Freight brokers in the United States work under federal rules set by the Federal Motor Carrier Safety Administration (FMCSA). The core rules for brokers are in 49 CFR Part 371, Brokers of Property, and the financial security rules are in 49 CFR 387.307. Part 371 applies to brokers of transportation by motor vehicle. In plain terms, a broker is a person who, for compensation, arranges or offers to arrange truck transportation of property by an authorized motor carrier.
Use this checklist to see what a property broker needs before and after the authority is active.
Before you broker your first load
- Apply for broker authority. To broker freight in your own name, you need property broker operating authority from FMCSA. The fee is $300 for each type of authority (FMCSA broker registration).
- File your $75,000 financial security. FMCSA requires $75,000 in financial security, either a BMC-84 surety bond or a BMC-85 trust fund (49 CFR 387.307).
- File a BOC-3. The BOC-3 names your process agents, the people who can accept legal papers for you. Brokers must name a process agent in each state where they have an office and write contracts (FMCSA process agents). Many brokers use a blanket process agent company to cover this. See our article on what a freight broker process agent is.
- Wait for the authority to become active. Don't arrange loads for compensation until your authority shows active.
While you operate
- Keep your bond or trust at $75,000. If claims draw the bond or trust below $75,000, your authority is suspended unless the security is restored within 7 business days of FMCSA's notice (49 CFR 387.307). Treat any claim as urgent.
- Keep a record of every transaction for three years. Each party to a transaction may review the record of that transaction (49 CFR 371.3).
- Don't present yourself as a carrier. Part 371 bars brokers from representing their operations as those of a carrier, and your advertising should show you are a broker. Do business only in the name in which you are registered with FMCSA (Part 371).
- Follow the limits on compensation and rebates. Part 371 limits when a broker may receive compensation from a carrier and what a broker may give shippers (Part 371).
- Keep brokerage accounting separate. If you run other businesses, keep brokerage revenue and expenses separate from them, or allocate shared amounts on a fair basis (Part 371).
- Household goods brokers: read the special rules in Subpart B of Part 371 before you start.
Where to learn more
These rules change from time to time, so always check the current text on eCFR and the FMCSA website before you act. For a fuller explanation of each requirement, read freight brokers must meet compliance with FMCSA.
If you're opening a brokerage under your own authority and want help with setup, see freight brokerage setup. To study the business first, visit Freight University.