Freight Broker Authority
A Broker Authority is a license that allows a company to arrange the transportation of cargo belonging to others by using for-hire carriers to provide the actual transportation of the cargo. Once your Authority is applied for, you will be issued an MC Number. DOT Operating Authority will save you time and do all the paperwork concerning your MC Number. Our team is always happy to assist you with the best filing services.
What is a Freight Broker?
A freight broker is the intermediary between a shipper who has goods that have to be shipped and a carrier who has the capacity to move that freight. Freight brokers can run their own business or work for a freight broker company. They are responsible for arranging the transportation and tracking of a load hauled by a freight carrier.
Freight Brokers make it easier for shippers to find quality carriers that are proven to be reliable in hauling a load. Most shippers don’t have the experience or time to determine if a carrier can perform the task.
Types of Brokers
Broker of Property (except Household Goods): An individual or corporation that arranges property transportation (excluding household goods) belonging to others by using an authorized MC (Motor Carrier) and receives payment for it. A broker does not assume responsibility for the property and never takes possession of it.
Broker of Household Goods: An individual or corporation that arranges property transportation (excluding household goods) belonging to others by using an authorized MC (Motor Carrier) and receives payment for it. A Broker does not assume responsibility for the household goods and never possesses those goods. Household goods are personal items and property that will be used in a home. Registration as a household goods broker is required if the motor carrier providing transportation will also provide some of the following: binding and non-binding estimates, inventorying, safe packing and unpacking of individual items, and loading and unloading at personal residences.
Freight Broker Registration
Freight brokers who are registering for the first time can apply for broker authority with DOT Operating Authority via the Unified Registration System (URS). A valid MC Number is needed in this case and after the MC Number has been assigned, to complete the application process, brokers must also take the following steps:
|Brokers of property (new applicants):||Demonstrate Proof of Insurance Coverage (A Surety Bond) or Trust Fund Agreement in the amount of $75,000.|
|Brokers of household goods (new applicants):|
|Existing Brokers or Carriers:||Entities with existing authorities or USDOT Number registrations will be using existing forms to update their authority or to apply for an additional authority.|
|Designation of Process Agent Form|
Types of Authority
There are several types of operating authority. You should carefully choose the types of authority for your business because they impact what kind of insurance you need and how much you must have in coverage.
You can see the list of authority types and their descriptions below.
List of Types of Authority
Motor Carrier of Property (except Household Goods): a for-hire motor carrier that hauls regulated freight, except household goods, for compensation. Motor Carriers of Property must file proof of public liability (bodily injury and property damage – BI &PD) with FMCSA (Federal Motor Carrier Safety Administration). Cargo insurance is not required.
Motor Carrier of Household Goods (Moving Companies): a for-hire motor carrier that hauls only household goods for compensation. The term ‘household goods’ describes personal items used in a home. They also include items transported from a store or factory, if they are brought to be used in a home and shipped at the request of the householder who pays for the delivery. If you are a motor carrier of household goods, you must file proof of both public liability (BI &PD) and cargo insurance with FMCSA to get an authority to operate.
Broker of Property: an individual or company arranging other people’s property transportation (excluding household goods) for compensation by using a motor carrier. As a Broker of Property, you are not responsible for the property and do not take possession of it.
Broker of Household Goods: an individual or company arranging other people’s household goods transportation for compensation by using a motor carrier. As a Broker of Household Goods, you are not responsible for the goods and do not take possession of them.
You are required to register as a Broker of Household Goods if you provide any of the following:
– Estimates (binding and non-binding),
– Packing and unpacking items at personal residences,
– Loading and unloading at personal residences.
US-based Enterprise Carrier of International Cargo: a company that ships international cargo (except for household goods) and has headquarters in the US while being owned by a Mexican citizen or resident. International cargo originates or is destined for a foreign country.
US-based Enterprise Carrier of International Household Goods: a company that ships international household goods and has headquarters in the US while being owned by a Mexican citizen or resident. International household goods originate or are destined for a foreign country. They also include items transported from a store or factory, if they are brought to be used in a home and shipped at the request of the householder who pays for the delivery.
Other authorities include:
– Motor Passenger Carrier
– Freight Forwarder (FF)
– Non-North America–Domiciled Motor Carrier
– Mexican Certificate of Registration for Foreign Motor Carriers and Foreign Motor Private Carriers
– Mexico-based Carrier for Motor Carrier Authority to Operate beyond US Municipalities and Commercial Zones on the US-Mexico Border (MX)
Do I Need an FF Number?
A very common question in the industry is if one needs an FF number. The answer to that question is quite simple. If you are a freight forwarder you need an FF number. Otherwise, you cannot operate without one.
What Is A Freight Forwarder?
A Freight Forwarder is a company that specializes in arranging storage and shipping of merchandise on behalf of its shippers.
A freight forwarder typically provides a full range of services including: tracking inland transportation, preparation of shipping and export documents, warehousing, booking cargo space, negotiating freight charges, freight consolidation, cargo insurance, and filing of insurance claims.
Freight forwarders usually ship under their own bills of lading and their agents or associates at the destination provide document delivery. Basically, a freight forwarder is a company that arranges your importing and exporting of goods.
What Does A Freight Forwarder Do?
Importing and exporting are key components for many lucrative businesses. International shipping could present great business opportunities for you, but may also seem daunting. The process, paperwork, and regulations involved in international trade may seem intimidating. However, you can be a successful international shipper without getting caught up in the logistics of logistics. Which is what a freight forwarder is for, there is a lot that goes into arranging your international shipping. A freight forwarder does not actually move your freight itself. The freight forwarder acts as a middle man between a shipper and various transportation services. These services include ocean shipping on cargo ships, trucking, expedited shipping by air freight, and moving goods by rail.
A freight forwarding service also utilizes established relationships with carriers, from air freighters and trucking companies, to rail freighters and ocean liners. This is in order to negotiate the best possible price to move shippers’ goods along the most economical route by working out various bids and choosing the one that best balances speed, cost, and reliability. Freight forwarders handle the considerable logistics of shipping goods from one international destination to another, a task that would otherwise be a formidable burden for their client.
To comply with export documentation and shipping requirements, many exporters utilize a freight forwarder to act as their shipping agent. The forwarder advises and assists clients on how to move goods most efficiently from one place to another. A forwarder’s extensive knowledge of documentation requirements, regulations, transportation costs and banking practices can ease the exporting process for many companies.
For more information, contact us today. We will be happy to assist you!
To learn more about the various types of Interstate Authority, watch the video below.