By
Freight 360
How complicated is it to get licensed as a freight broker? The reality is, it’s not that difficult. Especially when you consider the easy to use online application system, getting your freight broker authority is quite simple. It’s not an instant process, but it won’t take you very long. In this short read, we’ll be walking you through the basic steps to get your freight brokerage licensed.
Most people think that you need some sort of certification or testing to be a freight broker. Why wouldn’t you think that? Other brokers need to take tests – think about stock brokers and insurance brokers. There’s a barrier to entry for these professions that freight brokers don’t face. Even think about driving a car – you have to take a written test to get your learner’s permit. Then you’ll have to prove your actual driving proficiency in a road test with someone that will score you on your performance. Some states even require you to wait a certain length of time, such as six months, after getting your permit before you can even take the road test. Freight brokers? Not so much.
If you have a computer, internet, and $300, you can easily get your freight broker operating authority. This low barrier to entry and no requirement to have industry knowledge is exactly why you’ll find a variety of freight broker courses and training tools available on the internet. We created the Freight Broker Basics Course to bridge this gap of knowledge and give new brokers the tools and information they need to have a shot at launching a successful freight brokerage. Use the link at the bottom to get $100 off this self-paced online course. We even paired it with a group coaching class where we work with new brokers to help them get started. Everyone that signs up for our course gets a free month of coaching.
Rather than being granted a license, freight brokers need an operating authority to legally conduct business. This authority is granted by the Federal Motor Carrier Safety Administration or FMCSA. To be exact, you’ll need to obtain your Broker of Property operating authority from the FMCSA. Motor carriers also get their authority from the FMCSA, but it’s a different type of operating authority than a freight broker. Applying for your freight broker operating authority is done using the Unified Registration System or URS on the FMCSA’s website.
The URS will walk through the steps to apply for your authority. You’ll fill out form OP-1 which is the “Application for Motor Property Carrier and Broker Authority.” This is when you’ll pay the $300 application fee.
Expect to wait around 20-25 days to be granted your operation authority from the FMCSA. During this time, you’ll want to make sure you set up your freight broker bond or trust using form BMC-84 or 85 as well as designate your process agents using form BOC-3. We cover these requirements in our other content. You will be sent a grant letter from the FMCSA which lists your motor carrier (MC) number. Your application process will also get you registered with the USDOT, and you’ll receive a USDOT number in addition to your MC number. There are a small number of exemptions in which a broker would not need a USDOT number and would suffice with just an MC number, but we’re focusing on the vast majority of brokers in this case. Freight brokers and motor carriers both have MC numbers to easily identify their company and authority. This is the number that you’ll use when identifying yourself to carriers. It’s also the number that carriers will use to identify their trucking company to you as a broker.
After you’ve received the grant letter for your authority, you will enter a 10-day protest period. The protest period allows an individual or company to protest any reason that you should not be issued your authority. This step is designed to prevent repeat offenders from continuously starting new freight brokerage businesses after being shut down due to poor business practices and ethics. Finally, you’ll register with UCR, or Unified Carrier Registration. UCR is not an FMCSA program. It refers to an agreement among the individual states which was set up by Congress to govern the collection and distribution of registration information.
So that’s it – you’ve got your freight broker authority in just about a month. No test, no certification, just some registration steps online and a one-time fee. If you’re considering getting your Freight Broker authority, make sure to check out the Freight Broker Basics Course for an in-depth walkthrough of everything you need to do to get your brokerage started.
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