Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your Georgia trucking broker’s license bond needs. Learn how to get a trucker broker’s license in Georgia, below.
What Trucking Broker Licenses Are Issued in Georgia?
Trucking brokers are third-party logistics experts who match shippers that need to move goods with appropriate motor carriers looking for loads to transport.
Trucking brokers are licensed by the federal government, specifically by the Department of Transportation’s Federal Motor Carrier Safety Authority (FMCSA). The state of Georgia doesn’t license trucking brokers. A federal trucking broker license is formally known as a freight broker’s authority.
What Are the Steps in the Licensing Process?
Let’s assume that you’ve been working for a trucking broker for some time, under the broker’s license, and now are launching your own business. You’ll need to get licensed as a trucking broker yourself.
The first step in getting a federal trucking broker’s license, formally called a freight broker’s license, is to register with the Unified Registration System, which involves paying a filing fee (currently $300). There’s a 10-day waiting period, after which you’ll receive an MC number, typically referred to as an MCN.
Your next major step is to purchase a $75,000 BMC-84 bond. Alternatively, you can put up $75,000 in cash or credit, but most brokers don’t want to tie up assets they might need as operating capital. Purchasing a bond requires only an annual premium that’s a small percentage of the $75,000 bond amount.
Once you have your MCN and $75,000 surety bond, you can complete your online application for a trucking broker’s license. As part of that application process, you’ll need to name a process agent for each state that you’ll be operating in.
Why is a BMC-84 Trucking Broker License Bond Required?
The BMC-84 bond is a trucking broker’s guarantee to abide by federal laws governing the freight brokering industry. It ensures that funds will be available to compensate any party financially harmed by the trucking broker’s violation of the terms of the surety bond agreement. For example, failing to pay the fees owed to shippers and motor carriers.
How Are Trucking Broker’s License Bond Claims Paid?
The BMC-84 surety bond agreement forms a legally binding contract between three parties:
- The trucking broker (the bond’s “principal”)
- The FMCSA (the “obligee” requiring the bond)
- The bonding company authorizing the bond (the “surety”)
The agreement makes the principal wholly responsible for paying valid claims against the bond. It also indemnifies the principal and surety against any liability for claims payments.
While the surety bears no legal responsibility for claims, typically, the surety will pay a claim initially on behalf of the principal and then be repaid by the principal. It’s a practice that ensures prompt payment to the claimant and doesn’t require the principal to come up with a potentially large sum of money all at once.
How Much Does a Trucking Broker’s License Bond Cost?
The main factor entering into the surety’s premium rate decision for a given bond applicant is the individual’s personal credit score. That’s the most reliable measure of the principal’s creditworthiness, which is the surety’s main concern in extending credit to the principal by paying claims on the principal’s behalf.
The higher the principal’s credit score, the more favorable the premium rate, which can be as low as one percent for a principal with excellent credit.
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