Freight Broker Surety Bonds

If you want to obtain a property broker license from the FMCSA, you will need this bond. It’s required to operate legally in the U.S. The bond requirement ensures freight brokers and freight forwarders abide by industry standards and helps prevent fraud and failure to pay motor carriers as promised.

To obtain a BMC-84 bond, you must pay a premium equal to a small percentage of the $75,000 bond. The exact rate may depend on various factors, including your credit score, industry experience, and business and personal financial information. As a ballpark estimate, you might pay anywhere from 1-12% (or $750-$9,000).

Freight broker bonds are valid for one year and then must be renewed. Freight brokers or the FMCSA may cancel the bond by giving a 30-day notice.

Freight brokers act as intermediaries – negotiating transactions between freight forwarders or freight carriers and shippers. They don’t handle shipments or cargo directly. Freight brokers typically only operate within a single country.

Freight forwarders coordinate shipment transportation via third-party carriers, but they also store, package, handle, and consolidate freight directly. Unlike brokers, freight forwarders may operate internationally with the authorization granted by the FMCSA, transporting freight legally across borders.

A single company may or may not manage both roles.

Freight broker bonds are sometimes called ICC broker bonds. However, the ICC (Interstate Commerce Commission) ended in the mid-90s, and the FMCSA took over.

The FMCSA requires freight brokers to acquire a $75,000 freight broker bond (BMC-84) before they may be licensed to operate. The bond ensures that brokers comply with their operating authority – the FMCSA – and run their businesses honestly and ethically.

To verify the status of your freight broker surety bond and license, visit the FMCSA Licensing and Insurance Public website and enter your USDOT or MC number. On the following page, navigate to the last column, click “view details,” and select the PDF report. In the “insurance type” field for your bond, you’ll see the status. If it says “yes,” you have “insurance on file,” your bond is active.

You can expect lower bond rates with a higher credit score (and vice versa). As your credit score increases or decreases year after year, your bond premiums may change. Credit score changes, surety underwriting guidelines, and public records and collections on your credit report can affect your renewal premiums.

While you don’t need an active MC number before beginning your freight broker bond application, you will need it to file your bond with the FMCSA. If you fall into any of the following broker categories, you will need an MC number and a DOT number:

• Brokers transporting (or arranging for the transport of) passengers in interstate commerce
• Brokers transporting (or arranging for the transportation of) federally regulated commodities in interstate commerce
• For-hire carriers

A USDOT Number is a unique identifier for monitoring and collecting a business’s safety information obtained during audits, crash investigations, compliance reviews, and inspections. To get your USDOT Number, you can register online using the Unified Registration System. Find out if you need a DOT Number.

If all the information you submit in your application is correct and complete and you meet all the FMCSA’s registration requirements, you should qualify for a bond – even with a lower credit score.

If an FMCSA-regulated entity changes its name or address (or other record details), it must promptly update its USDOT and operating authority record.

You’re required to update your information every two years – even if you shut down your business, cease interstate operations, or haven’t changed any data since the previous update. If you fail to complete your “Biennial Update,” your USDOT number may be deactivated, and you may face civil penalties of up to $1,000 per day.

You can make updates for free online using your USDOT number, EIN/SSN, assigned PIN, and Company Official information. You can also view upcoming filing deadlines.