Let’s settle down for a little story about Mark. Mark has researched several freight broker training options. He’s now made his decision on which school he will attend. He thinks it’s a no-brainer. The freight broker school he’s chosen is really inexpensive, they say they’ll teach him everything he needs to know, AND their price includes his freight broker license. He is absolutely sure that when he graduates from his freight broker class, he’ll be licensed as a freight broker and ready to go.
Wrong! While Mark’s story sounds so nice, he will most likely NOT get what he thinks he’s paying for. So, let me bring everyone back to reality. With almost ALL freight broker training schools, you will not walk away with your freight broker license. The freight broker licensing process is not that simple and it’s definitely not cheap.
Just to get an APPROVED or ACTIVE freight broker license registration, you must complete several forms/applications, spend at least $1,300 to as much as $10,000 or more, and wait at least 10 days to as many as 90 days. The Federal Motor Carrier Safety Administration (FMCSA) is the ONLY entity that can approve your freight broker license registration and activate your US DOT number. And, they will not do that until you meet all of their requirements. There are no exceptions.
Freight Broker License Process
Here’s a quick breakdown of the requirements and filing process for an approved freight broker license registration.
- First, you (or someone on your behalf) will complete the freight broker license registration application with the FMCSA. Upon filing the registration application, the FMCSA will charge a non-refundable $300 application fee. The FMCSA will then issue you a pending US DOT number.
- Second, you will obtain a BOC-3 form from a Process Agent and pay the process agent anywhere from $25 to $150. Your process agent will then file that newly purchased BOC-3 form against your pending US DOT number.
- Third, you will secure either a $75,000 trust fund or a $75,000 surety bond. The bonding company or financial institution that you choose will charge you as little as $1,000 or as much as $10,000 in a yearly premium or administration fee. The exact premium or admin fee amount is determined after they evaluate the personal credit and business experience of the owner(s) of the brokerage firm. Excellent personal credit and relevant positive business experience will result in a lower premium or fee. Problems with your personal credit and less than favorable business experience or no business experience will result in a higher premium or fee. Your quoted premium or admin fee is due to them before they actually write the bond or trust. Once the bonding company or financial institution has collected their quoted premium or admin fee from you, they will then post proof of your $75,000 bond or trust with the FMCSA.
- Finally, once the FMCSA receives your BOC-3 form and proof of your $75,000 bond or trust fund, they will then review and approve your license registration application and activate your US DOT number.
If you don’t complete all of these steps within 90 days of filing your license registration application, the FMCSA will deny your application.
Costs of the Freight Broker License
So, let’s add all this up. $300 to the FMCSA for the registration application, plus $25 to $150 to your process agent for the BOC-3 form, plus $1,000 to $10,000 to your bonding company or financial institution for one year of coverage on your bond or trust fund. That equals to an estimated cost of $1,325 to $10,450. And, remember, the lowest number of $1,325 would be a good estimate for someone who has absolutely excellent personal credit and relevant positive business experience.
Now, that you know about how much it will cost to secure an approved and active freight broker license, let me ask you something. Do you think it’s possible to pay a freight broker school only $1,500 (or less) and walk away from your class with your freight broker license? I’ll take it a step further and ask, do you think it’s possible to pay a freight broker school only $3,000 and walk away with your freight broker license? For only $595, or $995, or $1,500, or even $3,000, they advertise to everyone that the freight broker license is included in their tuition price for all graduates. And, they make no mentions of personal credit history or business experience.
The overall answer to my questions is, “No. Most likely, an approved and active freight broker license is not included in your freight broker class tuition”. All businesses are in business to turn a profit, even freight broker schools. Once you become a freight broker, would you broker freight for negative money? Would you broker freight just to break even? I’ll bet your answer is, “No”. Sure, there are those rare exceptions in business where we break even or lose money on one load in order to make a great and loyal customer happy. But, no one can stay in business for long when breaking even or losing money is the usual business practice.
Freight Broker License Filing Service Doesn't Equal Approved License
So, what’s the truth in Mark’s story? Why did he think he would walk away from his inexpensive freight broker class as a licensed freight broker? More than likely, the school includes the freight broker license filing service in their tuition. And, Mark assumed that meant he’d walk away fully licensed. However, the freight broker license filing service is not the license itself.
The license filing service is the service a filings specialist performs when completing that specific application on behalf of the applicant. Basically, they fill out and file the application for you. A filings specialist is familiar with the application process, they are familiar with the regulations, they know how to correctly file the applications, and they know how to dot all of the “i”s and cross all of the “t”s. Don’t get me wrong, the filing service can be very valuable, especially to those who are uncomfortable with deciphering government forms and navigating government applications. And, filings specialists don’t work for free, they do charge for their expertise and time.
When the license filing service is included in your tuition cost, it means their filing specialist will waive the filing service fee for that specific application. That filing service fee is usually priced at around $150, so again, there is a value in having it included in your tuition. But, if and when you decide to actually have the license application filed, you’ll still owe all of the other fees (FMCSA application fee, BOC-3 form, bond premium/trust fund admin fee) separate from your tuition costs. It’s a hard truth to hear. Unfortunately, this truth is usually hidden somewhere in their fine print. Or, even worse, the school implies that your license is included with their course and knowingly allows you to believe it.
Freight Movers School is always honest and upfront with our prospective students. We want you to know exactly what you’ll be getting when you attend our freight broker training. Yes, we do include one freight broker registration application filing service in our tuition cost. But, we make sure our prospective students understand there will be further fees and requirements in order for the FMCSA to actually accept, approve, and activate the freight broker license registration. And, for our graduates who aren’t ready to become a licensed freight broker, we do guarantee freight agent placement.