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 trucking broker license bond needs. Learn how to get a trucking broker’s license in Texas, below.
What is a Trucking Broker License?
Trucking brokers serve as intermediaries between shippers and trucking companies, negotiating rates and booking loads. They are paid on a commission basis and licensed at the federal level by the Federal Motor Carrier Safety Administration (FMCSA), which is part of the Department of Transportation. The license itself is called a broker authority.
What Are the Steps in the Licensing Process?
Although the broker authority is issued by the federal government, to operate as a trucking broker in Texas, you must also meet all of the state requirements for business ownership. This begins with establishing a business structure (e.g., sole proprietorship, partnership, corporation, etc.) and registering the business entity with the state and/or county.
To obtain your broker authority, you’ll need to register via the Unified Registration System (URS), which involves paying a filing fee (currently $300). URS will assign you an MC number, which you will need to complete the process.
Once you have your MC number, you’ll need to purchase a $75,000 BMC-84 bond, which is the official term for a trucking broker license bond. You’ll also need to designate a process agent in each state where you will operate as a trucking broker.
Why is a Trucking Broker License (BMC-84) Bond Required?
A BMC-84 bond protects the shippers and carriers you work with against your failure to pay the fees you owe them. While you have the option of placing $75,000 into a trust or providing an irrevocable letter or line of credit, most trucking brokers prefer not to tie up their operating cash or their credit. That’s why they choose to purchase a bond instead.
Nonpayment of fees you owe can result in a shipper or carrier filing a claim against your BMC-84 bond.
How Are BMC-84 Bond Claims Paid?
The BMC-84 surety bond agreement is a legally binding contract involving three parties:
- FMCSA is the “obligee” requiring the bond
- The trucking broker is the “principal” purchasing the bond
- The bonding company authorizing the bond is the bond’s “surety”
As the bond’s principal, you are legally obligated to pay all valid claims against the bond.
Upon receipt of a claim, the surety will make sure it is valid and may be able to negotiate a settlement. If there is no settlement, and you don’t pay the claim promptly, the surety will pay it on your behalf. You are then obligated to repay that debt.
How Much Does a BMC-84 Bond Cost?
The annual premium you will pay for a trucking broker license bond is a small percentage of the $75,000 bond amount. What that percentage, the premium rate, will be depends on how risky the surety believes it is to pay claims on your behalf. The best indicator of that risk is your personal credit score.
If your credit score is good, you should qualify for a premium rate in the standard market rate range of 1-3%, making your annual premium somewhere between $750 and $2,250. With lesser credit, your premium rate could be substantially higher.
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