The Federal Motor Carrier Safety Administration (FMCSA) has certain requirements for a business to function as a transportation broker to get your authority.
- MC number (Form OP-1)
- Freight Broker Bond (Form BMC-84)
- Insurance – Contingent Cargo Insurance and possibility General Liability (Form BMC-34 or BMC-91 or BMC-91X)
- Process agents (Form BOC-3)
- Unified Carrier Registration (UCR) (this is through various states)
With this comes confusion. Who is the FMCSA? What is an MC#? How much does it cost? Why is a Bond required? Why do I need Contingent Insurance if the carrier has insurance? What in the world are process agents and why is this required? Over the next few blogs, we are going to get into each of these areas and answer these questions.
The Federal Motor Carrier Safety Administration (FMCSA) is the governmental agency under the US Department of Transportation which regulates the entire trucking industry. You can reach them at www.fmcsa.dot.gov.
With the FMCSA, it starts with having the proper authority. Broker authority is just one type of authority that they issue. A lot of their focus is to regulate the trucking companies and there are a bunch of different forms and safety regulations that are involved with owning trucks.
As a broker, you file your application on Form OP-1. This is the authority to arrange the transportation of property belong to others by a motor carrier for profit. Notice that the definition states “Arrange” transportation. A broker does not have the authority to move the cargo themselves. This is to obtain an MC# which is a Motor Carrier #. Basically, it is your number assigned to that authority.
There is a $300 application processing fee with the FMCSA that is required. They have a link on their website to help you through the process and will keep you updated as to the status. Listed above are the other requirements that are necessary to complete the application for the MC# to be approved. The details for the other requirements will be included in other blogs.
Once the FMCSA shows everything complete, the business name and MC# will be posted on their registration page for 10 days. This allows others to protest if they show due cause. Once everything has been approved, the broker authority is granted.
The authority is good between all US States. There are not further “authority” charges due, although you need to make sure you continue to update your registration, insurance, bond etc. If any of these policies lapse, they will make your authority inactive.
This is #2 in our Series on Starting a Transporation Brokerage Business. Leave a comment or question below.