A freight broker puts a trucker and a load together and handles the paperwork. The freight broker never has physical control of the load. Many freight brokers work out of their homes using the Internet and a fax machine. Anyone wanting to work as a freight broker must get a license, or Broker Authority, from the federal government.
Federal Regulations
The Federal Motor Carrier Safety Administration processes the application and grants the authority when it’s complete. The first step is to file an Application for Motor Property Carrier and Broker Authority form with FMCSA and pay the fee. The application is available on the FMCSA website. FMCSA will process the application and issue a Motor Carrier Number to the successful applicant.
The Surety Bond
The applicant secures a surety bond of $10,000 U.S. Dollars from a bonding company. The applicant may put $10,000 in a trust fund if she has it. The surety bond is different from insurance. For a fee, a bonding company will promise to pay any costs a freight broker occurs because of an error on the freight broker’s part up to the amount of the bond. The bonding company will then act as a creditor to the freight broker and demand payment of the entire amount.
The Final Steps
The applicant has to file proof of the bond with FMCSA. The freight broker chooses an process agent in each state in which he plans to do business. The process agent is a point of reference for any legal action. The applicant has to file a Designation of Process Agent Form and pay a fee for each one. FMCSA will process the final application and issue the Authority. The final step takes between four and six weeks.
