How To Get Your Freight Broker License
According to experts at Boa Logistics, there are currently over 16,000 freight brokers in the continental United States. Some work independently from home offices. Others work with small firms that handle just a few specialized accounts. Still others act as agents for large, global shipping and logistics companies.
Yet they all share one thing in common: They are properly trained and equipped to help their customers move products and commodities from one location to another, safely and on time.
In addition, all of them who operate legally are properly licensed to represent themselves and their services to senders and receivers, shipping providers, insurance companies and government agencies.
Does a Freight Broker Need a License?
Yes. To broker freight, you need to comply with the license requirements of the US Federal Motor Carrier Safety Administration (FMCSA). The license is also known as Motor Carrier Operating Authority (MC authority or MC number).
Many freight industry professionals start working in the brokerage environment while they are working toward formal licensing. For example, industry experts note that you can work in transportation and logistics before becoming an independent freight broker.
One great approach is to start working with a carrier or logistics company. Some successful students have partnered with existing brokers or transportation professionals as they complete their freight broker training course.
Why Does a Freight Broker Need a License?
Freight brokers connect producers with carriers and receivers of commodities and products. They help negotiate rates and coordinate pickup and delivery schedules. So, they need to a federally regulated license to ensure they’re acting in good faith.
Freight brokers also make the most of cargo capacity. They help trucks, trains, ships and cargo planes run with efficient loads. This helps reduce shipping costs and manages their customers’ overall cost of doing business.
The global web of production, manufacturing and distribution is a 21st Century economic miracle. Working with technology, commitment and expertise, freight brokers play a key role in making this miracle happen.
How to Get a Freight Broker License:
Freight brokers are a vital link between producers, shippers and distributors. With more shopping done exclusively online, the logistics industry is booming, as is the need for skilled, licensed freight brokers.
The process to getting a license may seem complicated, but once you get fully trained on the industry, you can get your license in 3-4 weeks.
Register with the Federal Motor Carrier Safety Administration (FMCSA)
Filling out the URS form to register with the FMCSA is your first step. In addition to filling out an application, you need to pay a fee of $300 with your application submission.
Receive Your Motor Carrier Number
Freight brokers are regulated by the US Department of Transportation (USDOT), under the FMCSA. To operate as a freight broker, you will need to be granted authority to operate, also known as Motor Carrier authority or “MC Authority.”
Obtain and Provide Proof of Coverage
Freight broker must have suitable coverage or insurance for the cargo you’re forwarding. You can use a BMC-84 or BMC-85 bond to prove your liability:
- BMC-84: a $75,000 surety bond freight broker bond that’s paid for with annual fees annual fees.
- BMC-85: a trust fund bond that requires at least $75,000 worth of collateral
Designate a Process Agent
Per the FMCSA, a process agent are representatives “upon whom court papers may be served in any proceeding brought against a motor carrier, broker, or freight forwarder.”
Essentially, the process agent represents your freight brokerage and receives court documents if there’s legal action against your business.
To designate a broker, you have to complete a BOC-3 form (Designation of Process Agent form) as proof.
Get Your License
Since the authority is granted in the form of a number, you will often hear “MC Authority” referred to as your “MC Number.”
With your MC Number, you will be eligible to complete the FMCSA application process. The FMCSA registration process requires you to declare the type of business you will operate (for example, trucking company or freight fowarder). Once approved, you will operate under FMCSA regulations.
How Freight Broker Licensing Works
Once you have been trained in the freight brokerage industry, set up your business entity and begun to develop your client and provider networks, you will apply to the USDOT for your MC Authority.
Before you start operating as a freight broker, you will need to do two more things:
- Check your state’s notification and registration requirements.
- Complete the USDOT’s New Entrant Safety Assurance Program.
At that point, you will be eligible to obtain your permanent USDOT registration.
The Value of Freight Broker Training
As you can imagine, this process can get complicated. Like so many things in life, exper guidance guide sets you on the right path.
Taking an expert-developed online training course will help you get your freight broker license.
We designed our course to provide the knowledge and insight you need to start a career in the freight industry. Better yet, expert freight brokers instruct the course and provide a weekly resource call to learn more about the industry.
To enroll in our Freight Broker Training course, click the link:
Freight Broker Training
6 Months | 180 Course Hours
From licensing and operations, to sales and marketing, learn how to run a domestic freight brokerage or agency in the United States.
Start Learning
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