Can You Be A Freight Broker And Owner-Operator?

April 8, 2025

Can You Be A Freight Broker And Owner-Operator?

The short answer is yes. A company can legally obtain both of these authorities, allowing it to operate as a carrier (transporting goods themselves) and a broker (arranging transportation for others).

If you have a trucking company and are thinking of starting a freight brokerage (or vice versa), this is the guide for you.

We discuss the legal steps, pros and cons, costs, and tips for succeeding in these dual enterprises.

Can You Legally Be Both a Freight Broker and an Owner-Operator?

You can legally operate as a transport carrier and a broker – subject to conditions and meeting regulatory and licensing requirements. Here’s what you need to do to get going legally:

Owner-operator:

Commercial Driver’s License (CDL): To operate commercial vehicles, you need a CDL with the appropriate endorsements for the type of cargo you plan to transport.
USDOT number: Register for a USDOT number through the Federal Motor Carrier Safety Administration (FMCSA). This number is used to track your safety record and compliance with regulations.
Motor Carrier Authority (MC) Number: If you plan to operate under your own authority, you need an MC number. This allows you to transport freight across state lines and act as a carrier.
Vehicle registration and insurance: Proper registration and commercial truck insurance are essential. Insurance includes liability insurance, cargo insurance, and other coverage specific to your operations.
Designate process agents (BOC-3): You must designate a process agent in each state where you operate. A process agent is a representative appointed to receive legal documents on your behalf (in the case of lawsuits or other legal issues). File a BOC-3 (Designation of Process Agents) through the FMCSA portal to appoint an agent. You can simplify this step by using a nationwide process agent service rather than appointing separate agents for each state.

Freight broker:

MC Number: Obtain your FMCSA broker authority (MC number). This serves as your freight broker license, allowing you to operate legally. It costs $300 and you apply through the FMCSA.
Surety Bond: Secure a $75,000 surety bond (BMC-84) to protect shippers and carriers. This can cost from 1% to over 10% of $75,000, depending on your credit.
Designate Process Agents: File BOC-3s or use a nationwide service.
Insurance: Liability or Errors and Omissions insurance is recommended. This covers claims if you cause loss to other parties. Contingent cargo insurance is mandatory if you operate as a freight carrier and broker.

Registering Your Businesses – Keep Them Separate

It’s advisable to create two separate and distinct entities. This avoids legal, financial, compliance, and insurance complications.

Typically, the legal structure is one of the following:

Sole proprietorship: A sole proprietorship is simple and inexpensive but doesn’t protect you personally from business liabilities.
Partnership: The partners share liabilities, profits, and ownership per a partnership agreement.
Limited Liability Company (LLC): An LLC offers liability protection and some tax flexibility.
Corporation (Inc.): A corporation is more complex but provides strong liability protection and potential tax advantages.

Pros and Cons of Being Both a Broker and a Carrier

Let’s run through the pros and cons of running these two related, but different, businesses.

✅ Pros:

Diversification and increased profit:
- If you manage both operations efficiently, you achieve an additional revenue stream.
- You can eliminate third-party broker fees on some loads and increase profit margins.
- By expanding your network, you can secure more business.
- Providing both services allows you to be a one-stop shop for customers and broker loads with good profit margins.
Operational efficiencies: Greater control over the logistics chain enables you to reduce downtime for your trucks and optimize other efficiencies like load consolidation, communications, and route planning.

❌ Cons:

Time management challenges: Broking and transport are both demanding businesses that require substantial time, focus, and resources to manage effectively. You won’t be a reliable broker if you are away on the road, driving. This means you must hire a driver(s). Alternatively, you could hire a freight agent to handle the brokering function under your authority. You pay them a commission (around 50%) of the gross profit of each load they negotiate. This arrangement could free you to drive if you need to, but it can also make you over-reliant on the agent for success on the brokering side.
Double brokering concerns: Double brokering is the illegal act of a broker or carrier consigning a load to another trucking company without informing the shipper. It is a major concern in the industry. To limit being exposed to double broking, some shippers won’t deal with a small trucking company that also acts as a broker.
Higher upfront costs and regulatory burden: Running dual operations involves more costs and regulatory compliance. While the businesses should be legally separated, you can save some money by sharing resources (like the same office, equipment, and hardware).

What are the Costs of Setting Up as a Freight Broker and Carrier?

You will need $16,000 – $28,000+ to set up both companies. Here are approximate breakdowns:

Carrier start-up:

Vehicle(s) and insurance: Your vehicle costs depend on the number, size, and type of trucks required. Your financing arrangements and insurance options also have a direct effect on expenditure.
Licensing, incorporation, and legal: $2,500
Software and tech: $2,000
Website and marketing: $1,500 – $3,000

Freight brokerage start-up costs

Securing the $75,000 freight broker bond: $1,000 – $5,000
Marketing and events: $2,000 – $3,000
Software/ Technology: $2,500
Licensing and incorporation: $1,000
Insurance and legal: $2,500
Training: $1,000

Tips for Success in Your Brokerage and Carrier Businesses

Here are five tips for success in your dual roles.

Smart software: Invest in a Transport Management System (TMS) that offers functionalities and features supporting both brokerage and transport. Explore software solutions that can boost efficiencies in critical areas like:
- Marketing automation
- Customer relationship management (CRM)
- Accounting and record keeping
Build relationships: The value of creating a strong network of relationships can’t be overstated.
- Connect with other truckers to forge partnerships for backhaul loads, overflow freight, and specialized shipments.
- Connect with shippers to secure consistent freight for your trucking business and offer dependable carrier options through your brokerage.
Back-office and operational support: What support do you need so that you can focus on core business and high-value activities? Consider the following:
- An assistant (or virtual assistant) to help with paperwork, marketing, phone calls, and other admin.
- A networked freight broker agent to expand your brokerage’s reach and increase load volume.
- Reliable driver(s) to handle shipments without hassles.
Load boards: Use reputable load boards like DAT or Truckstop to find high-quality freight, fill empty miles, and keep your trucks on the move. Focus your search by setting up filters for preferred routes, good rates, and favorable load types.
Engage a Compliance Consultant: Consider hiring a Compliance Consultant or Agency. They provide expert guidance to ensure all FMCSA regulations, insurance requirements, and other legal obligations are buttoned down. They will also help implement systems to manage compliance moving forward.

FAQs

1. What is the average salary for a freight broker in the US?

Indeed job stats show the average pay for salaried freight brokers in the US is around $62,000 plus $28,000 in commission. Commission-only freight agents earn from $40,000 at the lower end to $100,000 or even $150,000 for top performers. Independent freight brokerages earn anywhere from $40,000 to over $250,000.

2. What type of freight pays the most for owner-operators?

Loads like refrigerated cargo, hazardous materials, and oversized freight typically pay more because they require special skills, equipment, and permits.

3. Do I need a separate office for my freight brokerage?

Not necessarily. You can run both operations from the same physical location if allowed in your state. What’s more important is that the operations are clearly separated on paper and that business transactions between the two are transparent.

4. What skills are essential for being a successful freight broker and owner-operator?

Strong negotiation, communication, organizational, and networking skills are crucial. Knowledge of the trucking industry and building trust with other trucking companies are also key.

5. What is the difference between a freight broker and a carrier?

A freight broker connects shippers with carriers, arranging transportation without moving the goods physically. A carrier (like an owner operator) transports the freight using their own trucks.

Summary and Invitation

Being both a freight broker and an owner-operator in the USA is not only possible but can be rewarding. With careful planning, hard work, and diligent networking, you can build two successful and valued businesses.

If you are an entrepreneur or transporter planning to diversify into freight brokering, the 90-Day Freight Broker course is your ideal starting point. It offers the most complete training in the industry, with lessons in audio, video, and text. Within three months, you will be equipped to launch and grow a successful freight brokerage. Contact us today if you are ready to make your move.

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