Freight Broker Licensed
Wouldn’t it be great if trusted all of the parties involved in freight without a shadow of a doubt?
Sometimes this is indeed possible – when you’ve worked with the same partners for years and you’ve managed to build a work environment of mutual trust and cooperation.
Most of the time, however, it’s not a bad idea to use certain available channels to check if the freight broker whose services you are about to use is licensed.
Check the Broker’s Credentials Online
All freight brokers are regulated by the Federal Motor Carrier Safety Administration (FMCSA).
Just go to the agency’s website to check whether the broker you are working with has a valid license. Make sure that it’s been renewed on time and the required surety bond hasn’t been cancelled.
The website will also provide you with additional information, such as whether the license has ever been revoked, and perhaps later reinstated, and how many times has that happened.
Even if the broker checks out online, it’s always a good idea to request a copy of the broker’s operating authority. Compare whether the name, motor carrier number and all dates appear the same as the ones in the FMCSA database. If there are discrepancies, ask why and use extra caution.
To make sure your broker is legitimate, ask these three key questions:
#1 Is your broker REGISTERED with the Unified Carrier Registration (UCR) Program?
UCR is a federal, but state-administered program that became effective in 2007. It says that states must collect fees from motor carriers, freight forwarders and brokers, and leasing companies, based on the number of commercial motor vehicles in their fleets.
The registration is mandatory. If a broker or carrier does not register but engages in interstate commerce, they may become subject to law enforcement action. Steer away from legal troubles when possible, and check in advance to see if a broker has a current registration.
#2 Is your broker INSURED?
Every freight broker must have an insurance certificate (but not required by law, but to show MORE legitimacy due to the investment in risk mitigation for themselves and their shipper clients) and you should make sure to obtain a copy for your files. Once in your hands, verify all the information on the certificate.
Pay special attention to whether the insurance company is the same as the one listed on the FMCSA website. Along with that, all other information you find on the agency’s site should match with the certificate. Double check the insured name, policy numbers and effective dates.
Even better, you can contact the insurance company and ask them if the policies are still in effect.
#3 Is your freight broker BONDED?
Freight brokers are obliged to purchase a surety bond in order to be licensed and operate legally. The bond, also known as BMC-84, is required by FMCSA and it’s placed to ensure fair play. If a carrier isn’t paid as agreed, they can make a claim against the bond and receive all due payments.
Prior to Oct. 1, 2013, the minimum bond requirement was $10,000, but then it hiked to $75,000. Losses up to $75,000 will be compensated fully!