Obtaining a Freight Broker License in Mississippi

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Obtaining a Freight Broker License in Mississippi

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 Mississippi BMC-84 bond needs.

Who Needs a Freight Broker License?

Every freight broker must have an “operating authority” from the Federal Motor Carrier Safety Administration (FMCSA) to work as a freight broker or open a freight brokerage. 

What Are the Steps in the Licensing Process?

FMCSA refers to its process as registration rather than licensing. The process is executed online, through the Unified Registration System (URS) once the applicant has accomplished some preliminary tasks, such as:

  • Choosing an appropriate legal structure and establishing a legal business entity, which is a prerequisite for launching a freight brokerage firm.
  • Register the business with the Mississippi Secretary of State and the Internal Revenue Service.
  • Decide whether you are seeking a freight broker authority as a “Broker of Household Goods,” as a “Broker of Property (except Household Goods),” or as both.  
  • You must designate a process agent in every state where you will have an office or write contracts. Alternatively, you can choose an FMCSA-approved blanket process agent company that maintains agents in all states. Either you or a blanket process agent must complete a single Form BOC-3 (Designation of Process Agents) listing all process agents representing you, and file it with FMCSA. 
  • Purchase a $75,000 BMC-84 freight broker bond with FMCSA as the bond’s “obligee” or provide FMCSA with a BMC-85 Trust Fund Agreement. 

When all of the above has been accomplished, create an account on URS, the Unified Registration System, submit your application, and pay the registration fee of $300. You’ll receive your MCN automatically at the end of the session, and in about 10 business days, your operating authority documents should arrive in view U.S. mail. 

Why Is a Freight Broker Surety Bond Required?

The intent of the bonding requirement is to provide financial protection for the state of Mississippi and the shippers and carriers doing business with a freight broker. The bond is a guarantee by a freight broker (the bond’s “principal”) to abide by all applicable FMCSA regulations. In the event of a violation, the principal is legally obligated to pay damage claims for losses stemming from that violation.

How Are Freight Broker Bond Claims Paid?

The third party to a BMC-84 bond, which is a legally binding contract, is the bond’s guarantor, known as the “surety.” The terms of the surety bond agreement legally obligate the principal to pay all claims that the surety has investigated and declared legitimate. Nevertheless, having guaranteed the payment of claims, the surety normally pays a claim initially, to be reimbursed by the principal at a later date. If that doesn’t happen, the surety has the right to take legal action against the principal to recover the claim amount.

What Do They Cost?

The factor determining how much someone will pay as the annual premium for a BMC-84 freight broker bond is the premium rate, which is established by the surety through an underwriting process. The main concern is the risk that paying claims on the principal’s behalf could entail, specifically the risk of not being repaid by the principal. 

The primary measure of that risk is the principal’s personal credit score. A high credit score means the principal has a history of using credit responsibly and paying bills on time, which makes the risk to the surety low. Low risk translates into a low premium rate. Conversely, a low credit score is indicative of higher risk and results in a higher premium rate. The average premium rate for bond applicants with good credit is in the range of one to four percent.

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Our surety bond professionals will get you the Mississippi freight broker license bond you need at a competitive rate.