provider.
Transportation Management Software (TMS): $150/month and up. You can pretty much spend anything ($10,000) on software for your Freight Brokerage. Start with the basic plans and move up as needed. Brokers use their software as a database, to make rate confirmations, and for invoicing.
Load Board Subscriptions: Similar to the TMS, you can spend almost anything here. However, to get started with two of the biggest load boards in the industry it will only cost about $140/month to move all of your freight.
General Office Supplies: Paper, pens, pencils, staples, Pandora/Spotify, etc. ~$50/month.
Initial Office Expenses: $650 to $1,000
Monthly Office Expenses: ~$500