How to Get a Trucking Broker�s License in Georgia

Who Needs a Trucking Broker�s License?

The terms �trucking broker� and �freight broker� are often used interchangeably. They both refer to people who handle the logistical aspects of moving freight from one part of the country to another. Their role is to play �matchmaker� between shippers who have freight and carriers who can move it.

Trucking brokers save shippers money by negotiating shipping fees with reputable, reliable carriers. They also track shipments from one point to the next and keep shippers informed of the status of their freight while it�s in transit.

Trucking brokers are licensed by the federal government, not by individual states. Licenses, which are called operating authorities, are issued by the Federal Motor Carrier Safety Administration (FMCSA). This is the part of the U.S. Department of Transportation (USDOT) that regulates interstate commerce.

What Does the Licensing Process Involve?

To obtain an operating authority to do business as a trucking broker in Georgia, you�ll need to accomplish the following:

1. Create a legal business entity in Georgia. This can be a sole proprietorship, partnership, LLC, or corporation. You’ll need to register your business with the Georgia Department of Revenue.
2. Obtain a (USDOT) numberfrom the U.S. Department of Transportation.
3. Apply to the FMCSA for an operating authority through the Unified Registration System. You’ll need to enter your DOT number to access the system. Be sure to fulfill all of the FMCSA licensing requirements including purchasing a $75,000 freight broker bond, providing proof of the necessary insurance, and paying the license application fee.
4. Designate a process agent. This is the person the court can serve papers to if you are sued in your capacity as a trucking broker.You must have a process agent in every state you do business in. Submit a completed form BOC-3 providing this information to the FMCSA.
5. It takes 4-6 weeks for DOT toapprove and issue a new operating authority.

Why is a Surety Bond Required?

The $75,000 bond, known as a BMC-84 bond, is an alternative to establishing a $75,000 trust fund. Most brokers don�t want to do establish a trust fund because it ties up their cash and/or assets. The bond, however, provides financial protection for shippers and carriers who could suffer a loss if you fail to live up to the terms of a contract with them. The bond is your guarantee to conduct business in a completely lawful and ethical manner.

Understanding How Surety Bonds Work for Trucking Brokers

The surety bond agreement is a legally binding contract involving three parties. The USDOT is the obligee requiring the bond, the trucking broker is the principal required to purchase the bond, and the company that underwrites and issues the bond is the surety. Each party has specific rights and responsibilities.

The obligee has set the required bond amount (also known as the bond�s penal amount) at $75,000 and established the conduct that would be considered a violation. The surety sets the bond�s premium rate for each applicant approved, and investigates any claims to make sure they are valid. The principal bears full legal responsibility for paying claims against the bond.

When a claim is filed and the surety determines that it is valid, often times, the surety will pay it rather than waiting for the principal to do so. This gives the principal a little time to gather the funds to cover the claim. However, the principal is legally required to repay the surety for any such advance payments to claimants.

What Does It Cost?

The principal pays an annual bond premium that is only a small percentage of the bond�s full penal amount, which is the maximum amount that will be paid on a claim. The premium rate is set by the surety based largely on the principal�s personal credit score. Those with excellent credit will typically be assigned a premium rate of no more than 3%, but those with lesser credit will pay a higher rate.

Get Bonded Today

When you�re ready to apply for licensing as a trucking broker in Georgia, contact us or request a quote for the BMC-84 bond you need!