A Freight Broker's Guide to Success: Developing a Successful Brokerage Achieve success in freight brokering by mastering networking, leveraging technology, ensuring compliance, and delivering exceptional service. Discover essential growth strategies. <!-- wp:paragraph -->
<p>In the fast-paced world of freight brokering, success hinges not only on efficiently moving goods but also on cultivating robust networks, embracing technology, and maintaining compliance. As a freight broker, mastering these elements can pave the way for sustainable growth and profitability. In this article, we'll delve into essential strategies that can propel your brokerage forward. Whether you're a seasoned broker or just starting out, these insights will equip you with the tools needed to thrive in the dynamic landscape of logistics.</p>
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<p class="has-medium-font-size"><strong>Build Your Network</strong></p>
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<p>Networking is a major key to success in the freight brokerage business. Start by reaching out to shippers, carriers, and other industry professionals to build relationships and establish your credibility. Attending industry conferences like Smc3 Jumpstart, Manifest, Rila link, or other local events can be another great way to develop relationships and stay up-to-date in this fast-paced world of logistics. Join professional associations and leverage online platforms to connect with potential clients and partners. Building a strong network will not only help you find opportunities but also provide valuable insights and support as you grow your business.</p>
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<p class="has-medium-font-size"><strong>Vetting Carriers</strong></p>
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<p>Shippers expect their cargo to be moved efficiently, safely, and without being double-brokered. Part of your job is to ensure the carriers you use are both legitimate and compliant. This is a crucial step in protecting your company and shipping partners from financial harm caused by fraudulent or malicious carriers . Take the time to develop an effective vetting method. Verifying office addresses, insurance documents, phone numbers, and the individuals you are working with can save you from using carriers who consistently damage loads or participate in illegitimate practices. There are many services available we can recommend to streamline your vetting process such as: <a rel="noreferrer noopener" href="https://freightvalidate.com/" target="_blank">Freight Validate</a> and <a rel="noreferrer noopener" href="https://www.mycarrierportal.com/" target="_blank">MyCarrierPackets</a>.</p>
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<p class="has-medium-font-size"><strong>Explore Factoring</strong></p>
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<p>As you develop a larger client base, uncollected shipper invoices can build up and disrupt your brokerage’s cash flow. This creates funding gaps that jeopardize your ability to pay carriers. Unpaid carriers can, and will, submit claims if they are not paid on time. Factoring can be a useful tool to bridge any funding gaps that arise from different payment terms between shippers and carriers. Factoring companies will buy your uncollected shipper invoices and provide funding for a small fee. While there are different ways to alleviate funding gaps, factoring functions as a hands off method.</p>
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<p class="has-medium-font-size"><strong>Embrace Technology</strong></p>
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<p>In today's digital age, technology plays a crucial role in the logistics industry. Invest in freight brokerage software and other digital tools to streamline your operations, manage shipments more efficiently, and stay competitive in the market. From load tracking and dispatching to invoicing and analytics, leveraging technology can help you optimize your workflows and provide better service to your clients.</p>
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<p class="has-medium-font-size"><strong>Stay Compliant and Up-to-Date</strong></p>
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<p>As a freight broker, it's essential to stay informed about changes in regulations, market dynamics, and industry best practices to ensure that your business operates legally and ethically. Consider listening to podcasts about the industry such as the <a href="https://www.freightcaviar.com/podcasts/" target="_blank" rel="noreferrer noopener">Freight Caviar Podcast</a>. Additionally, continue investing in your professional development through ongoing education and training to stay ahead of the curve in this rapidly evolving industry.</p>
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<p class="has-medium-font-size"><strong>Provide Exceptional Service</strong></p>
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<p>Last but not least, focus on providing exceptional service to your clients and building long-term relationships based on trust and reliability. By consistently delivering value, exceeding expectations, and solving problems proactively, you'll earn the loyalty and repeat business of shippers and carriers alike.</p>
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<p>Thriving in the freight brokerage industry necessitates a multifaceted approach. Building robust networks with shippers and carriers, leveraging financial tools like factoring, integrating technology for efficiency, and prioritizing exceptional service are paramount. By mastering these strategies, brokers can navigate the complexities of the logistics landscape and position themselves for sustainable growth and success.</p>
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<p>For more guides check out our <a href="https://jetsurety.com/articles/category/freight">Freight Broker’s Guide to Success series</a></p>
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A Freight Broker's Guide to Success: Developing a Successful Brokerage
Achieve success in freight brokering by mastering networking, leveraging technology, ensuring compliance, and delivering exceptional service. Discover essential growth strategies.
A Freight Broker's Guide to Success: How to Become a Broker Step into the dynamic realm of logistics by launching your own freight brokerage! Start your journey and chart your course to success in this thriving industry. <!-- wp:paragraph -->
<p>Are you intrigued by the fast-paced world of logistics, where every shipment represents a puzzle waiting to be solved? If you thrive in dynamic environments and possess a knack for negotiation and problem-solving, a career as a freight broker might be your calling. In this edition of A Freight Broker's Guide to Success, we'll embark on a journey together, learn the ins and outs of becoming a freight broker and lay out a roadmap to help you kickstart your career. So, buckle up and prepare to dive headfirst into a career filled with opportunities for growth, innovation, and impact in the global supply chain.</p>
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<p class="has-medium-font-size"><strong>What is a Freight Broker?</strong></p>
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<p>A freight broker acts as an intermediary between shippers (those who need freight moved) and carriers (those who move freight) within the logistics industry. Brokers facilitate the movement of freight by sourcing carriers, negotiating the best rates and ensuring that shipments reach their destinations safely and on time.</p>
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<p class="has-medium-font-size"><strong>Step 1: Understand the Industry</strong></p>
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<p>While it's not required to have prior experience, it's essential to familiarize yourself with the logistics industry. Before diving into the world of freight, take the time to research the field. Consider looking at market trends, various modes of transportation (such as trucking, rail, air, and ocean freight) and regulations governing the freight business. Having an understanding of the industry will not only help you build the knowledge to run a successful business but also attract and retain customers.</p>
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<p class="has-medium-font-size"><strong>Step 2: Gain Industry Knowledge and Skills</strong></p>
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<p>Formal education is not required to become a freight broker, but it can be useful. Having a well-rounded understanding of logistics principles and business practices can give you a competitive edge when starting your new business venture. Consider taking courses or obtaining certifications in areas such as supply chain management, transportation logistics and business administration. Additionally, honing your communication, negotiation and problem-solving skills will be invaluable in this field as most issues that arise from this profession require quick responses and discerning judgements.</p>
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<p class="has-medium-font-size"><strong>Step 3: Develop Your Business Plan</strong></p>
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<p>Like any entrepreneurial venture, becoming a freight broker requires careful planning and strategizing. This is a good time to consider what salary you may expect to earn. Freight brokers make money through commissions on delivered loads. Typically a successful brokerage has a profit margin of about 12% - 18%, but this can vary widely depending on the amount and type of business your firm engages in. Take time to develop a detailed plan that will help outline your business's path to success. Check out our previous entry "<a href="https://jetsurety.com/articles/detail/develop-freight-business-plan">A Freight Broker’s Guide to Success: How to Develop a Business Plan</a>" for a more thorough exploration of this step.</p>
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<p class="has-medium-font-size"><strong>Step 4: Set Up a Business</strong></p>
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<p>Before applying for your brokerage authority, you'll need to set up a business. This can be completed on your own, but you’ll need to research specific regulations as they vary from state to state. Alternatively, you can utilize a service company that will help you set up your business without getting into the nitty-gritty of state regulations. </p>
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<p>The FMCSA allows multiple types of business formations including Corporations, Limited Liability Companies, Partnerships, Limited Liability Partnerships, Sole Proprietors, Trusts, or other. There is a wide range of pros and cons to each and we highly suggest taking your time to research and decide what works best for you and your upcoming business.</p>
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<p class="has-medium-font-size"><strong>Step 5: Applying for Brokerage Authority</strong></p>
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<p>To legally operate as a freight broker in the United States, you'll need to obtain broker authority from the Federal Motor Carrier Safety Administration (FMCSA). The FMCSA has updated the application process for new brokers that have not been assigned a USDOT number. For new brokers, you’ll need to apply using the <a rel="noreferrer noopener" href="https://portal.fmcsa.dot.gov/UrsRegistrationWizard/" target="_blank">Unified Registration System</a> (URS). Be sure to have the following documents/information ready to submit: </p>
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<ol><li>An EIN (business formation other than Sole Proprietor) or SSN number (Sole Proprietor) </li><li>Information on company officers with titles </li><li>Optionally, a Dun and Bradstreet number. </li></ol>
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<p>Applying does take some time and can be complex, so consider consulting resources provided by the FMCSA.</p>
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<p>There is a $300 application processing fee when submitting an application, and the processing time can range from four to six weeks. Once your application is processed and accepted by the FMCSA, you will need to obtain a Surety bond and a BOC-3 Process Agent to have your authority activated.</p>
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<p>Thankfully, Jet Surety can help you obtain the BMC-84 bond. We offer the best rates and have monthly payment options for this bond. You can apply online <a href="https://jetsurety.com/freight-broker-bond">here</a> or call our freight unit at 855-470-3773.</p>
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<p>After you’ve completed the steps above and secured your surety coverage with Jet, you’re ready to begin growing your business and developing connections with carriers and shippers.</p>
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A Freight Broker's Guide to Success: How to Become a Broker
Step into the dynamic realm of logistics by launching your own freight brokerage! Start your journey and chart your course to success in this thriving industry.
A Freight Broker's Guide to Success: How to Change Your Freight Brokerage Business Name Step by step guide to changing your Freight Brokerage Business name hassle-free. Complete MCSA-5889 form, submit via online, fax, or mail. <!-- wp:paragraph -->
<p>Freight brokers can change the name of their business quite easily. In this guide we’ll walk you through the steps of getting the necessary information submitted to the FMCSA.</p>
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<p>To start you will need to fill out and complete the <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-06/MCSA-5889%20Form.pdf" target="_blank">MCSA-5889 form</a> (Motor Carrier Records Change Form). The MCSA-5889 will change both your DOT and MC legal name. If your business is a corporation or LLC you must register with the state your brokerage is located in and receive your articles of incorporation.</p>
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<p style="font-size:22px"><strong>Step 1: Complete Section A by entering business information and signing</strong></p>
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<figure class="wp-block-image is-style-default"><img src="https://lh7-us.googleusercontent.com/q31-Kjaue2MsYVJ2sCpzHMWmZ2BWOuFDTh8wBALHkBMCWusVcbEEP8lK7oQ904jZOLx09OOA9aH9ep_t50ib6pHjSLkVDXLHXSK8ggwBJNoap6YUY98DIYcGAGEVundTfz28kasriiVJLmRefCELpzY" alt=""/></figure>
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<p><img src="https://lh7-us.googleusercontent.com/_sYy9pMhmaKUZdTKBBwPsYcXO5MsNh_EQC9ogBuGAtXxuLUg2ASXz-OTFR6ue30uMoSJ2tSLXJGYIBuhtu6qbuUN-SnWax2gqmUC6I_N6rbh5lyouIgUUnEbPQYMKTjJn91Gy0shxXT5W2ZFp_lhRC4" width="624" height="477"></p>
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<p style="font-size:22px"><strong>Step 2: Complete Section C</strong></p>
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<p>If your business is not a LLC or INC select the following options and choose whether to pay by credit card or money order or check</p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/Ivtkixm5y4u72XkE8Icfnx9X5fX50X6rjFQ6awriFuwrrkFbz2VH15mr2dkwg4DZqfYYML9AZvJ2xR-vnT-kfi_-Rclh4LX7wbxdwLoYBfdwWZttGVh81VYJIzL74A7jSMOHQHFE8esBjUcy3yK8cqs" alt=""/></figure>
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<p>If your business is a LLC or INC you will need to select the following options and choose which method of payment.</p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/rFI3RtKP9achqRLYfNCNNtNam4YXqKuTxrw1I6CHwLMc-i7Jiz99CQfpUCym2sYyc3LKWs4MnkLH_70LVOvWo065xTKKa0123orTsafg0LE9HBORYIkx6BU5to9zGYliiu6w5wWwwQ5KOYcaaCkJd7M" alt=""/></figure>
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<p style="font-size:22px"><strong>Step 3: Complete Section E</strong></p>
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<p>Fill in relevant information on section E based on which payment option you chose on section C.</p>
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<p>The FMCSA recommends you pay by credit card since it has the least amount of processing time.</p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/DMVjZ26BOv3_BXcFHlDh2MoflYGdQWJeSntjn4GleGCJ8cpZn5IwC1GKZKRexxuTep1eY9-XDuex4lHqyWfUEz0lzg8pyVDp6xikN2LHPRJjL5IPyPSxDy5SvwYcMcKC7Pxaxt5DuhJr0qlmZWH_xgg" alt=""/></figure>
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<p>Note: A completed form will have sections A, C, and E completed and contain the following: Your DOT/MC numbers on each page, contact phone number and email address, current address, current company name, and the new company name</p>
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<p>Once you have completed the MCSA-5889 form and, if applicable, have a copy of the articles of incorporation, you are ready to submit information to the FMCSA.</p>
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<p>The FMCSA has three ways to file this form: online ticket, fax, or mail.</p>
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<p>The quickest method is to submit a ticket through the <a href="https://www.fmcsa.dot.gov/registration/ask-fmcsa" target="_blank" rel="noreferrer noopener">Ask FMCSA portal</a> and pay by credit card.</p>
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<p style="font-size:22px"><strong>Step 1: Go to the <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/ask-fmcsa" target="_blank">Ask FMCSA portal</a></strong></p>
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<p style="font-size:22px"><strong>Step 2: Click on send us a ticket</strong></p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/POdXbAw9QYA_i5qERTgGzal8tC0Vox8v-pwk-HWMeKyBU8kvPHlB36xze8XrMJQUJutiElwSGQvhdF0YAKTc5qwFhQrHZdqvOQXXN5Pb13u-vaw1QAoXouxMrxNTIcugbXd_-1ROY_mMSM1RjwTrn08" alt=""/></figure>
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<p style="font-size:22px"><strong>Step 3: Fill out the Contact FMCSA form</strong></p>
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<p style="font-size:22px"><img width="556" height="525" src="https://lh7-us.googleusercontent.com/bI35-QGbb0tOWbTtb4UugSG9mzSbs4xlQ7T7ozWPtnqF6h2CbuiBa6rOjL8404mMeUXpXdZVGCjZM1xv3YnUxQQ1KvDuh25gyZ0JaRF_jFxp_dJSjVY4xb1lpx3LaKaKP6fYnqPtpEVAA8LWt5EE_94"></p>
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<p style="font-size:22px"><strong>Step 4: Select Operating Authority under Inquiry Type</strong></p>
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<p class="has-medium-font-size"><img width="624" height="181" src="https://lh7-us.googleusercontent.com/k_2P8LjoJreY_xkaVCZS-1chAORzPQj_06Ei9hoLrnx5KFOAT7vydymh1o8Wpu6ODHUDetTk_Mip-s3-EdMTrro4oS5KA2CfbcEETgs8QZ6_PNy7I5ezF0RwSvkr_p-1Vxo4dYDJPafmjr9W4-TuxqM"></p>
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<p style="font-size:22px"><strong>Step 5: Select Change/update my operating authority information (Name/address/phone) under I need to…</strong><img width="624" height="227" src="https://lh7-us.googleusercontent.com/CcbkLM1lRqlA3D-fyckx9kh4z7deAjI2NNLFdQJgzlO4__eZtuIZAr20FGNXiPkLpaMA96GIU3tRi9xB99lV6Y_9dfwvS4IBZ9YlBW0TTvX_P4uFOi_JH5ju-gJZiWnPUTwkg5-6Aod5raPlLsHhju8"></p>
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<p style="font-size:22px"><strong>Step 6 (if applicable): Upload your articles of incorporation</strong></p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/Zix_jN5N4rfQSvV2jSM5ycaQg_00FoS5nG6SBDxX890XIpmK_-6iEmC1qnXjU6-QTggLy6sq6-cl1NBVcZIlkrP0LLIk6_6coul-Tm9wGFqOuqBiwCyoa49dzeefP9mxq53Ommv7nfbLkgeY3kKuqpg" alt=""/></figure>
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<p style="font-size:22px"><strong>Step 7: Find your copy of articles of incorporation</strong><br><img width="624" height="424" src="https://lh7-us.googleusercontent.com/8fyS4GBSMKA2pZV80O0GU6AxnXmaWq1p5vY2gNv0f-mIKh05slXkpqa9R65B9qoesPPjEZYxHBkYYG4IF4926dnrRyZ29ZsqRZ-3sJYaVA1CWDK13Wl-XZRxKFrNKg9R3eoxBbXSs8skWKSBQrMN7PU"></p>
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<p style="font-size:22px"><strong>Step 8: Click continue</strong></p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/xV_0-p9xgnwRlESkFWJEJGRqzST6df9nkCjupQY0IgZBie4Tr_ImCu8q-JxdFHQWHoXxkOZ6s5bfBYIjOKHXyHtE4VK36TyA8UfLvLL5h2r3lDm4kf5M_HcgBtkKTT9Z_L6frIkAe7AJuVItuxuaH-g" alt=""/></figure>
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<p>Note: There will be a confirmation email sent by the FMCSA, if it does not appear in your inbox make sure to check your spam folder.</p>
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<p class="has-medium-font-size"><strong>Submit via Fax</strong></p>
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<p>Fax a complete, printed and signed MCSA-5889 to 202-366-3477. If applicable you will need to include your articles of incorporation with the fax.</p>
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<p>Finally, the slowest option, submission via mail. Decide what payment method works best for you: check, cashier’s check, money order, or credit card.</p>
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<p class="has-medium-font-size"><strong>Pay by check, cashier’s check, or money order:</strong></p>
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<p><strong>Regular mail</strong></p>
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<p>Federal Motor Carrier Safety Administration</p>
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<p>P. O. Box 6200-33</p>
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<p>Portland, OR 97228-620</p>
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<p><strong>Express mail</strong></p>
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<p>U.S. Bank Government Lockbox </p>
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<p>Attn: Federal Motor Carrier Safety Administration 6200-33</p>
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<p>17650 NE Sandy Blvd.</p>
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<p>Portland, OR 97230</p>
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<p>Please note paying by check may delay the processing for 6-8 weeks due to mail delays associated with cashing a check.</p>
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<p class="has-medium-font-size"><strong>Pay by credit card:</strong></p>
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<p>If you wish to pay by credit card; mail your completed MCSA-5889 form and, if applicable, articles of incorporation to</p>
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<p>US Department of Transportation</p>
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<p>Federal Motor Carrier Safety Administration</p>
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<p>Office of Registration and Safety Information (MC-RS)</p>
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<p>Room W65-206</p>
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<p>1200 New Jersey Avenue, S.E.</p>
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<p>Washington, D.C. 20590</p>
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<p>If you are a broker that is in the process of name change it is important to inform your Surety Provider so they may update your freight broker bond with the FMCSA. During a name change process your current bond can be canceled and in order to maintain your authority it will need to be refiled by your Surety Provider.<br>For any unanswered questions or to inquire about getting a BMC-84 bond with Jet Surety please give us a call at (855) 470-3773 or email us at <a href="mailto:freight@jetsurety.com">freight@jetsurety.com</a>.</p>
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A Freight Broker's Guide to Success: How to Change Your Freight Brokerage Business Name
Step by step guide to changing your Freight Brokerage Business name hassle-free. Complete MCSA-5889 form, submit via online, fax, or mail.
A Freight Broker's Guide to Success: How to Develop a Business Plan In this edition of Freight Broker's Guide to Success, unlock your potential with the help of Jet Surety's guide to developing a business plan. <!-- wp:paragraph -->
<p>In the dynamic world of logistics, freight brokers play a crucial role in connecting shippers with carriers to ensure the smooth transportation of goods. To establish a successful freight brokerage business, it is highly recommended to create a comprehensive business plan that serves as a roadmap for growth and sustainability for your business. In this edition of Freight Brokers Guide to Success, we will guide you through the key components of developing a business plan for your freight brokerage.</p>
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<p class="has-medium-font-size"><strong>A.) Executive Summary</strong></p>
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<p>The executive summary is a concise overview of your business plan and should highlight the key elements of your freight brokerage business.</p>
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<ol><li>Include a brief description of your company’s core mission, vision, and values. </li><li>Summarize your business model, target market, and competitive advantage. </li><li>Develop a snapshot of your financial projections, cost structure and funding requirements.</li></ol>
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<p class="has-medium-font-size"><strong>B.) Company Description</strong></p>
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<p>In this section, delve deeper into the specifics of your freight brokerage business.</p>
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<ol><li>Outline the history of your company, its current status, and your future aspirations. </li><li>Discuss your business's legal structure, location, and any strategic partnerships or alliances. </li><li>Clearly articulate the problem your business aims to solve in the freight industry and how your services fill that gap.</li></ol>
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<p class="has-medium-font-size"><strong>C.) Market Analysis</strong></p>
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<p>A thorough market analysis is crucial for understanding the dynamics of the freight brokerage industry. </p>
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<ol><li>Identify your target market, including the types of shippers and carriers you plan to work with. </li><li>Analyze industry trends, market size, and growth potential. </li><li>Assess the strengths and weaknesses of your competitors and highlight the opportunities and threats in the marketplace.</li></ol>
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<p class="has-medium-font-size"><strong>D.) Services and Solutions</strong></p>
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<p class="has-small-font-size">Clearly define the services and solutions your freight brokerage business will offer.</p>
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<ol><li>Detail how you will match shippers with carriers, negotiate rates, pay bills and manage logistics. </li><li>Highlight any value-added services, such as tracking and visibility tools, that will set your business apart from competitors. </li><li>Clearly articulate the benefits your services bring to both shippers and carriers.</li></ol>
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<p class="has-medium-font-size"><strong>E.) Marketing and Sales Strategy</strong></p>
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<p class="has-small-font-size">Attract and retain customers with a robust marketing and sales strategy.</p>
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<ol><li>Outline your target customer acquisition channels, such as digital marketing, industry events, and partnerships. </li><li>Specify your pricing model and outline your sales process. Include lead generation, customer onboarding, and relationship management (consider incorporating a customer relationship management system to streamline your sales efforts).</li></ol>
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<p class="has-medium-font-size"><strong>F.) Operations Plan</strong></p>
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<p class="has-small-font-size">Manage operations with a well thought out strategy.</p>
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<ol><li>Detail the day-to-day operations involved in running your freight brokerage business. </li><li>Define the technology and software you will use to manage shipments, track logistics, and communicate with clients and carriers. </li><li>Discuss your team structure, roles, and responsibilities (include any key performance indicators that will help you measure and optimize your operations).</li></ol>
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<p class="has-medium-font-size"><strong>G.) Financial Projections</strong></p>
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<p class="has-small-font-size">Comprehensive projection to provide financial foresight.</p>
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<ol><li>Provide detailed financial projections for your freight brokerage business (include income statements, balance sheets, and cash flow statements). </li><li>Clearly outline your revenue streams, including commission structures and any additional fees (consider various scenarios and sensitivities to demonstrate the financial viability and resilience of your business).</li></ol>
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<p class="has-medium-font-size"><strong>H.) Risk Management</strong></p>
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<p>A comprehensive risk management plan will instill confidence in investors and stakeholders.</p>
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<ol><li>Identify potential risks and challenges that could impact your freight brokerage business. Examples include non-paying shippers and loads held hostage by carriers.</li><li>Develop strategies to mitigate risks and ensure business continuity. Address any regulatory compliance, insurance requirements, and other legal considerations. </li></ol>
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<p class="has-medium-font-size"><strong>I.) Funding Requirements</strong></p>
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<p>If you require external funding to launch or scale your freight brokerage business, clearly outline your funding requirements.</p>
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<ol><li>Specify how you intend to use the funds, whether for technology investments, marketing efforts, or operational expansion. </li><li>Provide a timeline for when you expect to achieve key milestones and when investors can anticipate a return on their investment.</li></ol>
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<p>Developing a business plan for a freight brokerage business is a critical step towards building a successful and sustainable venture. By carefully considering each section outlined in this guide, you can create a roadmap that not only attracts potential investors but also guides your business towards achieving its goals in the competitive world of logistics. Remember, a well-thought-out business plan is not only a document for external stakeholders but also a tool for internal alignment and strategic decision-making.</p>
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<p><br>Jet’s Freight Team may be able to answer any questions you have about building your freight broker business plan, feel free to call us at (855) 470-3773. If you’ve made it through the above article and are ready to begin your business venture, visit this post <a href="https://jetsurety.com/articles/detail/How-to-Become-Freight-Broker">here</a> to apply to the FMCSA <strong>the right way.</strong> If you’re ready to apply for your BMC-84 bond, click here to <a href="https://jetsurety.com/freight-broker-bond">Get A Quote</a></p>
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A Freight Broker's Guide to Success: How to Develop a Business Plan
In this edition of Freight Broker's Guide to Success, unlock your potential with the help of Jet Surety's guide to developing a business plan.
A Freight Broker's Guide to Success: How to File a Surety Bond Claim Carriers who do not receive payment from freight brokers for contracted services can file a claim upon the broker’s surety bond. Read about filing a claim here. <!-- wp:paragraph -->
<p>Carriers who do not receive payment from freight brokers for contracted services can file a claim upon the broker’s surety bond. Please follow this step-by-step guide to filing a Freight Broker surety bond claim against Lexington National Insurance Company (partnered with Jet Insurance Services). Step One: Find the Appropriate Surety to File a Claim Against</p>
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<p>Use the <a href="https://li-public.fmcsa.dot.gov/LIVIEW/pkg_menu.prc_menu" target="_blank" rel="noreferrer noopener">FMCSA’s public search portal</a> to verify which surety company the surety bond claim needs to be with. From this page, you’ll need to use the drop-down menu from the top-right of the page, and click “Carrier Search”. This is the screen you will see:</p>
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<figure class="wp-block-image"><img src="https://lh7-us.googleusercontent.com/vRjjNBU4NOFj55FGHJY0wdwzWaslXfSGRltnO-h8q2lRrmdRtDxQ1O-28hdSoEkibso6lDaJ15Em-ODQwtMf88_1fQTZsDVdbeJ2MLy11TzbzbZS7Au95wZB--Fxen3MBfz5OGVOym73M_XkRIsrbPo" alt=""/></figure>
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<p>Enter the USDOT, Motor Carrier, or Freight Forwarder number for the broker handling the load. If you do not have that information the business name and state can work. Click “HTML” under the “View Details” on the result that matches the broker you contracted with.</p>
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<p>Select “Active/Pending Insurance” to see the surety company on the active bond. Verify the incident is after the “Effective Date (the incident is the delivery date of the load)”. If the incident was before the “Effective Date”, then select “Insurance History” to find the bond active during that incident.<br><br>Click on the surety (insurance carrier) to get their contact information. If Lexington National Insurance Corporation held the bond when the load was delivered, you can easily submit the claim online with the bond number found on the FMCSA website.</p>
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<h2>Step Two: Submit Your Claim Through the Online Portal</h2>
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<p>With the bond number in hand, you can file a claim on the Lexington National <a href="https://lexingtonnational.com/bmc-84-fmcsa-claims/" target="_blank" rel="noreferrer noopener">BMC - 84 Claim Submission page</a>. Click “File a Claim” and fill out the application completely. There will be an opportunity at the end of the application to attach the following:</p>
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<ul><li>Bill of Lading</li><li>Proof of Delivery (if not clear on Bill of Lading)</li><li>Rate Con</li><li>Contract with Broker</li><li>Invoice to Broker</li></ul>
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<p>The application needs to be filled out completely and accurately. Missing or inaccurate information will delay the time it takes to process the claim and ultimately make payment to the carrier.</p>
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<p>Once the claim is submitted and received by a claims handler, a notice of acknowledgment will be sent. If the handler requests any additional information the claimant must respond promptly and with the information requested. The goal of the handler is to provide an opportunity to find a quick settlement for the carrier and most often this will come directly from the broker.</p>
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<p>For a visual walkthrough of how to file a claim, you can watch this short video:</p>
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<figure class="wp-block-video"><video controls src="https://staging-laravel-media.s3.us-west-1.amazonaws.com/files/shares/Articles/Untitled%20video%20-%20Made%20with%20Clipchamp.mp4"></video></figure>
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<p>If you’d like to read more about claims within the freight industry and the effect they have on businesses, click <a href="https://jetsurety.com/articles/detail/surety-claims-impacts-on-freight-brokers">here</a> to see the next Jet Surety article!</p>
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A Freight Broker's Guide to Success: How to File a Surety Bond Claim
Carriers who do not receive payment from freight brokers for contracted services can file a claim upon the broker’s surety bond. Read about filing a claim here.
A Freight Broker's Guide to Success: How to Reactivate Your Brokerage Authority Regaining brokerage authority is simple with our step-by-step guide. Whether revoked or dismissed, learn how to reactivate your license effortlessly. <!-- wp:paragraph -->
<p>Reinstating your brokerage authority can be a straightforward process. This guide will walk you through the steps to get reactivated, whether your brokerage or freight forwarder authority was activated and has been revoked or your brokerage application was dismissed.</p>
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<p class="has-medium-font-size"><br><strong>REINSTATING YOUR BROKERAGE</strong><br></p>
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<p>Brokers with revoked authority will first need to secure the required surety bond and a BOC-3 designated processing agent. Both of these will need to be posted to your FF/MC before filing a reinstatement form. Jet offers rates for the surety bond starting at $849 or for the low monthly rate of $85; <a href="https://jetsurety.com/freight-broker-bond">apply online today.</a></p>
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<p></p>
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<p>Next, you will need to complete sections A, D and E of the <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-06/MCSA-5889%20Form.pdf" target="_blank">MCSA-5889 form</a>. Section E covers payment for the $80 reinstatement fee. The FMCSA recommends submitting through the <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/ask-fmcsa" target="_blank">Ask Portal</a>, but you can also submit via mail or fax. Be sure to complete all required sections, as an incomplete application will not be processed by the FMCSA.</p>
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<p class="has-medium-font-size"><br><strong>YOUR APPLICATION WAS ACCEPTED, BUT ISSUES REMAIN</strong><br></p>
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<p>Brokers whose applications were accepted, but never secured the required insurance and/or BOC-3 agent can appeal or resubmit their brokerage application. Appeals may be submitted if a dismissal was made in error, typically due to issues with insurance filing. You will need to provide evidence that the required insurance or processing agent was posted before the 90-day deadline. The appeal can be made through the <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/ask-fmcsa" target="_blank">Ask Portal</a>. <br></p>
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<p>Brokers who never obtained required insurance or BOC-3 must completely reapply for authority using the same USDOT and MC/FF number. Unfortunately, this means the $300 filing fee will need to be paid again. It is important to note that resubmission cannot be done through the <a rel="noreferrer noopener" href="https://portal.fmcsa.dot.gov/UrsRegistrationWizard/" target="_blank">Unified Registration System</a> (URS). Instead, brokers will have to complete form <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-08/OP-1%20Form.pdf" target="_blank">OP-1</a> or <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-08/OP-1%28FF%29%20Form.pdf" target="_blank">OP-1</a> (FF) and submit through <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/ask-fmcsa" target="_blank">Ask Portal</a> or by mail.</p>
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A Freight Broker's Guide to Success: How to Reactivate Your Brokerage Authority
Regaining brokerage authority is simple with our step-by-step guide. Whether revoked or dismissed, learn how to reactivate your license effortlessly.
A Freight Broker's Guide to Success: How to Transfer Ownership Learn how to transfer ownership with FMCSA compliance. Follow these steps and prepare necessary documents for seamless transition. <!-- wp:paragraph -->
<p>If you are looking to transfer ownership and notify the proper parties, this blog will outline the process and highlight the necessary documentation you’ll need to comply with FMCSA rules and regulations. </p>
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<p>To notify the Federal Motor Carrier Safety Administration (FMCSA) of an Operating Authority (OA) ownership change, you'll need to follow specific steps outlined by the FMCSA. Here's a detailed guide on how to do it:</p>
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<p>1. <strong>Determine the Need for</strong> <strong>Transfer</strong>: If you are transferring (selling) your OA, you may need to request a Transfer of Operating Authority. This occurs when there's a change in ownership, management, or control of the company, but the company intends to keep its existing Docket number (MC/FF/MX).</p>
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<p>2. <strong>Prepare Transfer Request</strong>: Before sending the request, ensure you have all necessary information ready. The request should include details of both the transferor (seller) and transferee (buyer). Necessary information requested by both parties can be seen below.</p>
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<p class="has-text-align-center"><img width="573" height="245" src="https://lh7-us.googleusercontent.com/UEDcChEciX1qQ9Uau4NTkwxugE3x0AWhYoG_OsoAM-41w9YARMx8lWdKTb8knjzGYhzJGRVdSK1kGCaMH910apEXK5lzZfCPmIURZrhnF5XpIv0TffDfEC5O8HiVRkHZotUNwMOn2GLYs-ipf5TEyDM"></p>
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<p>The transferor must submit a signed <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/form-mcs-150-and-instructions-motor-carrier-identification-report" target="_blank">MCS-150</a> form indicating “out of business” as the reason for filing. If you plan to continue operating in intrastate commerce and/or a private motor carrier, the reason for filing should be “biennial update or change”. The first page of form <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/registration/form-mcs-150-and-instructions-motor-carrier-identification-report" target="_blank">MCS-150</a>, where you must indicate the reason for filing, can be seen below.</p>
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<p class="has-text-align-center"><img width="534" height="688" src="https://lh7-us.googleusercontent.com/Bamvk5UCXtf4pW6_53DTzRgUVtEau9-OusjMKhU5kEnea05MoULUwII_WKsMppGAB8m6xRUV2a1K9ajn1CRgq5p90finCBXuFg2NERj004y43yNIUzCl2HWwDOKVSGpeiBu3Xx8aUM5ZFgqZez0fd1U"></p>
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<p>3. <strong>Submit Transfer Request</strong>: There are a few ways to request a transfer. The best option is to submit a ticket through the <a rel="noreferrer noopener" href="https://ask.fmcsa.dot.gov/app/ticket" target="_blank">FMCSA Support Portal</a>. You must complete the required fields and upload the necessary documents. This is the fastest way to get ownership transferred. </p>
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<p>4. <strong>Submit Additional Documents</strong>: After the transfer request is received, FMCSA will review it and may contact you for any additional information needed. You may be instructed to submit proof of financial responsibility (insurance) and designate a process agent (BOC-3 form)</p>
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<p>5. <strong>Review and Update Information</strong>: Once the transfer request is recorded in FMCSA systems, review the updated OA information on the <a rel="noreferrer noopener" href="https://li-public.fmcsa.dot.gov/LIVIEW/pkg_carrquery.prc_carrlist" target="_blank">FMCSA Licensing & Insurance</a> page. The OA status will be displayed as “Inactive” until the required additional documents are submitted and approved.</p>
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<p>6. <strong>Receive Confirmation and Certificate</strong>: Once the OA is active, you will receive a letter. You can then download a copy of your certificate/permit/license from the FMCSA website, and a physical copy will also be mailed to you.</p>
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<p>It's essential to ensure that all required information is accurately provided and that you follow the correct procedures to avoid delays in processing your ownership change request.</p>
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<p><br>If you have any further questions about transferring ownership, you can visit the FMCSA page <a href="https://www.fmcsa.dot.gov/faq/how-do-i-notify-fmcsa-my-operating-authority-oa-ownership-change" target="_blank" rel="noreferrer noopener">here</a>. If you are assuming ownership, stop by our <a href="https://jetsurety.com/freight-broker-bond">freight page</a> to get a free quote for your required BMC-84 surety bond or give us a call at (855) 470-3773.</p>
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A Freight Broker's Guide to Success: How to Transfer Ownership
Learn how to transfer ownership with FMCSA compliance. Follow these steps and prepare necessary documents for seamless transition.
A Freight Broker’s Guide to Success: How to Cancel Your BMC-84 Bond Jet Surety: Transparent cancellation policy. No exploitation and prorated refunds for voluntary cancellation. <!-- wp:paragraph -->
<p>We understand that sometimes your business venture just doesn’t work out the way you wish it would. Here at Jet, we don’t exploit unearned premiums and upon cancellation, will return any premium not used for your surety bond. Cancelling and renewing your bond with Jet is quite simple and in this article, we will go over the different circumstances in which your bond can be cancelled.</p>
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<p class="has-medium-font-size"><strong>Voluntary Cancellation</strong></p>
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<p>In the case where you cancel your surety bond voluntarily, all you have to do is reach out to our <a href="https://jetsurety.com/freight-broker-bond">freight broker unit</a> and let us know. We will ask for written confirmation so we can properly record the cancellation request.</p>
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<p>If you paid for the annual rate when purchasing your surety bond, we will provide a prorated refund of any unearned premium to the original form of payment. If you chose the monthly option, there is no refund offered. Any premium collected on a monthly payment term is fully earned.</p>
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<p>Renewing your surety bond after a voluntary cancellation will require you to reapply for a new surety bond. The good news is that we already have your information and verified your identity. We will perform our underwriting requirements needed for a new surety bond, send over the new rate and once purchased, file your new bond to the FMCSA.</p>
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<p class="has-medium-font-size"><strong>Involuntary Cancellation (Missed Payment)</strong></p>
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<p>We understand that offering monthly payments provides freight brokers with financial flexibility by not having to pay up to $10,000 up front every year to start or renew their surety bond. With that being said, monthly payments are consistently monitored. If a monthly payment is missed and not resolved within 48 hours, Jet will submit a Notice of Cancellation to the FMCSA to begin the process of revoking a broker’s authority.</p>
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<p>Once this notice is submitted, the freight broker still has the opportunity to reinstate their surety bond with Jet. To do this, the past due amount will need to be paid including the following month’s payment in advance. You will have until the end of your 30-day notice to make these required payments. Once payment is made, Jet will reinstate your surety bond with the FMCSA.</p>
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<p>PLEASE NOTE! Your monthly payments must be made on time because once a notice of cancellation is filed there is no way for us to remove it from your public FMCSA profile. Your freight broker will be assigned a red flag “pending insurance cancellation”. This will remain on the account for 30 days. </p>
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<p>If your surety bond has been inactive long enough for the FMCSA to revoke your authority, then please see our article on <a href="https://jetsurety.com/articles/detail/Reactivate-Brokerage-Authority">how to reactivate your brokerage authority</a>.<br>If you have any questions about cancellations or renewals with Jet Surety, you can email us at <a href="mailto:freight@jetsurety.com">freight@jetsurety.com</a> or call us at <a href="tel:8554703773">855-470-3773</a>.</p>
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A Freight Broker’s Guide to Success: How to Cancel Your BMC-84 Bond
Jet Surety: Transparent cancellation policy. No exploitation and prorated refunds for voluntary cancellation.
A Freight Broker’s Guide to Success: How to File for Voluntary Revocation Guide to Freight Broker Success: Complete FMCSA forms OCE-46 and MCS-150 for voluntary revocation. Submit via support ticket or mail for a positive industry standing. <!-- wp:heading -->
<h2>Step One- Complete the Forms:</h2>
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<p>(A) Complete the FMCSA Form OCE-46. This form identifies the business, requests a change to your authority status and must be notarized or signed in front of an FMCSA employee. </p>
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<p><a href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-12/OCE-46%20Form.pdf" target="_blank" rel="noreferrer noopener">DOWNLOAD OCE-46</a></p>
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<p style="line-height:1.5">(B) Complete the FMCSA Form MCS-150. This form inactivates or updates the status of your USDOT number. </p>
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<p><a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-06/MCS-150%20Form.pdf" target="_blank">DOWNLOAD MCS-150<br></a><a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/2023-06/MCS-150B%20Form.pdf" target="_blank">DOWNLOAD MCS-150B</a> (for Hazmat Carriers Only)</p>
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<p>If you wish to inactivate your USDOT number, make sure that under the section “Reason for Filing”, check the box “Out of Business Notification”. If you intend to strictly update your USDOT to continue operations outside broker authority, select the box “Biennial Update or Changes”.</p>
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<h2>Step Two- Submit the Forms:</h2>
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<p>There are multiple ways to submit these forms, the best way being submitting a ticket to the FMCSA support email. FMCSA lists this as the quickest option to complete the task. </p>
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<p><a rel="noreferrer noopener" href="https://ask.fmcsa.dot.gov/app/ticket" target="_blank">FMCSA Support Ticket </a></p>
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<p>If you are unable to use the online support ticket submission in the link above, you can mail in a physical copy of the forms required to the address below or fax to (202) 366-3477:</p>
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<p>Federal Motor Carrier Safety Administration</p>
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<p>Office of Registration and Safety Information</p>
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<p>1200 New Jersey Ave, SE, Room W65-206</p>
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<p>Washington, D.C. 20590</p>
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<p>You will need to include a copy of the owner’s Drivers License when submitting Form MCS-150 or MCS-150B by using a scanned image of the ID belonging to the owner.</p>
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<p>From the perspective of a surety bond provider, sending this notification to the FMCSA is an important task to complete if you have interest in resuming your freight broker authority in the future without any delays or price increases. If your surety bond is canceled with zero notice provided to the FMCSA, your public profile will automatically show as Involuntary Revocation. A surety bond company can only guess whether the revocation was due to bond claim activity, missed surety bond payment or disciplinary action. It’s best not to leave this up for assumption, which is where Voluntary Revocation comes into play.</p>
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<p>A voluntary revocation shows that the broker exited the industry intentionally and in good standing. This small bit of information can benefit your brokerage if you decide to step back into the industry. With Jet, this kind of initiative can help reduce your rate and qualify you for monthly payments.</p>
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<p>If you have other questions regarding Voluntary Revocation, you can visit the FMCSA portal <a rel="noreferrer noopener" href="https://www.fmcsa.dot.gov/faq/how-do-i-inactivaterevoke-my-operating-authority-registration" target="_blank">here</a>. If you are interested in a surety bond quote, visit Jet’s <a href="https://jetsurety.com/freight-broker-bond">Freight Broker Surety Bond page</a>.</p>
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A Freight Broker’s Guide to Success: How to File for Voluntary Revocation
Guide to Freight Broker Success: Complete FMCSA forms OCE-46 and MCS-150 for voluntary revocation. Submit via support ticket or mail for a positive industry standing.
BMC-84 vs BMC-85 Understand the differences between BMC-84 and BMC-85 to choose the right insurance for FMCSA requirements. Learn which option suits your freight brokerage best. <!-- wp:paragraph -->
<p>“What is the difference between a BMC-84 and a BMC-85?” is a question that is asked quite often by new brokers. Choosing the right type of insurance to meet the FMCSA’s requirements is important and understanding the differences will help you determine what will work best for you. A Freight Broker or Freight Forwarder must meet the set $75,000 limit in order to become authorized. This is achieved through a BMC-84 surety bond or BMC-85 trust fund.</p>
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<p class="has-medium-font-size"><strong>BMC-85 (Trust Fund)</strong></p>
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<ol><li>Issued by a financial institution</li><li>Typically requires full $75,000 limit deposited and funds cannot be accessed</li><li>You’ll need to pay a service fee </li><li>Claims are paid out of trust fund and remittance must be provided to replenish the depleted funds</li></ol>
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<p>Not all financial institutions require the full $75,000 deposited. Instead some offer to fund the trust using Irrevocable Letter of Credit (ILOC) obtained by you or, for a fee, the financial institution itself. This ILOC acts as an “I Owe You” and can prove to be detrimental in the event claims are paid. New FMCSA rules are doing away with this and <a rel="noreferrer noopener" href="https://www.freightcaviar.com/new-fmcsa-freight-broker-rules/" target="_blank">Broker and Freight Forwarder Financial Responsibility</a> will require assets to be “readily available” for BMC-85 bonds.</p>
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<p class="has-medium-font-size"><strong>BMC-84 (Surety Bond)</strong></p>
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<ol><li>A BMC-84 bond is Issued by an insurance company</li><li>Pricing is based on a percentage of the $75,000 bond limit ranging from 1.1% to 12.5%</li><li>Claims are paid out by the insurer and remittance must be provided to satisfy indemnity requirements</li></ol>
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<p>A BMC-84 bond is a great option for new brokers with low working capital since it requires less upfront costs than a BMC-85 trust. Here at <a href="https://jetsurety.com/freight-broker-bond?gad_source=1&gclid=Cj0KCQjwir2xBhC_ARIsAMTXk85jpsK0ytsxPJq-4pq58FLptMpLuJLai3h3oKCstufYybXWQYO9TUcaAp19EALw_wcB">Jet</a>, we recognize capital requirements can make or break a new business. To help alleviate the financial burden FMCSA’s requirements, Jet offers monthly installments, no cancellation fees, and refunds on all unearned premium.</p>
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BMC-84 vs BMC-85
Understand the differences between BMC-84 and BMC-85 to choose the right insurance for FMCSA requirements. Learn which option suits your freight brokerage best.
Check the Fine Print! Surety Providers Deny Any Refund: What Does Jet Do Differently? Jet Surety stands out as the only direct surety provider offering monthly payments, easing the financial load of BMC-84 bonds. We prioritize separating earned and unearned premiums, ensuring fair refunds for our Freight Broker clients. Learn more about our commitment to financial transparency and customer care. <!-- wp:paragraph -->
<p>Jet Surety recognizes the importance of separating earned premium from unearned premium for our Freight Broker customers. Life unexpectedly changes, and we do our best to work with our customers to refund any unearned premium. Jet doubles down on its recognition of unearned premium by remaining the only direct surety provider to offer monthly payments, reducing the initial financial burden of the BMC-84 bond.</p>
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<p class="has-medium-font-size"><strong>Defining Earned Premium</strong></p>
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<p>“Earned premium” refers to the dollar amount that an insurance company has collected for providing coverage for a specific time. Earned premium takes into account the time that has already elapsed within the policy term, unlike written premium which represents the total amount charged for the entire term of an issued policy.</p>
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<p class="has-medium-font-size"><strong>Calculating Unearned Premium</strong></p>
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<p>The calculation of unearned premium involves a time-based assessment plus any losses the insurance company has incurred from the bond. If a policy has been in force for six months out of the standard one-year term, the insurance company would recognize half of the total premium as unearned.</p>
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<p class="has-medium-font-size"><strong>The Jet Surety Difference</strong></p>
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<p>Some surety providers do not discriminate between earned and unearned premium. Jet customers put themselves in a more secure financial position by not risking the forfeiture of their hard-earned money under shady bond agreements with “premium is fully earned upon issuance” whispered in the fine print.</p>
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<p>Recognition of unearned premium helps establish the surety provider’s commitment to its customers and the ongoing provision of their coverage. We strive to treat the financial health of our bonded customers with due respect and guard their pockets from unscrupulous contracts.</p>
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<p>If you are interested in applying with Jet Surety or thinking about starting your own business, give us a call at 855-470-3773 or apply online <a href="https://jetsurety.com/freight-broker-bond">here</a>.</p>
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Check the Fine Print! Surety Providers Deny Any Refund: What Does Jet Do Differently?
Jet Surety stands out as the only direct surety provider offering monthly payments, easing the financial load of BMC-84 bonds. We prioritize separating earned and unearned premiums, ensuring fair refunds for our Freight Broker clients. Learn more about our commitment to financial transparency and customer care.
Fighting Fraud in the Freight Industry: Why Hands-On Verification is Key Fight freight fraud with in-depth verification! Discover why hands-on checks, paired with technology, are key to protecting the freight industry. <!-- wp:paragraph -->
<p>Fraud in the freight industry is a growing concern, with fraudulent activities such as double-brokering, identity theft, and non-compliance disrupting the integrity of the logistics network. While technology and data analytics play a role in fraud detection, they cannot replace the hands-on, in-depth verification processes needed to truly protect carriers, brokers, shippers, and freight forwarders. </p>
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<p>This is where <a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a> and <a href="https://www.freightclub.us/" target="_blank" rel="noreferrer noopener">FreightClub </a>come into play. With our comprehensive suite of tools, we dig deeper into verification, compliance, and fraud prevention in a way that automated platforms alone cannot match.</p>
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<p style="font-size:30px"><strong>Why Technology Alone Isn’t Enough</strong></p>
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<p>The rise of data-driven fraud detection systems has provided valuable insights into freight operations, but they often fall short in addressing the root causes of fraud. Technology, algorithms, and data analytics can identify patterns and flag potential risks, but they don’t ask the critical questions that only industry experts can.</p>
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<p>For example, consider the identity verification process. Automated systems may verify documents and emails, but they often miss the red flags that experienced professionals look for, such as discrepancies in business licenses, suspicious operating addresses, or shared contact information with previously flagged entities. In many cases, it takes a deep, manual investigation to reveal the true intentions behind a carrier’s or broker’s actions.</p>
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<p><a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a> offers a solution that goes beyond data points. Our team leverages facial recognition technology, Secretary of State verifications, and direct analysis of articles of incorporation to confirm the legitimacy of each business we vet. This thorough approach minimizes fraud at its source by stopping bad actors before they can even enter the platform.</p>
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<p style="font-size:30px"><strong>Protecting the Freight Network: FreightValidate.com and FreightClub.us</strong></p>
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<p><a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a> stands out in the market because we combine advanced technology with hands-on verification. We use our knowledge of 49 CFR regulations, MAP-21, and years of experience to guide carriers, brokers, and shippers through compliance requirements, ensuring they stay on the right side of the law.</p>
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<p>Additionally, our partnership with <a href="https://www.freightclub.us/" target="_blank" rel="noreferrer noopener">FreightClub.us</a> allows us to create a community of vetted, trustworthy freight professionals. At <a href="https://www.freightclub.us/" target="_blank" rel="noreferrer noopener">FreightClub</a>, only those verified through <a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a> can join, ensuring that every member adheres to strict compliance and operational standards. This community-driven approach is designed to make the freight market safer and more transparent for everyone involved.</p>
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<p style="font-size:30px"><strong>Current Market Challenges and Solutions</strong></p>
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<p>The freight market is currently facing a range of challenges, from fluctuating demand to increasing regulation. As fraud becomes more sophisticated, relying solely on data-driven solutions will not be enough. Carrier identity verification, compliance monitoring, and thorough investigations into business practices are necessary to protect the integrity of the freight network.</p>
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<p><a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a> addresses these challenges by providing an additional layer of security through direct vetting and ongoing compliance checks. Our goal is to prevent fraud before it occurs by denying access to bad actors, whether they are carriers or brokers. This proactive approach not only safeguards loads but also builds a network of trusted partners.</p>
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<p style="font-size:30px"><strong>Broker Carrier Summit in October: Setting the Agenda for Fraud Prevention</strong></p>
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<p>We are also looking forward to the Broker Carrier Summit in October, where industry leaders will come together to discuss the latest trends, challenges, and solutions in fraud prevention. At this summit, we will dive into the tools, techniques, and best practices needed to tackle fraud at its roots. We invite you to join us and be part of the conversation on how we can shape a safer, more secure freight network for all.</p>
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<p style="font-size:30px"><strong>Final Thoughts</strong></p>
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<p>The freight industry faces an evolving threat landscape when it comes to fraud. While data science and algorithms play a role in risk assessment, they are not the complete answer. Hands-on verification, deep industry knowledge, and proactive compliance measures are what truly make a difference in preventing fraud.</p>
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<p><a rel="noreferrer noopener" href="https://freightvalidate.com/" target="_blank">FreightValidate</a> is committed to being on the front lines of this fight, providing a solution that combines advanced technology with manual oversight to protect brokers, carriers, and shippers. By partnering with <a rel="noreferrer noopener" href="https://www.freightclub.us/" target="_blank">FreightClub</a> and offering exclusive promotions, we are building a stronger, more reliable freight market where trust and compliance come first.</p>
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<p>The battle against fraud requires a unified effort. That’s why we’re excited to offer JET customers an exclusive 10% off by using the promo code JET10 when they sign up for <a rel="noreferrer noopener" href="https://freightvalidate.com/" target="_blank">FreightValidate</a>. This is our way of helping you join the fight against freight fraud while ensuring you get the best value in compliance and verification services.</p>
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Fighting Fraud in the Freight Industry: Why Hands-On Verification is Key
Fight freight fraud with in-depth verification! Discover why hands-on checks, paired with technology, are key to protecting the freight industry.
Freight Broker FAQ: Common New Broker Questions Get answers to common freight broker questions, including Surety Bonds, FMCSA requirements, costs, and steps to start your brokerage. <!-- wp:paragraph -->
<p>With the current height of social media and the many voices projected through it, having access to correct information is an integral factor in your ability to run a successful brokerage. Here at Jet, our Freight Broker Unit is dedicated to keeping you informed to the best of our ability. Listed below are a series of questions and answers we most often receive from inquiring freight brokers.</p>
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<p style="font-size:32px">What is a Surety Bond?</p>
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<p><br><strong>A</strong>: A surety bond is a government-required financial guarantee that the principal of the bond will fulfill the contracted obligation.</p>
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<p>The Federal Motor Carrier Safety Association (FMCSA) requires all new brokers to have a $75,000 (BMC-84/85) Bond. The bond protects carriers from non-payment by brokers. Should the broker decide not to pay, the carrier can submit a claim on the bond for the amount owed in the signed contract.</p>
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<p style="font-size:32px">Do I need the surety bond before I apply to the FMCSA?</p>
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<p><br><strong>A</strong>: Despite the language used on the FMCSA’s homepage, you do not need to purchase the surety bond before applying for your authority. In fact, it is the opposite.</p>
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<p>With the rise in surety prices paired with a $300 FMCSA application fee, many people apply to the FMCSA before realizing they cannot afford the surety bond needed to activate the broker authority. This is why the FMCSA states the bond must be secured before applying. We still suggest you inquire about the surety bond first, this way you can create an accurate budget for your business and know what to expect when purchasing the bond.</p>
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<p style="font-size:32px">How much can I expect to pay for a Freight Broker Surety Bond?</p>
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<p><br><strong>A</strong>: Jet’s prices range from $849 to $9,500 for one year. We understand this is a large sum for starting a new business, which is why we offer a monthly payment plan to reduce the upfront cost.</p>
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<p>Prices can vary depending on the surety provider. The most influential factor when applying to outside carriers is personal credit. At Jet, our advanced underwriting criteria uses many industry factors to help you get the lowest rate possible (and not pay any collateral). Jet remains the only direct provider of surety bonds, cutting out the middleman and passing the savings on to you.</p>
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<p style="font-size:32px">I’m applying for carrier authority with the FMCSA. Do I need a surety bond?</p>
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<p><br><strong>A:</strong> Carriers are only required to have BIPD (Bodily, Injury, Property, Damage) insurance, also known as general liability. If requested by a broker or shipper to become a “bonded carrier”, this would require a <a href="https://jetsurety.com/">Customs Bond</a> and not a Freight Broker Surety Bond.</p>
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<p style="font-size:32px">What do I need to be a Freight Broker?</p>
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<p><br><strong>A</strong>: Three items are needed to become a freight broker: surety bond, BOC-3 filing, MC or FF number</p>
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<p><strong>Freight Broker Surety Bond</strong><br>- Financial guarantee required by the government</p>
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<p><strong>BOC-3 Filing</strong><br>- The broker is required to have a designated person or office that receives legal papers in any state that business is conducted in. A BOC-3 filing, also known as a process agent, satisfies this requirement.</p>
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<p><strong>MC or FF Number</strong><br>- This is assigned by the FMCSA when you apply for your brokerage authority. There are multiple types of broker authority, so make sure you are applying for the correct one.</p>
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<p>If you have a question that was not addressed above, feel free to contact our freight broker unit at (855) 470-3773.</p>
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<p>If you are looking to get pricing for a bond please submit an application <a href="https://jetsurety.com/freight-broker-bond">here</a>.</p>
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Freight Broker FAQ: Common New Broker Questions
Get answers to common freight broker questions, including Surety Bonds, FMCSA requirements, costs, and steps to start your brokerage.
Protecting Your Logistics Business: How to Avoid Fraud and Identity Scams in a Competitive Industry Learn how to protect your logistics business from fraud with essential vetting tips, verification tools, and industry insights to avoid costly identity scams. <!-- wp:paragraph -->
<p>Active businesses in the logistics industry likely have stories about being defrauded. They could also tell you about the serious reputation and financial damage this caused. Despite awareness of fraud in the industry it continues to happen at an alarming rate, an epidemic to the entire United States logistics industry. </p>
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<p>The current over-saturation has caused a “dog fight” mentality between carriers as each load is fought for and jumped on as quickly as possible. This often trumps any proper vetting practices used to verify the freight broker’s legitimacy, causing business identity fraud to run rampant.</p>
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<p>Scammers continue to pose as active freight brokers, slightly altering their contact information, booking the load and disappearing into the night when the time for payment comes. This leaves us with a confused freight broker, an angry carrier, and a scrambling claims department.</p>
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<p>If carriers and freight brokers alike adjust their vetting processes to the current demand of the industry, taking just a few extra minutes, this could save them thousands of dollars and hours of driving time. Employing proper vetting techniques will help discourage scammers from continuing to run what can only be described as an incredibly successful stolen identity scam.</p>
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<p>Jet has prepared a couple of items to check off the list that will help to protect your business and avoid these unfortunate instances.</p>
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<p style="font-size:25px">1. Contact Info Check and Verify Documents</p>
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<p>Check the contact information and documents being used by the broker or carrier. If it does not match the FMCSA and other verification tools, reach out and confirm the contact details and individuals’ employment using the FMCSA’s listed phone number or email address. Document all communication with the business.</p>
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<p style="font-size:25px">2. Verification resources</p>
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<p>It is important to utilize verification tools that will help identify potential fraud. Consider tools such as: <a href="https://freightvalidate.com/" target="_blank" rel="noreferrer noopener">FreightValidate</a>, <a href="https://www.mycarrierportal.com/" target="_blank" rel="noreferrer noopener">MyCarrierPackets</a>, <a href="https://highway.com/" target="_blank" rel="noreferrer noopener">HighWay</a>, <a href="https://www.carrier-ok.com/products/platform" target="_blank" rel="noreferrer noopener">CarrierOK</a>, etc…. There are many products that can offer similar services so take the time to research which ones would work best for your business.</p>
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<p style="font-size:25px">3. Beware load board rates</p>
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<p>If you are booking a load with a rate that seems too good to be true, it may actually be. Take time to look at spot rate trackers, like <a rel="noreferrer noopener" href="https://brokers.greenscreens.ai/" target="_blank">Greenscreen.ai</a>, so you can make informed decisions on the legitimacy of a rate.</p>
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<p style="font-size:25px">4. Joining Communities</p>
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<p>Take advantage of logistics associations, industry contacts, and social media like <a href="https://www.freightclub.us/home" target="_blank" rel="noreferrer noopener">FreightClub</a> and <a href="https://www.freightcaviar.com/" target="_blank" rel="noreferrer noopener">Freight Caviar</a>. Developing connections within the industry can keep you updated on the latest scams or fraudulent businesses and help you avoid potential losses.</p>
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Protecting Your Logistics Business: How to Avoid Fraud and Identity Scams in a Competitive Industry
Learn how to protect your logistics business from fraud with essential vetting tips, verification tools, and industry insights to avoid costly identity scams.
Surety Claims: Impacts on Freight Brokers The BMC-84 Freight Bond serves as a critical tool to protect carriers from non-payment, but when claims arise, the impacts are far-reaching for the broker. <!-- wp:paragraph -->
<p>In the realm of freight brokerage, compliance with the Federal Motor Carrier Safety Administration (FMCSA) rules is not just a compulsory obligation, but a carrier safeguard against potential freight broker financial failure. At the core of the safeguard is the BMC-84 Freight Broker Bond. This bond serves as a critical tool to protect carriers from non-payment, but when claims arise, the impacts are far-reaching for the broker. </p>
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<p>The repercussions of a claim can extend beyond temporary financial strains that a freight broker may face. If claims come from a broker’s cash flow getting tight, that alone may be understandable to a surety. But the risk of claim from complete financial failure or fraudulent activity, including double brokering, and related signs to such incidents cannot be ignored. Bond claims are hints of such risks and the necessary surety reactions can affect the broker’s reputation, future bonding prospects and ability to be licensed.<br><br>Let’s break down three ways bond claim activity will affect a broker.</p>
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<p><strong>1. Reaction From Current Surety Provider:</strong></p>
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<p>When a claim comes in on a bonded principal, surety providers can do one of two things to affect rates or licensing.<br><br>First, frequent claim activity can impact surety rates. Surety companies may charge a higher rate for a bond upon renewal if there is claim activity. Sureties will do so to cover the known risk of costs of handling claims and the potential additional risk of financial failure. An example adjacent to this is when an auto insurance company raises rates on an individual who is in frequent accidents or is busted for speeding one too many times. These instances in the eyes (and the actuarial reports) of the insurance company deem it necessary to charge a higher rate to the insured. Surety is no different.<br><br>Second, and more damaging, is the cancellation of the bond. If a broker racks up too many claims a surety can non-renew the bond or cancel immediately. A non-responsive freight broker will definitely have their bond cancelled immediately. In either case, the surety has deemed the future risk of the broker too great to continue to bond.<br><br>When a notice of cancellation is put in, the freight broker has 30 days to either reinstate the bond with their surety company or replace the bond with another company. A related example of this would be if a driver is convicted of a DUI, some states allow insurance companies to cancel the policy of their principal because their risk to the insurance company has skyrocketed. Similar to a DUI, bond cancellation is seen on a principal’s record.<br></p>
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<p style="line-height:2.5"><img src="https://lh7-us.googleusercontent.com/nH5uTmxwqF41IaA1NycG3CS-i7Ofz4Z0pzISoUcqjpcoI-d07ODwPqgL5SjQSMCrIzenX9slzEDgardsYDoBP6EyRExmd0HfNwz26jcZrrn1oasmpEZSpiYeIURifGMSOKmtP_LROch5zB_7azxGr7U" style="width: 600px;"><br><sub><em>This notice is something freight brokers do not want on their <a href="https://li-public.fmcsa.dot.gov/LIVIEW/pkg_carrquery.prc_carrlist">FMCSA Licensing and Insurance page</a>.</em></sub></p>
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<p><strong>2. Reaction From Other Surety Providers:</strong></p>
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<p>Surety providers take into consideration a broker’s claims history when determining the eligibility and rate of the bond. Insurance history can be a clear indicator if there have been past claims against a surety bond. One of the biggest red flags a surety provider sees is a mid-term cancellation. A mid-term cancellation is when a surety cancels a broker's bond in the middle of the term. These are typically due to claims against the bond wherein the carrier was reimbursed and ultimately the surety.<br><br>It can be difficult to provide sufficient evidence for legitimate reasons behind a mid-term cancellation on a prior bond. The ability to get a surety offer may hinge on that criteria.<br><br>Whether deemed valid by the surety provider, a claim submission can tarnish a broker’s reputation with other concerned parties. Potential carriers and shipping partners can review a broker’s insurance history and use that information to determine if they want to enter into a contract with them. A damaged reputation can lead to reduced revenue and fewer carrier partnerships.</p>
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<p><strong>3. Brokers’ Time and Reputation</strong></p>
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<p>When a claim comes in against a broker’s bond, a lot of effort goes into the processing and defense. Locating old documentation, showing remittance of payments made, or even issuing late payments takes up valuable time. </p>
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<p>If a freight broker has claims piling up, shippers will eventually catch wind of this activity. When they hear about a broker having claims on their bond, they are less likely to use them in the future. </p>
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<p>The carrier that submitted the claim will naturally stop picking up loads for that broker due to the previous experience. They could also complain to other carriers using online forums, sites reporting brokers or just by word of mouth. The damage done to a broker’s reputation due to bond cancellation stemming from multiple claims can derail their business. </p>
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<p>Strict compliance with Federal Motor Carrier Safety Administration (FMCSA) regulations, particularly the BMC-84 bond requirement, is not just a regulatory necessity but a safeguard for carriers and shippers against the financial failure of the freight broker. Partnering with a reliable surety provider, like Jet Insurance Company with a dedicated team to freight brokerages, can significantly alleviate these challenges through a streamlined investigation process, avoid unnecessary bond cancellations and minimize the impact on a broker's reputation. The typical surety company has a generic surety customer service and claims adjusting team. When Jet is notified of a claim, the investigation begins immediately. This ensures our bonded customers stay apprised of carrier claims and from that point on freight brokers get the best legal defense on claims available. Jet knows the law surrounding freight brokers and puts it to the defense against frivolous and even criminal claims against freight brokers so the damages explained above do not fall upon our customers.</p>
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Surety Claims: Impacts on Freight Brokers
The BMC-84 Freight Bond serves as a critical tool to protect carriers from non-payment, but when claims arise, the impacts are far-reaching for the broker.
Thinning the Herd: Underwriting in a Crowded Freight Broker Market An increased number of freight brokers over the last several years has led to some hefty complications for the transportation industry. Read about it here. <!-- wp:paragraph -->
<p>An increased number of freight brokers over the last several years has led to some hefty complications for the transportation industry. For freight brokers specifically, a saturated market leads to increased competition, lowered rates and reduced commissions. While increased competition is generally a feature of a healthy market, allowing too many players on the field has caused serious damage. Carriers, shippers, brokers, regulators and even surety providers have all felt the impact—most notably, from the significant increase in fraudulent activity and double brokering.</p>
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<h2>The Status Quo</h2>
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<p>Your typical surety company is comfortable requiring a simple credit check to provide a bond offer. This may work in most lines of surety, but not in the crucible of freight broker bonds. Credit underwriting allows nearly any applicant through, including those who have knowingly run scams or are ready to try out a freshly stolen identity.</p>
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<p>While this loose and fast underwriting has the short-term benefit of more premium to the surety carrier, gains are short-lived when claims begin to snowball. This bond comes with great risk—not only from payment to claimants but in handling each individual complaint. On average, a typical surety bond experiences a combined loss ratio of 15%. An improperly underwritten freight broker bond can skyrocket to 100% or more.</p>
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<p>It doesn’t take much to deduce that surety carriers are opening the doors wide to unscrupulous freight brokers (or should we say double freight brokers). This adds to the saturated market and leads to lowered rates and less business overall for legitimate freight brokerages. How low can a double broker bid if they never intend to pay the carrier? </p>
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<h2>Jet’s Commitment to High Standards</h2>
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<p>At Jet, we refuse to compromise our underwriting to reap short-term gains. We are committed to strict vetting of freight brokers to protect the integrity of the freight industry. You may be thinking “strict underwriting sounds complicated, is time-consuming and will cost more”. None of that is true with Jet. Thanks to the tools we have available, this process is not only secure but quick and easy. Most importantly, it allows Jet to provide excellent surety bond rates, monthly payment options, and even multi-year terms! The philosophy is simple, if you don’t bond guaranteed claims, you can offer good businesses better rates.</p>
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<div class="wp-block-button"><a class="wp-block-button__link has-white-color has-text-color has-background" href="https://jetsurety.com/bondquote?term=Property+Broker+or+Freight+Forwarder" style="border-radius:3px;background-color:#0abb01" rel="www.google.com">QUOTE</a></div>
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Thinning the Herd: Underwriting in a Crowded Freight Broker Market
An increased number of freight brokers over the last several years has led to some hefty complications for the transportation industry. Read about it here.