What is a Freight Broker?
- Thread starter runrunner
- Start date
jimlookup
Seasoned Expediter
I know a freight broker is required to have BOC 3 and a $10,000 bond, but how much and what kind of insurance are they required to carry? I am considering a broker and FMCSA says they have property broker authority. FMCSA also seems to be saying $300,000 bodily injury and property damage is required but this broker does not have that. Thanks in advance for your answers
runrunner
Veteran Expediter
Since a broker never has possession of the freight,I don't think he has to insure the freight,that is up to the carrier,but the Broker must put up some sort of bond. I think this is correct.
FMCSA Registration Requirements - Federal Motor Carrier Safety Administration
I am pretty sure if you want to move freight for a broker you have to have carrier authority and insurance.
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Murraycroexp
Veteran Expediter
Correct. Carrier covers freight.
Bond requirement is $10,000 currently but is going up to $75,000 in October.
Bond requirement is $10,000 currently but is going up to $75,000 in October.
runrunner
Veteran Expediter
Thanks for your help.
Murraycroexp
Veteran Expediter
Brokering out freight is easy.
Trusting another carrier with your customer's freight is difficult at first, but doable.
I think we've used about 20 carriers on Sylectus in the past year. Mostly vans but a few straights too.
I only regret using ONE of those carriers.
Trusting another carrier with your customer's freight is difficult at first, but doable.
I think we've used about 20 carriers on Sylectus in the past year. Mostly vans but a few straights too.
I only regret using ONE of those carriers.
Murraycroexp
Veteran Expediter
jimlookup
Seasoned Expediter
I searched this link and couldn't find a answer to this question.
Let's say I don't have carrier authority. A property broker calls with a load, and I accept it and do it. Now we have commited a FMCSA sin. Which of us is going to hell?
Murraycroexp
Veteran Expediter
BIG fines for operating commercially (for money) without authority. And without the required insurance your authority is revoked. Just don't do it.
jimlookup
Seasoned Expediter
I have commercial insurance and am operating a van so I don't need authority to haul for multable carriers. Without going to the FMCSA web site, how do I know this property broker, who I have signed a contract with, does not have carrier authority (Cancelled) and is thus, hiring me illeagally? What is my liability? The broker still has property authority.
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Murraycroexp
Veteran Expediter
If they're a "broker only" they don't have it need carrier authority.
jimlookup
Seasoned Expediter
Then I would assume they can only give loads to under 10001 lb trucks, yes?
Murraycroexp
Veteran Expediter
Carrier authority is required to make money hauling goods/property. Unless I'm off base.
Murraycroexp
Veteran Expediter
But if you are signed on with a carrier you are operating under THEIR authority.
purgoose10
Veteran Expediter
A broker is not required to have carrier authority. Though not required a broker obtains a copy of the carriers authority (that's pulling the load), insurance and files it for information. The broker sometimes is audited by the state DOT and required to show proof of authority and insurance for a load they randomly choose from the brokers files. They also may ask for proof if they audit the carrier about a load secured by the broker.
As far as customers the broker relies on they're personnel relationship with the customer or a written agreement. Some large manufacturers require a yearly bid on freight movements before deciding on a carrier or a broker.
As was stated earlier the bond goes up to $75k in October. Most good brokers carry additional insurance to cover freight just in case.
As far as customers the broker relies on they're personnel relationship with the customer or a written agreement. Some large manufacturers require a yearly bid on freight movements before deciding on a carrier or a broker.
As was stated earlier the bond goes up to $75k in October. Most good brokers carry additional insurance to cover freight just in case.
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jimlookup
Seasoned Expediter
When a carrier is going belly up, after they stop making payroll, they usually stop paying their insurance premiums. Then they loose their carrier authority. However, they still have their broker only bond in tact. I guess my question is, who can they give loads to? If they give a load to a under CDL van, in just about every case, neither party has carrier authority. Can they give loads to under CDL vans because they aren't required to have their own authority? The vans in question made a contract with this property broker when they had carrier authority and have commercial insurance.
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Murraycroexp
Veteran Expediter
The van would have to have his own authority if brokered directly from the broker. In that case he IS the carrier.
Murraycroexp
Veteran Expediter
Depends on how big they are or who even cares. Or who needs them. Rumors spread fast among Sylectus users. Mainly because carriers are watching out for other carriers.