Freight Broker FAQ: Common New Broker Questions

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.

What is a Surety Bond?

A: A surety bond is a government-required financial guarantee that the principal of the bond will fulfill the contracted obligation.

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.

Do I need the surety bond before I apply to the FMCSA?

A: 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.

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.

How much can I expect to pay for a Freight Broker Surety Bond?

A: 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.

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.

I’m applying for carrier authority with the FMCSA. Do I need a surety bond?

A: 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 Customs Bond and not a Freight Broker Surety Bond.

What do I need to be a Freight Broker?

A: Three items are needed to become a freight broker: surety bond, BOC-3 filing, MC or FF number

Freight Broker Surety Bond
- Financial guarantee required by the government

BOC-3 Filing
- 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.

MC or FF Number
- 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.

If you have a question that was not addressed above, feel free to contact our freight broker unit at (855) 470-3773.

If you are looking to get pricing for a bond please submit an application here.