Freight Broker Authority
A specific type of MC operating authority issued by the FMCSA that allows a person or company to arrange the transportation of freight for shippers without owning trucks.
Freight Broker Authority is a type of operating authority issued by the FMCSA that permits a person or company to act as an intermediary between shippers who need to move freight and motor carriers who transport it. A freight broker does not own trucks or physically transport goods. Instead, they arrange and coordinate the movement of freight for a fee or commission.
To obtain freight broker authority, you must apply for a broker MC number through the FMCSA's Unified Registration System, file a BOC-3 process agent designation, and obtain a $75,000 surety bond (BMC-84) or trust fund agreement (BMC-85). The surety bond protects shippers and carriers from financial loss due to broker fraud or failure to pay. You must also register for UCR annually.
Freight brokering has become an increasingly popular business model because it requires relatively low startup costs compared to operating a trucking fleet. You do not need to own trucks, hire drivers, or pay for fuel and maintenance. However, brokers must still comply with all FMCSA regulations, maintain their surety bond, keep detailed transaction records, and renew their UCR registration annually.
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Frequently Asked Questions
Do I need a surety bond to become a freight broker?
Yes. The FMCSA requires all freight brokers to maintain a $75,000 surety bond (BMC-84) or trust fund agreement (BMC-85). This bond protects shippers and carriers in case the broker fails to pay for services rendered.
Can I be a freight broker and a motor carrier at the same time?
Yes. Many companies hold both motor carrier authority and freight broker authority. This allows them to haul freight with their own trucks and also broker loads to other carriers when needed. Each authority type has its own requirements that must be maintained separately.
How much does it cost to start a freight brokerage?
The main costs include the FMCSA application fee, BOC-3 filing, surety bond premium (typically $900 to $10,000 annually depending on your credit), and UCR registration. Beyond regulatory costs, you may also need a TMS (transportation management system) and office equipment.
Related Terms
Operating Authority
The legal permission granted by the FMCSA that allows a carrier, broker, or freight forwarder to conduct for-hire transportation operations in interstate commerce.
MC Number
Motor Carrier Number
An operating authority number issued by the FMCSA that grants carriers the legal right to transport passengers or regulated commodities for compensation across state lines.
BOC-3
Blanket of Coverage - Form 3
A federal form that designates process agents in every state to accept legal documents on behalf of a motor carrier, broker, or freight forwarder operating in interstate commerce.
UCR
Unified Carrier Registration
An annual federal registration and fee system required for motor carriers, brokers, freight forwarders, and leasing companies operating in interstate or international commerce.