Starting a Freight Brokerage: Legal Fees and Office Expenses to expect

LogisticsAcademy.org

LogisticsAcademy.org

Logistics Academy is an online Freight Broker Training School. Many people want to know if cost is a barrier to entry for them. A Freight Brokerage is a very inexpensive business to start and it is a great opportunity for those interested in working from home.

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The Initial Legal Costs

Every brokerage is going to have its 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 a 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.

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-3Free 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.

Unified 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 - $4,500

• General Business License: $150 - $300• Federal Tax ID Number: $0• FMCSA Form OP-1: $300• BMC-84 Surety Bond: $1,100 - $2,250 annually• Contingent Cargo Insurance: $1,200 - $1,500 annually• Form BOC-3: $20 - $50• UCR: $76 annually• SCAC: $70 application fee

Office Set Up Costs

The previous “total costs” 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.

Freight Broker Office Setup

• 2 line Phone System: $50 - $200• Fax Machine: $60 - $300• Computer: if you're here… you're probably set!• High Speed Internet (& phone line provider): ~$200/month• TMS (software): +$150/month• Load Board Subscriptions: $140/month• General Office Supplies: ~$50/month

Total Costs

• Initial Legal Fees: $3,000 - $4,500

• Initial Office Expenses: $650 - $1,000

• Monthly Office Expenses: ~$500

• Annual Legal Costs: ~$2,400 - $3,900