A freight broker, also called a broker authority or freight broker agent, is a domestic transportation expert who is knowledgeable about the logistics of cargo shipment of manufactured and distributed products. A freight broker company arranges for transportation of trade cargo by contracting with for-hire transportation motor carriers. They generally do not take possession of the cargo, nor assume responsibility for the cargo arranged with motor carriers. They deal with much of the technical shipping documentation, including terms and fees. In the United States, a freight broker license is required for operating freight broker business.
(1) Obtain the required freight broker training and knowledge. While a degree program is not required, freight broker training programs exist to educate prospective freight brokers about the relevant transportation logistical knowledge, using an assortment of training manuals and books. You can also apprentice with a licensed freight broker.
(2) Apply for the license. The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (FMCSA) is the government agency that issues freight broker licenses. Complete the FMCSA’s Form OP-1 Application for Motor Property Carrier and Broker Authority and pay a fee of $300. The FMCSA will then assign a Motor Carrier Number you must have to continue the application process.
(3) Obtain a surety bond to file with the FMCSA. The required insurance bond amount for a freight broker license is established by the FMCSA and must be obtained prior to OP-1 Application approval. The current bond requirement is $10,000. You must file proof of bond with the FMCSA while the application is pending.
(4) File an FMCSA Designation of Process Agent form for each state you plan to conduct business in. A process agent must be designated for each state the prospective freight broker seeks to operate in case a legal action is filed against the freight broker. This filing must also be completed prior to an application approval by the FMCSA.
(5) Submit all completed materials to the FMCSA. Refer to the FMCSA’s website for the mailing and payment options for submitting the Form OP-1 application, other filings and proper fees. The wait time on an FMCSA application is generally one to two months.