What is a Texas Freight Broker Bond?
Get registered as a Freight Broker by getting bonded!
The Freight Broker Bond is not just a requirement to become registered in the state of Texas. It is a federal statute.
The rules and regulations of the Federal Motor Carrier Safety Administration (FMCSA), by Title 49 §13906 of the United States Code, states that the Secretary can enforce a surety bond to freight brokers to ensure the following:
- To financially protect the passengers of the freight brokers
- To financially safeguard the carriers of the freight brokers
How much is the bond amount?
The Freight Broker Bond amount is $75,000. It will remain valid for the day it becomes effective until canceled.
If the freight broker’s credit score is excellent, he can pay a surety bond cost that is less than 1% of the total bond amount!
There is another alternative to this that the FMCSA provides: Trust Fund Agreement. With Trust Fund Agreement, you place the entire $75,000 under the control of a Trustee, to be used as payment for claims.
If a claim arises (ex. failure to pay the shipper), the Trustee will draw money from the $75,000 to settle the claim, and the freight broker will have to replenish the amount drawn within 30 days.
With a Freight Broker Bond, the freight broker will only pay a fraction of the bond amount. You don’t need to give the entire $75,000. In addition to this, since surety bond companies are regulated, the said companies are guaranteed to have sufficient financial capability for such claims.
Get your free quote for this bond!
How do I obtain a Freight Broker Bond?
You can send us an application for the said bond. An expert underwriter will start with the pre-qualification process soon after. The underwriter will check if you have performed your obligations on time in the past, your financial capability, credit score, and other relevant information.
Once qualified, you will be asked to sign an indemnity agreement. We will complete the BMC-84 or Freight Broker Bond form for you, and that’s it! You’re bonded!
What are the other requirements to be registered as a Freight Broker?
- Completed Motor Property Carrier and Broker Authority application form OP-1
- Completed Freight Broker Bond form BMC-84
- Pay the necessary processing fee of $300 per Operating Authority such as the following:
- Motor Common Carrier of Property (except Household Goods)
- Motor Contract Carrier of Property (except Household Goods)
- Motor Common Carrier of Household Goods
- Motor Contract Carrier of Household Goods
- Broker of Property (except Household Goods)
- Broker of Household Goods
- United States-based Enterprise Carrier of International Cargo (except Household Goods)
- United States-based Enterprise Carrier of International Household Goods
The processing time will be 4-6 weeks. Once approved, you will get your MC number or Operating Authority.
Need to get bonded immediately? Call us today!