How Does Freight Brokerage Work?

A freight broker is a company that arranges the transportation of a shipper's freight by an authorized motor carrier. The broker does not own the truck or employ the driver. Its job is to understand what needs to move, find a carrier with the right equipment and authority, agree on terms, and coordinate the shipment so the shipper does not have to find and manage a truck on their own.

The three parties in a brokered shipment

Shipper

The business that has freight to move — a manufacturer, distributor, contractor, dealer or retailer.

Broker

The licensed intermediary that arranges transportation for the shipper and coordinates the move.

Motor carrier

The trucking company, from a single owner-operator to a large fleet, that actually hauls the freight under its own operating authority.

How brokers are regulated

In the United States, a company that arranges interstate truck transportation for compensation must register with the Federal Motor Carrier Safety Administration (FMCSA) and hold broker operating authority. Brokers are issued a USDOT number and an MC number, which anyone can look up on FMCSA's public SAFER system. Federal rules also require brokers to maintain $75,000 in financial security, typically a surety bond or trust fund, on file with FMCSA.

A broker and a motor carrier are different kinds of authority. A broker is authorized to arrange transportation; a motor carrier is authorized to perform it. Customer First Brokerage holds broker authority — USDOT 3445411, MC-1120144 — for property other than household goods.

A brokered shipment, step by step

1. Request. The shipper shares the pickup and delivery locations, the freight, its weight and dimensions, the equipment needed and the timing.
2. Quote. The broker prices the shipment based on the lane, equipment, timing and any special requirements.
3. Carrier selection. Once the shipment is booked, the broker arranges capacity with an authorized motor carrier whose equipment fits the load.
4. Confirmation. The broker and carrier confirm the terms in a rate confirmation; pickup and delivery details are shared with everyone involved.
5. Pickup. The carrier loads the freight and the shipper signs the bill of lading, the receipt and contract for the shipment.
6. Transit and delivery. The broker stays in contact with the carrier through delivery, and the receiver signs for the freight, producing the proof of delivery.

Why shippers use a broker

• Access to a range of equipment types without managing a fleet
• One point of contact instead of searching for a truck for every load
• Help choosing the right trailer for unusual freight
• Coordination of specialized requirements, such as oversize permits and escorts, with the carrier

What to look for in a broker

Verify that the broker's authority is active on the FMCSA SAFER system, that its entity type is listed as a broker, and that its contact information matches what you have been given. Ask how the broker communicates during a shipment and who your point of contact will be.