How to Get a Freight Broker License in Delaware

If you're interested in becoming a freight broker in Delaware, you'll need to obtain a freight broker license before you open your brokerage. This is necessary because the state of Delaware has a vested interest in making sure you run your freight brokerage business in keeping with all applicable laws and regulations. To do this, you'll have to meet certain eligibility requirements, fill out some specific forms, and pay an application fee.

Here, you can learn everything you need to know to obtain your freight broker license: the prerequisites you'll need to meet before applying and all the steps to take from the beginning to the end of the process. If you're ready, let's dive in.

Working as a Freight Broker in Delaware

While Delaware isn't among the largest states, it still sees a significant quantity of freight moving to, from, and through it each year. That means there are ample opportunities for those wishing to open a freight brokerage in the state of Delaware. If you decide to do so, you can expect to earn about $49,740 per year, according to the U.S. Bureau of Labor Statistics (BLS).

What's more, you won't need any special training to become a freight broker in Delaware. The state itself doesn't even have a specific license for freight brokers, opting instead to let federal license holders operate freely within its borders. You simply need to meet some basic educational requirements before you apply for your license. That makes opening a freight brokerage in Delaware a unique entrepreneurial opportunity with very low barriers to entry.

As a part of the license application process, you'll need to meet some insurance requirements to protect yourself and your customers from losses arising from your operation. It will cover things like damaged or lost freight, property damage, and bodily injuries to drivers and others.

You'll also need to become familiar with the Federal Motor Carrier Safety Administration (FMCSA) regulations that govern the ground shipping industry within the United States. Then, you must apply for a federal freight broker license from the FMCSA, which will make you a certified transportation broker who can legally operate in Delaware.

Steps to Get Your Freight Broker License in Delaware

To get a freight broker license in Delaware, you'll need to register with the FMCSA of the USDOT. You'll also need to work with a surety bond agency and an insurance company to obtain the necessary coverage for your business. The steps to obtain a freight broker license are outlined below.

Step 1: Choose a Business Structure, and Register Your Business

The first step in obtaining a freight broker license from the FMCSA is to decide how you'd like to structure your business and register it. Before you do this, it's a good idea to talk to a lawyer or an accountant. They'll be able to walk you through the legal and financial pros and cons associated with each type of business structure. You can also consult the Delaware state website for more information on how to open a business in Delaware. The vast majority of freight brokerage businesses are one of these business types:

• Individual / Sole Proprietor
• Partnership
• Corporation

Step 2: Obtain a Motor Carrier Number

Next, you'll need to fill out and submit an OP-1 form to the FMCSA. This is how you obtain a motor carrier number, which you'll need to legally operate your business. The form includes information about your business, such as its name, address, company type, and other relevant data. You'll also need to choose an operating authority that matches the kind of business you plan to conduct. You can choose from either "Broker of Household Goods" or "Broker of Property (except Household Goods)." You can also select both, if necessary, but be aware that there's a $300 filing fee for each operating authority type you select.

If you're in a hurry, you can register for your motor carrier number directly on the FMCSA website. If you do so, you can expect to receive your motor carrier number immediately upon completing the registration process. Otherwise, if you submit the necessary form by mail, it could take up to six weeks to get your motor carrier number. In either case, your new number will be subject to a 10-day protest period during which other companies may object to its issuance. However, you can proceed with the other steps listed here while you wait.

Step 3: Obtain a $75,000 Surety Bond or Trust Fund Agreement

The next step is to obtain a $75,000 surety bond (form BMC-84) or trust fund agreement (form BMC-85). The purpose of this is to protect motor carriers and shippers from financial harm while working with you if you don't live up to your contractual obligations. 

Step 4: Designate a Process Agent

The next step in the process is designating a process agent. This is a person you empower to accept legal service of any documents related to your business. So, if a client files a lawsuit against your brokerage, your process agent will accept the paperwork on your behalf. You must have a process agent for each state where you're planning to conduct business related to your brokerage. Once you've selected a process agent or agents, you must inform the FMCSA of your choice by submitting form BOC-3.

Step 5: Register With the Unified Carrier Registration

The final step involved in getting your freight broker license in Delaware is to register with the Unified Carrier Registration (UCR) system. This is the multistate database that all motor carriers must register with and pay fees to if they wish to conduct business across state lines. Failure to register with the UCR could lead to significant fines or even cause your trucks to be impounded when they cross state lines to do business.

Requirements for Becoming a Freight Broker in Delaware

If you want to become a freight broker in Delaware, there aren't many requirements to meet. You will need either a high school diploma or a GED to qualify for your federal freight broker license, but Delaware itself doesn't require you to meet any other preconditions. Of course, it will help you to learn a bit about the transportation industry before you try to start your business.
For that, there are several training programs you can join that will teach you what you need to know. The good news is that many of today's best freight broker/agent training programs exist online, so you can participate from anywhere. Examples include:

• Brooke Training – Here, you can get comprehensive online and in-person freight broker training. The course also includes job placement assistance upon completion, in case you wish to work for an established freight brokerage to gain experience before starting your own business.
• Freight Movers School – This Delaware-based institution offers a comprehensive course that provides you with everything you need to get started as a freight broker. From the basics to advanced marketing, you can learn it all from the comfort of your home.

What Is the Cost of Becoming a Freight Broker in Delaware?

The largest expense involved in becoming a freight broker in Delaware is the surety bond you'll need to obtain your license. The good news is that even though the bond itself must guarantee $75,000 in coverage, you will only pay a fraction of that to get the necessary bond. Your actual surety bond cost will depend on the provider you choose to work with. On top of that, you will need to pay the $300 fee associated with each type of operating authority you choose.

Costs of a Freight Broker Surety Bond in Delaware

Now that you have all the facts, you can make an informed decision about whether a career as a freight broker in Delaware is right for you.