A BMC-84 surety bond is required of freight brokers and freight forwarders to help ensure payment to motor carriers in the event your business fails to comply with the items listed in your contract. A freight broker is an intermediary between a shipper and a freight service provider. They do not own any trucks or trailers, but they use their network of carriers to find the best possible transportation solution for their customers. Freight brokers typically charge a commission for their services, which is a percentage of the freight cost. The bond is required by the Federal Motor Carrier Safety Administration. Both freight brokers and freight forwarders are required to provide the BMC-84 surety bond.
The bond is in place to protect the public—it is not insurance. If a claim is filed on the bond, you will be expected to address the claim. If the surety company has to pay on the bond, it will seek reimbursement from the bond holder.
BMC-84 surety bond guarantees that a freight broker will:
- Pay the carrier for the transportation of goods.
- Reimburse the shipper for any losses due to damage to the goods.
- Return the goods to the shipper if they are not delivered on time or in good condition.
- Comply with all applicable laws and regulations.
How to Become a Freight Broker
Freight broker training courses can be valuable to people interested in pursuing this career. The course can help potential freight brokers learn about contract negotiations and sales techniques. Many courses will include training on marketing methods and calculating freight rates. One also can learn about broker specific software, dispatching and tracking loads, factoring, and finding the proper freight and trucks. Some schools offer a week-long course in freight broker training and other schools offer training courses online. Here are the steps on how to become a freight broker:
- Meet the education and experience requirements. There are no formal education requirements to become a freight broker, but many employers prefer candidates with a high school diploma or equivalent. Some employers may also prefer candidates with a degree in logistics or supply chain management.
- Get the necessary licenses and permits. To operate as a freight broker in the United States, you must obtain a license from the Federal Motor Carrier Safety Administration (FMCSA).
- You must obtain a $75,000 surety bond, which is a guarantee that you will pay any claims that are filed against you.
- Get training. There are many freight broker training programs available. These programs can teach you the basics of the freight industry, including how to find carriers, negotiate rates, and track shipments.
- Get experience. The best way to get experience as a freight broker is to work for a brokerage company. This will give you the opportunity to learn the ropes and develop your skills.
- Start your own business. Once you have the necessary experience and training, you can start your own freight brokerage business.
Click Here to see the Freight Broker Registration Overview From the FMCSA
How to Obtain a BMC-84 Surety Bond
The underwriting is largely based on personal credit. To obtain the lowest possible rate, business and personal financial statements will be required. The cost of a BMC-84 surety bond. The cost will vary depending on the surety company and the applicant’s credit score. To obtain the lowest possible rate, you must have excellent credit and meet other underwriting criteria. For as slightly higher premium, the bond can be obtained without submitting financial statements. Even with less than perfect credit and no financial disclosure, Surety1 can get a quote. We can obtain a quote for you before you get your MC number; however, we must receive your MC number before the bond can be issued as this bond is filed electronically.
At Surety1.com we make it easy to obtain this surety bond. Our simple, three step process is:
- Complete the easy to navigate and secure online application. 1
- Review the free, no obligation quote from one of Surety1’s professional surety bond agents, usually within one business day.
- Sign some paperwork and pay the bond premium
Once these steps have been completed, the BMC-84 Surety Bond will be filed electronically.
1-The name of the applicant on the surety bond application must match exactly the full legal business name of applicant for the license.
Surety1.com is a service of AssuredPartners one of the largest and fastest growing insurance agencies in the nation. Representing over a dozen surety bond companies, Surety1.com is the premier online provider of surety bonds nationwide since 2003. Surety1.com has access to the BEST markets available so we’re able to get you a firm quote no matter your situation and maintains an A+ rating from the Better Business Bureau.