New Freight Broker Bond Requirements - A freight broker bond is required for most freight forwarders. The Freight Carrier Safety Administration (FMCSA) requires that Title 49 U.S.C. Consignors and brokers seeking license under 13904, to purchase a $75,000 bond before you receive your license. These bonds are often called ICC broker bonds or BMC 84 bonds. More information is available on the FMCSA website here.
The BMC-84 bond ensures that the freight broker or freight forwarder will pay all shippers and truckers contracted by the freight broker or freight forwarder. The specific language of the BMC-84 bond reads:
New Freight Broker Bond Requirements
"A condition of this liability is that if the client pays or causes to be paid to the motor carriers or motor shippers any amount or sums for which the client may be legally liable by reason of failure to faithfully perform the client's obligations, and when this bond is issued to the principal Carry out all contracts, agreements and arrangements entered into by the client while in force for the provision of carriage subject to the ICC Cessation Act 1995 under the licence.'
What Is An Sddc Bond?
A freight broker bond ensures that the broker will comply with FMCSA rules and regulations and make timely payments.
The subscriber to the bond is the freight broker or freight forwarder who promises to comply with the terms and make payments. The United States Department of Transportation's Federal Motor Carrier Safety Administration is mandated. A guarantor is a bond company that guarantees the obligations of a freight broker or freight forwarder.
The price you pay for a freight broker bond depends on your personal credit and net worth. Typically, this percentage is between one and twelve percent of the bond amount ($75,000). The stronger the financial strength and credit of the individual or company, the lower the rate. Most people can expect to pay between $1,000 and $1,500 per year. However, we have prices as low as $750 per year. MG Surety works with over 25 bond companies to get you the best rate for your situation.
If you plan to start a new trucking brokerage business, you must register with the FMCSA to obtain a trucking brokerage authorization. Before you get started, make sure you have a solid business plan.
Federal Motor Carrier Safety Administration Bmc 84 Freight Forwarder (icc Broker) Bond
After registration, obtain a Freight Broker Bond (BMC-84) from a bonding company and make sure the bond is filed with FMCSA. This is usually done electronically after approval and payment to the warranty company. However, you can get a copy of the bond form here. MG Surety Bonds works with a number of companies that can approve based on a credit check only. You will need to provide the company name, address and federal tax number along with the MC number. Ownership information, Social Security number and spouse's name will also be required. All bond companies will also require a signed indemnity agreement. For businesses that may not qualify for the credit alone, other options are available by providing:
You can buy this BMC-84 bond instantly by clicking the button below and get your bond within minutes.
Hard times are upon us all. MG Surety Bonds can work with freight forwarders and freight brokers of all types of credit to obtain bonds. Additional insurance items may be required in certain circumstances. Applicants in these situations should expect to pay a higher rate to obtain a bond, but we have bonding companies that will work with you. In many cases we can offer financing to facilitate bond premiums. Remember it's not forever. As you improve your credit and build a good score with the bond company, your rates and terms should improve as well.
Each of these offers advantages and disadvantages depending on your specific brokerage needs. Many freight brokers and freight forwarders choose BMC-84 because it does not typically involve money or credit. Most freight brokers and freight forwarders can obtain these bonds without providing security such as irrevocable letters of credit.
Steps To Get A Freight Broker License
On the other hand, BMC-85 requires that the entire $75,000 be deposited into the trust. This is money that the broker or freight forwarder cannot use for other business purposes. Benefits may or may not be costs. However, there are still annual maintenance costs for companies managing these funds and these should be carefully evaluated.
BMC-84 (Freight Broker) Bond is not an insurance policy. These bonds are written on an indemnity basis. This means that if a claim is made against the bond, the surety will investigate the claim. Generally, the guarantor has 30 days to investigate the claim and provide a written reason for payment or denial of the claim. If the claim is found to be valid and the surety pays the claim, he can seek reimbursement from the freight forwarder or freight forwarders along with other damages. This is an important distinction that freight brokers should take seriously. Claims should be avoided at all costs. Additionally, claims will make maintaining the connection very difficult and expensive. Freight brokers and freight forwarders with a bad credit history may be forced to post collateral to obtain BMC-84 and other bonds in the future.
A freight broker's bond may be canceled by the customer and the surety at any time by written notice to the Federal Motor Carrier Safety Administration. Form BMC-36 must be completed and sent to the FMCSA office in Washington, D.C. Cancellation becomes effective only after 30 days of receipt of BMC-36 form. Both the surety and the freight broker or freight forwarder remain liable for any claim arising during the validity period of the BMC-84 bond, including the 30-day period of cancellation.
There are many companies online that market this type of freight broker bond, but they do not understand surety bonds. Worse, they may sell you a fraudulent bond and you end up paying twice. You can learn more about bond checks here. Make sure you work with a reputable bail bond broker.
Your 2018 Freight Broker Bond Renewal Guide
At MG Surety, we are surety bond experts and want to be your broker for life! Contact us today. You can also visit our Surety Bond FAQ page for educational resources. Freight broker bond costs start at $938 for the required 1-year FMCSA period. Rates for BMC 84 surety bonds vary by country and individual investor. Your freight broker bond fee will be a percentage of the $75,000 bond amount determined by the insurance company.
Established freight brokers or freight forwarders may be eligible for lower rates if they have previously worked in the freight forwarding industry.
You can apply for a freight broker or freight forwarder bond online 24/7 through our secure application portal. If you are starting a new freight brokerage without any specific company information, you can enter your personal information to receive a free quote. If you need a bond for an existing business, you will provide business information and the 6- to 8-digit motor carrier (MC) number that is currently filed with FMCSA.
Makes the gluing process as quick, easy and cheap as possible. Our industry-leading technology and responsive customer service team allow us to provide free quotes and electronically file BMC-84 surety bonds directly with FMCSA faster than any other surety bond provider. Once your payment is processed, your freight broker bond will be electronically filed directly with FMCSA on your behalf.
Train Online To Become A Freight Broker In 2021: Professional Development: Indiana University South Bend
If you have any questions about the BMC-84 Freight Forwarder or Freight Forwarder FMCSA Bond or your application, please call 1 (800) 308-4358 to speak with one of our friendly bond specialists. We're here to guide you through the broker bond process so you can get back to running your business.
Title 49, U.S.C. 13904 requires all freight brokers and freight forwarders to file a Surety Bond (BMC-84) or Trust Fund Agreement (BMC-85). Freight broker bonds are also known as BMC 84 bonds or ICC broker bonds. The BMC 84 surety bond ensures that licensed freight forwarders and freight forwarders comply with all applicable laws and regulations.
A freight broker license is valid for 1 year from the date of filing the bond. If the broker or surety company wants to cancel the bond, the surety company must give FMCSA a 30-day notice of cancellation.
Watch the video below for more information on FMCSA's $75,000 bond licensing requirement for freight brokers and freight forwarders.
What Does A Freight Broker Do?
The Federal Motor Carrier Safety Administration (FMCSA) regulates freight brokers and freight forwarders in the shipping and trucking industry. As part of the Freight Forwarding Authority registration, freight brokers and freight forwarders must post a $75,000 bond to register with the FMCSA before beginning business and arranging for the transportation of goods.
The BMC 84 bond amounts to $75,000, which freight brokers and freight forwarders must post before they are authorized to operate. Federal Motor Carrier Safety Administration
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