Is Your Freight Broker Legit?

Thousands of licensed freight brokers operate in the United States today, and more enter the market every year. With all this competition, it is critical to vet each freight broker you plan to work with. These simple steps will keep your supply chain moving forward efficiently, without harming the bottom line of your business or the customers you serve.

1. Check for freight broker registration. All freight brokers are required to register and hold a license with the Federal Motor Carrier Safety Administration (FMCSA). This organization allows individuals to search online for freight brokers and their respective licenses. Not only does this tool allow you to quickly see if a specific broker holds a valid license, but it also provides information on if a license has ever been revoked, if and when it was reinstated, and how often that has taken place.

As an added precaution, take time to request a copy of the broker’s license and credentials, and compare these details to what the database lists. If there are any discrepancies, get clarification from the broker, then proceed with caution.

You may also want to check that your broker is registered with the Unified Carrier Registration Program (UCR). This federal program is administered by each state, and brokers and carriers are required to register so that fees can be collected based on the number of vehicles in each fleet. If brokers are not in compliance with UCR registration, they may be subject to legal action against them.

2. Is your broker insured and bonded? While insurance is not always a legal requirement, all freight brokers are mandated to hold a freight broker bond in order to operate legally. The FMCSA put this requirement in place to ensure freight brokers handle business in a safe and lawful way.

A minimum $75,000 bond requirement is needed as part of the broker license process. The FMCSA website also lists detailed bond information for each freight broker registered, but be sure to check that the certificate provided directly from the broker matches what the site states.

3. Track your brokers’ success. If you have been in transportation and logistics for some time, tracking the success of one freight broker over another can quickly become burdensome. Take the time to monitor the brokerage partnerships you have had in the past. Keep notes on the cost, the brokers’ approach to managing workloads, and how often they meet deadlines. This information is simple to track over time, and can make all the difference in selecting the right freight broker for the next job.

Update your database regularly, and highlight the companies or individuals you prefer to work with moving forward.