To start a freight brokerage, you will need to obtain a freight broker license. This article will provide an overview of the requirements and costs involved in obtaining this license. The cost of the license is $300, and there are also other costs associated with getting started such as obtaining insurance and registering your business.
Freight Broker License Requirements
To get a freight broker license, you need to submit an application to the Federal Motor Carrier Safety Administration (FMCSA). This application costs $300 and you also have to obtain a surety bond. You will need to provide proof that you can pay for any damages that might happen. This can be done with insurance or a trust fund. In addition to the application and surety bond, you will also need to provide the following:
- Your social security number
- A copy of your birth certificate or passport
- Proof of U.S. citizenship or legal residency
- A list of any business names you have used in the past 3 years
- Your physical address
- A list of any motor carriers you have used in the past 3 years
- Your email address
- Your credit report
- A copy of your driver’s license
Once your application has been received, the FMCSA will conduct a background check. Your application may be denied if you have any criminal convictions or outstanding judgments against you.
If your application is approved, you will be issued a freight broker license. Approval can take up to 120 days. You must renew your license every two years.
Freight Broker License Cost
The cost of a freight broker license is $300 for the initial application and $300 for each renewal. You will also need to obtain a surety bond in the amount of $75,000. Your actual cost is a percentage of the bond amount and can range from as little as $938 to $7,500. If you choose to insure your freight brokerage, you can expect to pay around $3,000-$3,600 per year for this coverage.
Operating Authority or MC Number
You will also need to obtain an Operating Authority or MC number, which is a unique identifier issued by the FMCSA. There is no cost for this number. It is important to note that you cannot operate as a freight broker without an MC number.
Standard Carrier Alpha Code (SCAC Code)
In order to ship freight, you will need to obtain a SCAC code from the National Motor Freight Traffic Association (NMFTA). This code identifies your freight brokerage to shippers and carriers. There is a one-time fee of $72 for this code.
The benefits of having a SCAC code include:
- Eligibility to participate in government freight programs
- Preferred billing status with many carriers
- Access to reduced rates for trucking services
Conclusion
Obtaining a freight broker license is a necessary step in starting your own freight brokerage. The cost of a freight broker license is $300 for the initial application and $300 for each renewal. You will also need to obtain a surety bond in the amount of $75,000 and a SCAC code from the NMFTA.
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