Starting a freight brokerage involves steps similar to other small businesses, with some unique requirements for operating legally in the transportation industry.
Business Entity
Form a formal business entity such as an LLC or corporation and register with your state. Obtain an EIN from the IRS and any local business licenses if required. Consult a business attorney or CPA for structure advice. Set up a business bank account and official records.
FMCSA Broker Authority
Freight brokers must obtain operating authority from FMCSA through the Unified Registration System (URS). Select Broker of Property or Broker of Household Goods during registration. The application fee is $300. Brokers also receive a USDOT number as an identifier even though they do not operate trucks. Authority is typically granted within 4-6 weeks if all requirements are met.
BOC-3 (Process Agents)
Brokers must file a BOC-3 form designating process agents in each state. Many companies offer blanket filing services for $50-100. FMCSA will not activate authority without this filing.
$75,000 Surety Bond or Trust
Brokers are required by law to maintain a $75,000 surety bond or trust (BMC-84/BMC-85) to guarantee payment to carriers. You do not need to post $75,000 in cash; a bonding company issues the bond for a yearly premium based on credit and financials. Form BMC-84 is filed with FMCSA by the bonding company. Authority cannot be granted without this bond.
Insurance
Brokers are not legally required to carry cargo liability insurance, but many purchase contingent cargo insurance or general liability insurance for protection. Optional insurance policies provide coverage if a carrier fails to deliver or for office operations and employees.
Unified Carrier Registration (UCR)
Brokers must also register annually in UCR, even without trucks. Fees are minimal (around $59) for brokers with no vehicles. This compliance is required to maintain legal operation.
State Regulations
Check for state-specific licensing requirements. Some states may require local business licenses or foreign LLC registration if you operate across state lines. Federal authority generally preempts state freight broker regulations.
Office Setup and Operations
Set up a dedicated business phone line and reliable internet. Consider Transportation Management Software (TMS) or spreadsheets to track loads, payments, and carrier information. Maintain organized records and prepare your finances with a business bank account and optional line of credit. Cash flow management is important as brokers pay carriers before receiving payment from shippers.