Top 5 Things You Need to Know About Surety Bonds

Beginner Guide to Bidding & Winning Public Jobs E-Book

Top 5 Things You Need to Know About Surety Bonds

Beginner Guide to Bidding & Winning Public Jobs E-Book

General Business License or Permit Bond (not listed otherwise)

BMC-84 Freight Broker Bond (FMCSA compliance)

Utility Bonds (required for utility payments)

Pre-Qualify for Contractors (determine my max limits)

Performance & Payment Bond (for an awarded contract)

Stand Alone Maintenance Bond (for a warranty)

How to Obtain a Freight Broker License: Your Ultimate Guide

The freight broker industry is an expanding field that offers huge potential rewards; it also is a competitive one, requiring thorough industry knowledge and the navigation through a sea of legal requirements.

We recommend that youdownload our free freight broker starter kit e-book, which explains everything youll need to know in one place including startup costs, how to obtain your freight broker license, and more.

There are several steps you should follow when it comes tostarting your own brokerage, such as creating a business plan, and getting the proper training; once you complete these preliminaries, its time to make it all legal. Take a look at an overview of our license guide below, which outlines the the steps you must take:

The trucking authority functions as your freight broker license, and fulfilling all the other legal requirements can be a long and grueling process. Thats why we created this guide to help outline what you must to step-by-step, and explain the costs associated with them.

What is an MC number? It stands for motor carrier number and its a necessary component of making your brokerage legal. Obtaining your broker authority will take several weeks from start to finish. So, make sure you get started as soon as you can.

To begin the process of obtaining your MC Authority online, you must firstobtain a PIN from the FMCSA. Applying for a PIN requires a valid credit card, though no charges will be made. The PIN will be securely shipped to your businesss address in 4-7 business days.

Also known as an authority, your license is a key item youll need in order to become registered as a freight broker with the FMCSA. Once you have your PIN, youre finally ready to submit anonline OP-1 applicationfor your MC Authority. Begin by selecting the first option, New or Additional Registration and continue from there filling out all the relevant information. The filing fee is $300 and is not refunded if youve made a mistake and need to refile. Therefore, be sure all of the information is correct before submitting!

If you want multiple licenses (say, to be a broker and a carrier), then youll have to file for them separately and pay $300 for each one. The processing time for your ICC authority is 4-6 weeks, but you can check your applications status online anytime. If you are a carrier and work in interstate commerce, you will need a DOT number to operate and need to apply for it separately with an MCS-150 form.

Bear in mind that once youve obtained your DOT registration, you must file a biennial update by submitting an MCS-150 form online. Fortunately, this process is free.

Youre required to provide this update even if your company has not changed its information, has ceased interstate operations, or is no longer in business.

Liability insurance is legally required by the FMCSA for all freight forwarders and carriers, but not for anyone operating only as a freight broker. Once you obtain your insurance, youll have to submit proof to the FMCSA.

For each state in which your brokerage will be operating, you must obtain a processing agent. If youre only a broker, operating refers to having an office or making contracts. If youre also a motor carrier, then operating means your freight passes through that state.

The role of the processing agent is to be the person who can be served papers if a claim is filed against your brokerage in that state. There are many commercial firms who will provide processing agents for a fee. The FMCSA has auseful list of such firms. You can also get someone to work directly for you, since freight agent training is easily available.

Once youve obtained the necessary processing agents, either you or the firm you may be working with need tosubmit a BOC-3(Designation of Processing Agents) form both to the FMCSA and to each state in which youll be operating. Having submitted this form, the FMCSA recommends you keep a copy in your own files.

If youd like to avoid the extra paperwork, our company canhandle your BOC-3 filing for you.

As part of the MAP-21 law, all freight brokers are required to obtain a bond or trust in the amount of $75,000 in order to obtain their license. The BMC-84 and BMC-85 are quite different from one another, so how do you decide which one is best for you?

BMC-84 premiums can range from $750 – $9,000 per year (this will vary based on your financial strength, e.g. personal credit). The BMC-84 bond usually requires zero collateral. If youre interested in a BMC-84 bond quote, you canapply online now.

BMC-85s generally cost around $1,500 per year. In addition to the yearly premium, the BMC-85 trust will require you to post $75,000 of collateral with a bank, which is something many smaller or aspiring brokers simply cant reasonably do.

If youd like to learn more about the differences between BMC-84s and BMC-85s, you can read our article that has beendedicated to the topic of BMC-84 vs. BMC-85.

Once you decide to get either the BMC-84 or BMC-85, the final step in the legal process is obtaining your Unified Carrier Registration (UCR). For freight brokers, its relatively simple and inexpensive at only $76. If youre also a motor carrier, then your registration cost will vary depending on the size of your fleet. In either case youll need to re-register and pay the fee annually.

Fortunately, the system for registering has been updated relatively recently. The UCR system registers and collects fees from the operators of vehicles engaged in interstate travel. Registering through this system can be done online at theUCR application website. They even have a mobile application.

However, its important to note that this system currently operates in most states except the following: Oregon, Wyoming, Nevada, Arizona, Florida, Maryland, New Jersey, and Vermont. If you operate in one of the latter, youll have to complete a separate process to register there.

Now that you know all the necessary steps you must take to get your freight broker license, we recommend you take a look at our other freight broker guides which cover some of the most important information youll need to know regarding training, and how to leverage load boards to grow your brokerage. Take a look at the topics covered in our e-book guides below:

The importance of training for freight brokers

The benefits of load boards for your freight business

How to find the right load boards for your brokerage

These e-book guides were created specifically with freight brokers in mind, and provide all of the crucial information you need to help ensure your brokerage thrives in this competitive profession.

Have more questions? Call one of our surety bond experts at

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