What Is Freight Broker Authority & How To Get It?
You can’t broker freight legally without proper authority. If you’re planning to operate independently, obtaining freight broker authority from the Federal Motor Carrier Safety Administration (FMCSA) is essential. This guide will walk you through the basics and how to get started.
What Is Freight Broker Authority and Why Is It Important?
Freight broker authority is the legal permission granted by the FMCSA to operate as a freight broker in the United States. Without it, you cannot legally arrange transportation of goods for compensation.
Freight broker authority allows you to arrange the transport of goods for compensation. You are not allowed to take possession of freight or operate vehicles unless you also have carrier authority or are a freight forwarder.
The authority is more than just red tape. It’s important to keep the cargo moving with reliable parties. So, why do you need one?
- Credibility and trust: Shippers want to know they’re working with someone accountable. Authority signals that you’re serious, vetted, and backed by a $75K surety bond.
- Financial responsibility: When loads go missing, get damaged, or aren’t paid for, the freight broker bond ensures the parties involved aren’t left hanging.
- Regulatory compliance: The freight industry has clear rules. Brokers who cut corners put everyone at risk, especially in niches involving hazardous materials or high-value freight.
If you’re planning to go independent, getting authorized is non-negotiable.
How To Get Freight Broker Authority (Step-by-Step)
To arrange freight shipments legally, you must obtain operating authority from the Federal Motor Carrier Safety Administration (FMCSA). This process gives you a broker authority license, which allows you to connect shippers with carriers, but not perform the actual transportation of goods yourself.
Getting your freight broker authority means registering with the FMCSA and meeting a few legal and financial requirements. Here’s what the application process looks like:
1. Set up your business entity
Choose and register your business structure (LLC or Corporation) with your state. You’ll need this before applying for your authority.
2. Get a USDOT number
As a broker, you’re not required to operate commercial vehicles, so a USDOT number is not always needed. However, the FMCSA may still assign one during the application process. You can apply via the Unified Registration System (URS).
3. Apply for your MC number
File the OP-1 application through the FMCSA to obtain your Motor Carrier (MC) number. This identifies you as a broker.
- Application fee: $300 (non-refundable)
- Processing time: Usually three to four weeks
You’ll need to choose Broker of Property (not Household Goods) unless you’re planning to move personal items.
You should apply as a business, not as an individual. If you’re registering as an LLC or Corporation (which you should for legal protection and professionalism), use your Employer Identification Number (EIN) not your Social Security Number (SSN) when applying. This ties your FMCSA registration to your freight brokerage, not you personally.
Make sure your business name is exactly the same on:
- Your FMCSA application
- Your surety bond
- Your BOC-3 filing
- Your business registration and bank account
4. Designate a process agent (BOC-3 Filing)
You must file a BOC-3 form to designate a process agent in each state where you’ll operate. This person or company accepts legal documents on your behalf. Most brokers use a BOC-3 filing service, which handles this for a small fee.
5. Secure a freight broker bond (BMC-84) or trust fund (BMC-85)
You’re required to have a $75,000 surety bond or trust fund on file with FMCSA to protect carriers and shippers.
- Costs vary based on credit. Expect to pay $900–$2,000+ per year if you have decent credit.
- If your credit is below 650, bonding may require a co-signer or larger premium.
- Submit proof of bond (BMC-84) or trust (BMC-85) electronically through your provider.
6. Set up your business infrastructure
To operate professionally, set up your tools and accounts:
- Business bank account
- Transportation Management System (TMS) to manage loads and documents
- Insurance (not required, but strongly recommended – especially contingent cargo or general liability)
7. Wait for final authority activation
After all documents are submitted and your BOC-3 and bond are accepted, FMCSA will publish your application in the Federal Register for 10 business days. If no protests are filed, your operating authority becomes active, typically within 20–25 business days of your initial application.
FAQs
1. What’s carrier authority?
Carrier authority is the legal permission a company needs to transport freight for others and get paid for it. It’s issued by the FMCSA (Federal Motor Carrier Safety Administration), just like broker authority.
If you’re running a trucking company (not just arranging shipments but actually moving the freight), you need carrier authority.
2. What’s freight forwarder?
A freight forwarder is a mix between a freight broker and a carrier. They arrange shipments like brokers, but they can also take responsibility for the cargo and sometimes handle part of the transportation themselves.
Freight forwarders often:
- Consolidate shipments.
- Arrange international shipping.
- Store or handle goods temporarily.
- Sometimes use their own trucks or facilities.
They also need FMCSA authority, but it’s freight forwarder authority, not broker authority. They’re more common in international logistics or complex supply chains.
3. Can I broker freight without a CDL?
Yes, a Commercial Driver’s License (CDL) is not required to be a freight broker.
4. What’s the difference between broker authority and carrier authority?
Broker authority allows you to arrange transportation of goods. Carrier authority allows you to transport goods using your own vehicles.
Final Thoughts
Obtaining your freight broker authority is a critical step in launching your brokerage. By following this guide and utilizing available resources, you can navigate the process efficiently.
Our 90-Day Freight Broker Course walks you through the entire setup step-by-step with templates, tools, and expert guidance. Build a real, profitable freight brokerage the smart way.