When considering becoming a Freight Broker. One question that often comes up is whether freight brokers need a SCAC code. This article will help to answer that question and provide some insight into what SCAC codes are and what they do.
What is a SCAC Code?
A Standard Carrier Alpha Code (SCAC) is a unique two-to-four-letter code used to identify transportation companies. These codes are used by shippers and freight forwarders to streamline shipping paperwork and track shipments throughout the supply chain.
The first two letters of a SCAC code identify the mode of transportation, such as “RA” for rail, “CA” for truck, or “IN” for air. The company chooses the last two letters and must be unique to that company within the mode of transportation. For example, Railroad Company XYZ would have the SCAC code “RAXYZ.”
Do Freight Brokers Need a SCAC Code?
The answer is maybe. If you are only working with one carrier, then you probably do not need a SCAC code. However, if you plan to work with multiple carriers, or if you want to ship via multiple modes of transportation, then you will need a SCAC code.
How to Get a SCAC Code
If you have decided that you need a SCAC code, the process for obtaining one is relatively simple. You will need to fill out an application and submit it to the National Motor Freight Traffic Association (NMFTA), along with a fee of $300. Once your application has been processed and approved, you will be assigned a SCAC code.
There are a few requirements that you must meet to be eligible for a SCAC code:
- You must be a legal entity, such as a corporation, partnership, or limited liability company (LLC).
- You must have a U.S. DOT number.
- You must have liability insurance.
- You must have a bond.
SCAC Benefits
Having a SCAC code offers many benefits, such as:
Reduced paperwork: A SCAC code can help to reduce the amount of paperwork involved in shipping, as it is a standard way to identify your company.
Increased efficiency: A SCAC code can help to make your shipping operations more efficient, as it is a quick and easy way for carriers to identify your company and track shipments.
Better rates: You may be able to negotiate better shipping rates with carriers if you have a SCAC code.
Conclusion
Whether you need a SCAC code as a freight broker depends on your specific situation. If you plan to work with multiple carriers or ship via different modes of transportation, you will need to obtain a SCAC code. The process for obtaining a SCAC code is relatively simple and there are many benefits to having one.