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Guide For Becoming A Licensed Freight Broker

Freight brokers are an essential part of the freight industry, helping it to grow and function. As the trucking industry has grown over the past few years. The reliance on licensed freight broker by both shippers and carriers has steadily increased. To become a freight broker, sometimes also termed as a truck broker or a transportation broker, one needs to follow certain legal and practice requirements.

How much does the freight broker make?

According to the stats of the US Bureau of Labor, freight brokers have a mean annual wage of nearly $46,070. Online, some freight brokers report making as much as $90,000 or more a year. This may depend on the type of freight they deal with, the amount of business they do, and their experience and logistic skills. This places most licensed freight broker above the national median income and even above the average household income.

Requirements to get the freight broker license 

Some of the freight broker license requirements that are mandatory for an individual to follow are such as –

  • Need to fill out an application
  • Obtaining a bond or trust fund agreement
  • Picking a process agent
  • Considerations 

How one can become a licensed freight broker?

How to become a licensed freight broker? To become a licensed freight broker one need to follow these steps such as –

Step 1 – Picking up a business structure

A freight brokerage is business and will need to engage as such. This means selecting and then deciding a structure for the business such as –

  • Sole Proprietor
  • Partnership
  • Corporation

The right choice may not be obvious. Plus, there are some pros and cons to each of these options, and long-term significance as well. That’s why many entrepreneurs, freight brokers, consult with a lawyer or accountant about which structure one needs to select. 

Step 2 – Obtaining a motor carrier number

One can obtain a motor carrier number from the Federal Motor Carrier Safety Administration (FMCSA). FMCSA is an agency that can administer freight brokers and grants licenses. The FMCSA endeavors brokers to fill out the application form OP-1. This form functions as an initial application for a freight broker license. The application will need to select either “Broker of Household Goods” or “Broker of Property” under Section III designating the Type of Operating Authority. One needs to fill in the following details in the application form such as business name, address, and type. While submitting an application form, the broker needs to pay an application fee of $300. Once the application is approved by FMCSA, the broker receives his/her Motor Carrier Number within four weeks. 

Step 3 – Securing a surety bond

Once a freight broker receives a Motor Carrier Number. They now need to obtain a surety bond or trust fund agreement. Sustainably, surety bonds and trust fund agreements act as insurance for the broker in case of any accidents, injuries, death, or loss of real estate property. Every freight broker will require to prove that they have a type of surety bond known as freight broker surety bond before being granted a freight broker license. This process can seem to be a bit confusing and difficult at first. Especially compared to other steps on this list, it is quite easy to obtain a surety bond.

Securing a surety bond involves finding a trusted surety agency, completing an application form, and submitting a credit check. The license requires a $75,000 surety bond. The cost of this bond will be a small percentage of the total, less or more depending on the credit. A freight broker can purchase both of these documents through third-party insurance companies and banks. The fee to get a surety bond or trust fund agreement varies depending on the applicant’s credit history. 

Step 4 – Picking a process agent

The freight broker must obtain a process agent, also termed a legal agent, in each of the 48 continental states where they maintain an office or establish contracts. A process agent act as a representative for a freight broker if the broker must be served with court papers. The FMCSA acquiesces the broker to act as own agent in the state where they have a physical office. The process agent needs to receive legal process or lawsuit papers on the broker’s behalf in case of a lawsuit against the broker. After securing legal agents for each state. The broker needs to file a Designation of Process Agents for Motor Carriers, Brokers, and Freight Forwarders with FMCSA.  

Step 5 – Registering the logistic business

This is the final step that one needs to follow before getting your freight broker license. To get a freight broker license one need to register with the Unified Carrier Registration: a nationwide database of broker registrations, financial liability information, and fee disclosures. By joining this registry, a freight broker agrees to follow rules that apply to everyone in the logistic industry. And need to pay all the required fees to the state where the main office is located. Freight brokers also need to get familiarized with all the rules consistent with freight transport in the states where they conduct their business. Knowing these rules could benefit you to prevent expensive infractions later, including claims against the freight broker surety bond. 

Wrapping Up:-

This is some of the information by the benefit of which one can become a licensed freight broker. If you still face any difficulty in getting your freight broker license, you can contact LGOA by visiting their website i.e. You can even drop them a mail at their email id i.e. [email protected].

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