By Luis Lopez, AI transportation consultant, CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast
Getting broker authority is the easy part. The first year of running a brokerage is where most of the hard lessons arrive, usually one load at a time. Many of the problems new brokers face are predictable, and most are avoidable with a bit of structure from the start.
Here are ten mistakes new freight brokers commonly make in their first year, and what to do instead. If you are still in the setup phase, start with this step-by-step guide to becoming a freight broker.
1. Weak carrier vetting
When a load needs to move today, it is tempting to book the first carrier who answers. That is how new brokers end up working with carriers that have inactive authority, lapsed insurance, or no real connection to the truck that shows up. Fraud schemes such as double brokering and identity theft target exactly this kind of rushed booking.
Build a vetting checklist and follow it every time: active operating authority, insurance verified directly with the agent or insurer, contact details that match official records, and a sensible safety history. A good carrier onboarding packet checklist helps make this routine instead of optional.
2. No written contracts
Some new brokers move freight for months on handshake deals and emailed rates. That works until something goes wrong. Without a broker-shipper agreement and a broker-carrier agreement, questions about liability, payment terms, claims and non-solicitation have no clear answer.
Put agreements in place before the first load with each customer and carrier. Have a transportation attorney review your templates so they fit your operation.
3. Ignoring cash flow and payment terms
Brokers usually pay carriers before customers pay them. If your customers pay in thirty or more days and your carriers expect payment much faster, every new load widens the gap. Growth can actually make cash problems worse.
Know your customers’ payment terms before you accept freight, check their credit, and plan how you will fund carrier payments in the meantime. This guide to freight payment terms, quick pay and net 30 explains the trade-offs.
4. Depending on one customer
Many new brokerages start with one large customer who provides most of the volume. That feels like success, but it is fragile. If that customer changes buyers, brings freight in-house or slows down, the brokerage can lose most of its revenue overnight.
Keep selling even when you are busy. Set a goal to diversify so no single customer dominates your book.
5. Underpricing to win
New brokers often cut rates to get a foot in the door. Winning freight at a thin or negative margin feels like progress, but it trains customers to expect low prices and leaves no room for the inevitable problems: a carrier falls off, detention builds up, or a reload costs more than planned.
Know your true cost per load, including your time and overhead. Price to make a sustainable margin, and be willing to walk away from freight that does not pay.
6. Sloppy rate confirmations
The rate confirmation is the document that defines the deal with the carrier. New brokers often send incomplete ones: missing pickup numbers, vague accessorial terms, no mention of tracking requirements, or wrong addresses. Every gap becomes an argument later.
Use a consistent template that covers rate, accessorials, detention terms, appointment times, reference numbers, tracking expectations and payment terms. Check every rate confirmation before you send it.
7. Not understanding contingent cargo coverage
Many new brokers assume the carrier’s cargo insurance will cover any loss. Sometimes it does not: the policy may exclude certain commodities, the carrier may have let coverage lapse, or the claim may fall outside the policy terms. Contingent cargo insurance is meant to protect the broker in some of those situations, but policies vary widely.
Talk with an insurance professional who knows freight brokerage. Read the exclusions in your own policy and understand what it does and does not cover. For background, see freight broker liability explained.
8. Chasing every lane
New brokers often quote everything that comes in: any lane, any equipment, any commodity. The result is a scattered book with no carrier depth anywhere. Every load becomes a fresh search, and service suffers.
Focus on a few lanes, regions or freight types where you can build real carrier relationships and market knowledge. Depth beats breadth in the early years.
9. No claims process
Damage, shortage and loss will happen. Brokers without a process scramble when the first claim arrives: no photos, no signed delivery receipt with exceptions noted, no clear timeline, and no idea who handles what.
Write a simple claims procedure before you need it. It should cover how to document the issue at delivery, how to notify the carrier in writing, which documents to collect, and how to keep the customer informed. Know the general framework, including the Carmack Amendment at 49 U.S.C. 14706 for carrier liability on interstate shipments and the claims rules in 49 CFR Part 370.
10. Neglecting carrier relationships
New brokers often treat carriers as interchangeable capacity. Carriers notice. If you pay slowly, communicate poorly, or only call when you need a favor, good carriers will stop answering. When the market tightens, those relationships decide whether your loads get covered.
Pay on time, share accurate load information, respect drivers’ time at pickup and delivery, and give repeat freight to carriers who perform. A short list of reliable carriers is one of the most valuable assets a young brokerage can build.
A first-year checklist
- Written agreements with every customer and carrier
- A carrier vetting process you follow on every load
- A cash flow plan that accounts for payment timing
- A rate confirmation template you trust
- Insurance you understand, including exclusions
- A written claims procedure
- A focused set of lanes and a growing list of trusted carriers
Also remember the recordkeeping basics: under 49 CFR 371.3, brokers must keep a record of each brokered transaction, and those records must be kept for three years.
None of these mistakes are unusual, and none mean a brokerage is doomed. The brokers who last are the ones who notice them early and build the habits that prevent them.
For more conversations on freight and logistics, subscribe to the Freight Guru Podcast.
About the author: Luis Lopez is a Miami-based AI transportation consultant and logistics entrepreneur, the CEO of Go Hub.io Holdings Corp and subsidiaries, and host of the Freight Guru Podcast.
