If you’re thinking of obtaining your freight broker license, there’s no better state to do business than California. With an economy larger than most countries, the state always stays busy in terms of shipping and freight.
Like it is all over America, the process of obtaining your California freight broker license can seem complicated. In addition to the legally-required freight broker bond, you’re bound to other requirements to stay in business, as well. We’ve broken down the freight broker license requirements, step by step, to guide you along the way:
STEP #1: Get Your USDOT Number
Before you get started, it’s best to have an ID number from the US Department of Transportation. This number is required in some application materials. What’s more, attaching your USDOT ID number to all of your paperwork can greatly streamline the process.
STEP #2: Apply With The FMCSA
Unlike many business owners, freight brokers are regulated primarily at the federal – rather than state – level. This means you’ll be dealing with the Federal Motor Carrier Safety Administration first and foremost.
Your first step is the fill out the FMCSA’s application for motor property carrier and broker authority (also known as the OP-1 Form). After submitting the form, and paying the $300 application fee, the FMCSA can issue your Motor Carrier Number (MC). To speed up the application processing, apply online rather than by mail.
Once you receive this number, you’ll be subjected to a 10-day protest period, during which a company can file a protest to your application. The protest period can be nerve-wracking, but it doesn’t halt the application process. You can continue with the other steps, and, if you have good relationships and adhere to good business practices in the world of shipping and freight, you shouldn’t have anything to worry about.
STEP #3: Get Your Freight Broker Bond
In order to legally operate as a California freight broker, you’ll need a freight broker bond. The surety bond does not act as your personal insurance. Rather, the bond is in place to protect any carriers you work with, should you fail to pay them. This surety bond fulfills the FMCSA’s registration requirements according to Form BMC-84.
The minimum bond requirement for freight brokers is currently $75,000. Your freight broker bond cost, however, will only be a small fraction of that amount, depending on your credit score and personal history. Generally, the bond premium is between 1%-7.5% of the total bond amount, for freight brokers with good credit and a clean bill of financial health. The final bond premium can vary a lot. To get an exact quote, you can always fill in our free, no-obligation online application form.