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focus-area/transportation/operating-authority
559965111
['Operating Authority']

Operating authority is a form of “business license” for for-hire motor carriers and is required in addition to vehicle licensing, fuel tax, and U.S. DOT safety requirements. Operating authority rules exists at the federal, state, Canadian, and Mexico-based levels. There is a different process for gaining operating authority for new entities and existing entities. Operating authority requirements are provided for property carriers, passenger carriers, brokers, and freight forwarders.

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Operating authority

Federal and state governments have a responsibility to ensure the smooth and efficient transportation of persons and property in U.S. commerce and to provide a level of public protection from damage that may result from this transportation.

Operating authority is a form of “business license” for for-hire motor carriers, and is required in addition to vehicle licensing (International Registration Plan [IRP]), fuel tax (International Fuel Tax Agreement [IFTA]), and U.S. Department of Transportation (USDOT) safety requirements.

Who must have authority?

  • Additional rules and registrations with federal and state regulators are necessary for entities offering for-hire services.

Entities that charge a direct or indirect fee for transportation or transportation-related services have other rules to follow in addition to safety rules.

These for-hire services require additional registrations with federal and state regulators.

Federal

  • The FMCSA regulates federal for-hire operating authority, which is a requirement along with the USDOT number.

Federal for-hire operating authority is regulated by the Federal Motor Carrier Safety Administration (FMCSA). This authority is required in addition to and separate from a USDOT number.

For-hire authority is issued after the entity submits an authority application, provides proof of financial responsibility, and provides a list of agents that can accept legal paperwork on behalf of the motor carrier in each state in which the carrier operates.

A company may need multiple for-hire authorities for its operations. Each type of authority will indicate the type of operations an entity can run and the cargo it may carry.

Interstate for-hire motor carriers are issued a motor carrier (MC) number. The MC number is issued with interstate operating authority and is necessary before conducting interstate for-hire motor carriage. The MC number is no longer displayed on the vehicle. According to 49 CFR 390.21, carriers must have, or obtain and display on the vehicle, a USDOT number and their legal company name before beginning operations.

Eventually, the FMCSA will no longer issue MC numbers. The USDOT number will be the carrier’s sole identifier. The effective date for this change will be determined by the FMCSA later.

State

  • Authority at the state level is essential for certain kinds of carrier movements.

State authority is separate from and in addition to federal authority. State authority is required when a movement is intrastate in nature. Most states require authority for movements within the state that are considered for-hire. States may also require registration for private and exempt commodity carriers.

Canada

  • Canada’s operating authority process varies greatly from the U.S. process.
  • Transport Canada, the federal transportation agency in that nation, has assigned its authority to Canadian jurisdictions as part of deregulation at the provincial level.

Operating authority in Canada is obtained through a process much different than that in the United States. In the United States, a carrier wishing to obtain federal operating authority applies to the U.S. Department of Transportation, a federal entity.

In Canada, however, the federal transportation agency, Transport Canada, does not issue a federal operating authority. Transport Canada has delegated its authority to the Canadian jurisdictions through the Motor Vehicle Transport Act and the Motor Carrier Safety Fitness Certificate Regulations. All provinces have deregulated private and for-hire property-carrying motor carriers regarding operating authority. Instead, a carrier must obtain a “safety fitness certificate” from the base jurisdiction as the “authority” to operate on Canadian roads. Safety fitness certificate requirements apply to:

  • Trucks, tractors, or trailers, or any combination of these vehicles, that have a registered gross vehicle weight exceeding 4,500 kilograms; or
  • Buses that are designed, constructed, and used for transportation of passengers and that have a designated seating capacity of more than 10 persons, including the driver, if they are operated for purposes other than personal use.

The safety fitness certificate allows a jurisdiction to track the safety performance of carriers on Canadian roads. With this certificate from the base province, an interprovincial carrier can operate throughout Canada. The absence of operating authority within the provinces (for private and for-hire property-carrying operators) does not absolve a carrier from complying with other requirements such as the International Registration Plan (IRP), the International Fuel Tax Agreement (IFTA), or other provincial requirements, as applicable.

Mexico-based

  • Motor carriers based in Mexico desiring to transport beyond the U.S.-Mexico border area must observe a specific authorization process.

A Mexico-domiciled motor carrier seeking to provide transportation of property or passengers in interstate commerce between Mexico and points in the United States beyond the municipalities and commercial zones along the United States-Mexico international border must pass the pre-authorization safety audit and obtain “MX” authority.

What regulations apply?

  • Entities seeking to obtain for-hire authority in their operations must adhere to a certain set of rules.

Laws and regulations governing for-hire authority and operations include:

What definitions apply?

  • The process of acquiring for-hire authority includes being familiar with specific terms and their meanings.

Definitions governing for-hire authority and operations include:

  • Exempt for-hire
    An entity or person transporting exempt (unregulated) property owned by others for compensation. Exempt commodities usually include unprocessed or unmanufactured goods, fruits and vegetables, and other items of little or no value.
  • For-hire carrier
    A carrier that transports passengers, regulated property, or household goods owned by others for compensation
  • Private carrier
    A carrier that transports its own cargo, usually as a part of a business that produces, uses, sells, and/or buys the cargo being hauled

Who needs to participate in UCR?

  • Requirements of the UCR process pertain to various for-hire carriers and are separate from IRP and IFTA reporting criteria.

For-hire carriers of passengers, private and for-hire carriers of property (including those operating as “exempt” carriers), freight forwarders, leasing companies, and brokers are all subject to Unified Carrier Registration (UCR) requirements annually.

Carriers that are based in non-participating states, or that operate wholly in non-participating states are subject to UCR . Canada- and Mexico-domiciled carriers operating in the United States are also subject to UCR.

The registration does not issue a paper credential to be carried in the vehicle. Proof of UCR is available to roadside enforcement via Federal Motor Carrier Safety Administration (FMCSA) electronic information systems by accessing the carrier U.S. Department of Transportation (USDOT) number.

UCR does not replace or change requirements for registration of vehicles under the International Registration Plan (IRP) or fuel use tax reporting under the International Fuel Tax Agreement (IFTA).

Electronic registration and information are available at plan.ucr.gov.

What is the process to obtain authority?

  • Operating authority for carriers conducting for-hire operations can be achieved by an online registration process, which varies for entry-level and existing carriers.

For-hire carriers can acquire operating authority by a specific online registration process. For carriers just beginning operations, this involves submitting application Form MCSA-1 to the Federal Motor Carrier Safety Administration (FMCSA), along with an application fee, proof of required insurance, and a Designation of Process Agents (BOC-3). Carriers already registered with the FMCSA must submit Form OP-1.

New entities

  • Entry-level applicants seeking for-hire carrier authority are required to provide specific information and pay an application fee.

Before beginning operations, a new entrant for-hire carrier must submit an online registration application (MCSA-1) form to the Federal Motor Carrier Safety Administration (FMCSA) with a $300 fee for each application, file proof of required insurance, and submit a Designation of Process Agents (BOC-3). The MCSA-1 also serves as the application for a U.S. Department of Transportation (USDOT) number. When all fees and documents have been received and found to be in order by the FMCSA, the USDOT number becomes active and authority to operate is granted.

When applying for operating authority, carriers must indicate whether they will be transporting household goods, general freight, passengers, or hazardous materials. Regulations for insurance, tariffs, etc. vary for different carrier types.

At a later date determined by the FMCSA, a $300 fee will also apply to obtain the “safety registration.” This new provision was part of the FMCSA’s Unified Registration System (URS-1) rule; however, the URS-1 rule has been delayed indefinitely by the FMCSA.

Existing entities

  • Carriers that previously registered with the FMCSA acquire new authority via Form OP-1.

Carriers that already are registered with the Federal Motor Carrier Safety Administration (FMCSA) request new authority via Form OP-1. While most entities request authority using OP-1, freight forwarder applications are made on OP-1 (FF), passenger for-hire authority is applied for using OP-1 (P), and Mexico-based carriers use OP-1 (MX).

What types of authority are required?

  • Various types of authority apply to carriers that transport property or passengers for compensation, along with brokers and freight forwarders.

Carriers that transport property or passengers for compensation must acquire a certain type of for-hire authority from the Federal Motor Carrier Safety Administration (FMCSA), which includes financial responsibility requirements. Brokers and freight forwarders also must register with the FMCSA, as well as maintaining financial responsibility and observing regulations for each type of authority.

Property

  • Property-carrying for-hire authority is essential for carriers transporting the property of other entities.

Carriers that transport property owned by others for compensation must obtain property-carrying for-hire authority. The Federal Motor Carrier Safety Administration (FMCSA) no longer makes a distinction between common property carriers and contract property carriers.

Required financial responsibility

  • Financial responsibility consists of insurance coverage that must be supplied by for-hire property carriers, including PLPD and BIPD coverage.
  • Form MCS-90 offers proof that property carriers have complied with the FMCSA-required minimum levels of financial responsibility.

For-hire property carriers are required to maintain financial responsibility ranging from $750,000 to $5,000,000 depending on the cargo carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before being granted the authority to operate. This coverage, commonly known as “public liability and property damage” (PL PD) insurance or “bodily injury and property damage”(BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire and private carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90 is an endorsement issued to a motor carrier of property by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90 is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90 endorsement and provides a sample in 387.15. However, the insurance company issues the MCS-90 directly to the carrier. This carrier must keep it at its principal place of business as required by 387.7(d).

In addition, the insurance provider must provide separate documentation to the FMCSA that coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Passenger

  • For-hire authority is mandatory for carriers transporting passengers.

Carriers that transport passengers for compensation either directly or indirectly must obtain passenger-carrying for-hire authority.

Required financial responsibility

  • For-hire carriers transporting passengers must provide financial responsibility, including PLPD and BIPD coverage.
  • Form MCS-90B supplies evidence that a passenger-transporting carrier has the minimum insurance coverage required by the FMCSA.

For-hire passenger carriers are required to maintain financial responsibility ranging from $1,500,000 to $5,000,000 depending on the number of passengers, including the driver, that is carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before they are granted the authority to operate. This coverage, commonly known as "public liability and property damage” (PL PD) insurance or “bodily injury and property damage” (BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire passenger carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90B is an endorsement issued to a motor carrier of passengers by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90B is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90B endorsement and provides a sample in 387.39. However, the insurance company issues the MCS-90B directly to the carrier. This carrier must keep it at its principal place of business as required by 387.31.

In addition, the insurance provider must provide separate documentation to the FMCSA that the coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Broker

  • Registration with the FMCSA must be completed by brokers of general freight and household goods.

Brokers of general freight and household goods must register with the Federal Motor Carrier Safety Administration (FMCSA) by filing a Form OP-1, Application for Motor Property Carrier and Broker Authority. Entities wishing to provide motor carriage and broker service must register with the FMCSA as both a motor carrier and a broker.

A broker is an individual or entity that arranges, for compensation, the truck transportation of cargo belonging to others. Brokers utilize authorized for-hire carriers to provide the actual truck transportation. A broker does not assume responsibility for the cargo and usually does not take possession of the cargo. A broker may provide the transportation itself only if the broker is also registered to provide transportation as a motor carrier.

Required financial responsibility

  • A surety bond or trust fund agreement must be procured by all brokers and filed with the FMCSA.

All brokers must obtain and file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond or trust fund agreement in the amount of $75,000 to comply with the FMCSA’s financial security requirements.

The surety bond or trust fund ensures the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for supplying transportation by authorized motor carriers. The FMCSA will not issue a property broker license until a surety bond or trust fund for the full limits of liability is in effect.

Evidence of a surety bond must be filed using the FMCSA’s prescribed Form BMC-84. Evidence of a trust fund with a financial institution must be filed using the FMCSA’s prescribed Form BMC-85.

The broker license remains in effect only as long as a surety bond or trust fund in the required amount remains in effect.

Broker regulations

  • Requirements for authorized property brokers include authority and financial responsibilities, as well as separate regulations contained in 49 CFR 371.

Authorized property brokers have ongoing regulatory responsibilities including recordkeeping, accounting, and compensation. Brokers cannot represent themselves as carriers. If a broker engages in any other activity, such as motor carriage, the accounts relating to the brokerage business must be separate from the accounts for other business activities.

In addition to complying with authority and financial requirements, brokers must comply with these separate regulations found in 49 CFR 371:

Freight forwarder

  • Specific criteria define a freight forwarder and the operations that person or entity conducts.
  • A key distinction separates freight forwarders from brokers, and two types of freight forwarder authority are provided.

The term “freight forwarder” means a person or entity presenting itself to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation, and in the ordinary course of its business:

  • Assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;
  • Assumes responsibility for transportation from the place of receipt to the place of destination; and
  • Uses for any part of the transportation a carrier subject to jurisdiction of either the Federal Motor Carrier Safety Administration (FMCSA) or the Surface Transportation Board.

Freight forwarders are required to have a U.S. Department of Transportation (USDOT) number and register for freight forwarder operating authority with the FMCSA. Freight forwarders that perform both freight forwarder services and motor carrier services must obtain both freight forwarder and motor carrier authority. This requirement is similar to one for motor carriers that broker loads, even occasionally. Such carriers also must have both motor carrier and broker authority.

The main distinction between a broker and a freight forwarder is a broker does not transport property and does not assume responsibility for the property.

There are two types of freight forwarder authority: Freight Forwarder of Property (except household goods) and Freight Forwarder of Household Goods. Both are required to file Form OP-1(FF) to be granted authority. Companies with existing motor carrier authority should include their current USDOT number on the OP-1(FF) form but leave the MC number field blank. The FMCSA will issue a separate MC number for freight forwarder authority.

Required financial responsibility

  • The FMCSA mandates that freight forwarders have on file a surety bond, trust fund agreement, or public liability insurance.
  • Entities with both broker and freight forwarder authority must comply with certain bond and trust fund stipulations.

Freight forwarders are required to have on file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond, trust fund agreement, or public liability insurance. Freight forwarders that operate vehicles and perform transfer, collection, and delivery services are required to carry the minimum amounts of cargo and public liability security identical to those prescribed for motor carriers in 387.303. These minimum amounts will vary, depending on gross vehicle weight rating (GVWR) and the commodity being transported (hazardous or non-hazardous). Minimum limits of security range from $300,000 to $5,000,000.

Freight forwarders that operate with no vehicles are required to have on file with the FMCSA a surety bond or trust fund agreement of at least $75,000. Applicants must seek a waiver of bodily injury and property damage (BIPD) insurance coverage and certify in its forwarding operations that it will not:

  • Own or operate any motor vehicles upon highways in the transportation of property;
  • Perform transfer, collection, or delivery services; and
  • Have vehicles operated under its direction and control in the performance of transfer, collection, or delivery services.

For a company with both broker and freight forwarder authority, one $75,000 bond and trust fund is sufficient as long as the legal entity holding the authorities is the same. This company would need to file separate BMC-84/BMC-85 forms for the broker and freight forwarder operations. However, the underlying bond or trust fund can be the same for both operations. If the broker and freight forwarder operations are conducted under separate but affiliated companies, each entity must have a separate bond or trust fund.

Freight forwarder regulations

  • Certain responsibilities must be met by freight forwarders regarding shipments and bills of lading.

The freight forwarder offers this service and thereby has an obligation to issue a through bill of lading to the shipper for each shipment the freight forwarder handles. The freight forwarder assumes responsibility for the shipment(s) from the time it is in receipt of the goods to be transported and up to the point of destination. This includes any loss, damage, and filing of claims with other carriers involved in transportation of the goods. Regulations governing freight forwarder bills of lading are found in 373.201.

Exempt

  • For-hire interstate carriers are generally exempt from economic regulation by the FMCSA.
  • Specific commodities are not exempt from federal regulation, and certain intrastate commodity carriers may not be exempt from state requirements.

An “exempt” motor carrier refers to a person engaged in transportation exempt from economic regulation by the Federal Motor Carrier Safety Administration (FMCSA).

These interstate carriers are “for-hire” carriers, transporting goods listed as exempt from federal economic regulation under 49 USC 13506. This means they do not have to obtain federal operating authority from the FMCSA.

These operations and commodities are designated as exempt from federal regulation in the United States Code (49 USC 13506) and Administrative Ruling number 107.

Section 372.115 provides a list of commodities that are not exempt, by law, from economic regulation under the FMCSA. Exempt carriers should note that commodities considered exempt from federal economic regulation may not be considered exempt in intrastate transportation. Many states have authority registration requirements for operation by interstate and intrastate exempt carriers.

The term “exempt” applies only to federal operating authority; all carriers of exempt commodities are fully subject to U.S. Department of Transportation (USDOT) safety regulations, size and weight limits, vehicle licensing, and fuel tax requirements.

The Unified Registration System (URS-1) final rule will require for-hire motor carriers of exempt commodities operating in interstate commerce to have proof of financial responsibility as required by 387.9 filed with the FMCSA. However, the URS-1 final rule has been delayed indefinitely by the FMCSA, and this provision will be effective at a later date determined by the agency.

What is a process agent?

  • FMCSA authorization as a for-hire carrier, freight forwarder, or broker is conditional on the applicant filing with the USDOT a “Designation of Agent for Service of Process.”
  • Process agents are designated by the BOC-3 form, which must be filed with the FMCSA.

Authorization granted by the Federal Motor Carrier Safety Administration (FMCSA) to operate as a for-hire carrier, freight forwarder, or broker requires the applicant, as a condition of authorization, to file with the U.S. Department of Transportation (USDOT) a “Designation of Agent for Service of Process” for each state in which operations will be conducted.

The agent for service of process is the carrier’s “statutory agent,” located in each state of operation, and may receive notice of any actions against the carrier in that state on behalf of the carrier. The process agent functions as a conduit between the legal system and the motor carrier. This enables court actions to be served in the jurisdiction where the event occurred and eliminates the need to search for the location of a motor carrier domiciled in another jurisdiction. To locate a carrier’s process agent, the USDOT will provide the agent’s name and address from its files.

The carrier may use a “blanket designation” to meet this requirement, rather than contracting with an agent in each state individually. The BOC-3 form is used to designate process agents. Unless a carrier is serving as its own agent, only a process agent, on behalf of the carrier, can file the BOC-3 form with the FMCSA. A broker or freight forwarder applicant that operates no commercial motor vehicles (CMVs) can file on their own behalf. Only one BOC-3 form can be on file with the FMCSA. A copy must be retained by the filing entity at its principal place of business.

At a date to be determined by the FMCSA, as part of the Unified Registration System (URS-1) final rule, private carriers and for-hire carriers of exempt commodities will be required to:

  • File a Designation of Agent for Service of Process with the FMCSA (366.1);
  • Report changes to a designation, such as name, address, or contact information, to the FMCSA within 30 days of the change (366.6); and
  • Report changes in name, address, or contact information to the process agents and/or the company making a blanket designation on behalf the carrier, broker, or freight forwarder within 30 days of the change. (366.6)

Whenever a process agent and/or company making a blanket designation on behalf of a motor carrier, broker, or freight forwarder terminates its contract or relationship with the entity, report the termination to the FMCSA within 30 days of the termination. (366.6)

Who must have authority?

  • Additional rules and registrations with federal and state regulators are necessary for entities offering for-hire services.

Entities that charge a direct or indirect fee for transportation or transportation-related services have other rules to follow in addition to safety rules.

These for-hire services require additional registrations with federal and state regulators.

Federal

  • The FMCSA regulates federal for-hire operating authority, which is a requirement along with the USDOT number.

Federal for-hire operating authority is regulated by the Federal Motor Carrier Safety Administration (FMCSA). This authority is required in addition to and separate from a USDOT number.

For-hire authority is issued after the entity submits an authority application, provides proof of financial responsibility, and provides a list of agents that can accept legal paperwork on behalf of the motor carrier in each state in which the carrier operates.

A company may need multiple for-hire authorities for its operations. Each type of authority will indicate the type of operations an entity can run and the cargo it may carry.

Interstate for-hire motor carriers are issued a motor carrier (MC) number. The MC number is issued with interstate operating authority and is necessary before conducting interstate for-hire motor carriage. The MC number is no longer displayed on the vehicle. According to 49 CFR 390.21, carriers must have, or obtain and display on the vehicle, a USDOT number and their legal company name before beginning operations.

Eventually, the FMCSA will no longer issue MC numbers. The USDOT number will be the carrier’s sole identifier. The effective date for this change will be determined by the FMCSA later.

State

  • Authority at the state level is essential for certain kinds of carrier movements.

State authority is separate from and in addition to federal authority. State authority is required when a movement is intrastate in nature. Most states require authority for movements within the state that are considered for-hire. States may also require registration for private and exempt commodity carriers.

Canada

  • Canada’s operating authority process varies greatly from the U.S. process.
  • Transport Canada, the federal transportation agency in that nation, has assigned its authority to Canadian jurisdictions as part of deregulation at the provincial level.

Operating authority in Canada is obtained through a process much different than that in the United States. In the United States, a carrier wishing to obtain federal operating authority applies to the U.S. Department of Transportation, a federal entity.

In Canada, however, the federal transportation agency, Transport Canada, does not issue a federal operating authority. Transport Canada has delegated its authority to the Canadian jurisdictions through the Motor Vehicle Transport Act and the Motor Carrier Safety Fitness Certificate Regulations. All provinces have deregulated private and for-hire property-carrying motor carriers regarding operating authority. Instead, a carrier must obtain a “safety fitness certificate” from the base jurisdiction as the “authority” to operate on Canadian roads. Safety fitness certificate requirements apply to:

  • Trucks, tractors, or trailers, or any combination of these vehicles, that have a registered gross vehicle weight exceeding 4,500 kilograms; or
  • Buses that are designed, constructed, and used for transportation of passengers and that have a designated seating capacity of more than 10 persons, including the driver, if they are operated for purposes other than personal use.

The safety fitness certificate allows a jurisdiction to track the safety performance of carriers on Canadian roads. With this certificate from the base province, an interprovincial carrier can operate throughout Canada. The absence of operating authority within the provinces (for private and for-hire property-carrying operators) does not absolve a carrier from complying with other requirements such as the International Registration Plan (IRP), the International Fuel Tax Agreement (IFTA), or other provincial requirements, as applicable.

Mexico-based

  • Motor carriers based in Mexico desiring to transport beyond the U.S.-Mexico border area must observe a specific authorization process.

A Mexico-domiciled motor carrier seeking to provide transportation of property or passengers in interstate commerce between Mexico and points in the United States beyond the municipalities and commercial zones along the United States-Mexico international border must pass the pre-authorization safety audit and obtain “MX” authority.

Federal

  • The FMCSA regulates federal for-hire operating authority, which is a requirement along with the USDOT number.

Federal for-hire operating authority is regulated by the Federal Motor Carrier Safety Administration (FMCSA). This authority is required in addition to and separate from a USDOT number.

For-hire authority is issued after the entity submits an authority application, provides proof of financial responsibility, and provides a list of agents that can accept legal paperwork on behalf of the motor carrier in each state in which the carrier operates.

A company may need multiple for-hire authorities for its operations. Each type of authority will indicate the type of operations an entity can run and the cargo it may carry.

Interstate for-hire motor carriers are issued a motor carrier (MC) number. The MC number is issued with interstate operating authority and is necessary before conducting interstate for-hire motor carriage. The MC number is no longer displayed on the vehicle. According to 49 CFR 390.21, carriers must have, or obtain and display on the vehicle, a USDOT number and their legal company name before beginning operations.

Eventually, the FMCSA will no longer issue MC numbers. The USDOT number will be the carrier’s sole identifier. The effective date for this change will be determined by the FMCSA later.

State

  • Authority at the state level is essential for certain kinds of carrier movements.

State authority is separate from and in addition to federal authority. State authority is required when a movement is intrastate in nature. Most states require authority for movements within the state that are considered for-hire. States may also require registration for private and exempt commodity carriers.

Canada

  • Canada’s operating authority process varies greatly from the U.S. process.
  • Transport Canada, the federal transportation agency in that nation, has assigned its authority to Canadian jurisdictions as part of deregulation at the provincial level.

Operating authority in Canada is obtained through a process much different than that in the United States. In the United States, a carrier wishing to obtain federal operating authority applies to the U.S. Department of Transportation, a federal entity.

In Canada, however, the federal transportation agency, Transport Canada, does not issue a federal operating authority. Transport Canada has delegated its authority to the Canadian jurisdictions through the Motor Vehicle Transport Act and the Motor Carrier Safety Fitness Certificate Regulations. All provinces have deregulated private and for-hire property-carrying motor carriers regarding operating authority. Instead, a carrier must obtain a “safety fitness certificate” from the base jurisdiction as the “authority” to operate on Canadian roads. Safety fitness certificate requirements apply to:

  • Trucks, tractors, or trailers, or any combination of these vehicles, that have a registered gross vehicle weight exceeding 4,500 kilograms; or
  • Buses that are designed, constructed, and used for transportation of passengers and that have a designated seating capacity of more than 10 persons, including the driver, if they are operated for purposes other than personal use.

The safety fitness certificate allows a jurisdiction to track the safety performance of carriers on Canadian roads. With this certificate from the base province, an interprovincial carrier can operate throughout Canada. The absence of operating authority within the provinces (for private and for-hire property-carrying operators) does not absolve a carrier from complying with other requirements such as the International Registration Plan (IRP), the International Fuel Tax Agreement (IFTA), or other provincial requirements, as applicable.

Mexico-based

  • Motor carriers based in Mexico desiring to transport beyond the U.S.-Mexico border area must observe a specific authorization process.

A Mexico-domiciled motor carrier seeking to provide transportation of property or passengers in interstate commerce between Mexico and points in the United States beyond the municipalities and commercial zones along the United States-Mexico international border must pass the pre-authorization safety audit and obtain “MX” authority.

What regulations apply?

  • Entities seeking to obtain for-hire authority in their operations must adhere to a certain set of rules.

Laws and regulations governing for-hire authority and operations include:

What definitions apply?

  • The process of acquiring for-hire authority includes being familiar with specific terms and their meanings.

Definitions governing for-hire authority and operations include:

  • Exempt for-hire
    An entity or person transporting exempt (unregulated) property owned by others for compensation. Exempt commodities usually include unprocessed or unmanufactured goods, fruits and vegetables, and other items of little or no value.
  • For-hire carrier
    A carrier that transports passengers, regulated property, or household goods owned by others for compensation
  • Private carrier
    A carrier that transports its own cargo, usually as a part of a business that produces, uses, sells, and/or buys the cargo being hauled

Who needs to participate in UCR?

  • Requirements of the UCR process pertain to various for-hire carriers and are separate from IRP and IFTA reporting criteria.

For-hire carriers of passengers, private and for-hire carriers of property (including those operating as “exempt” carriers), freight forwarders, leasing companies, and brokers are all subject to Unified Carrier Registration (UCR) requirements annually.

Carriers that are based in non-participating states, or that operate wholly in non-participating states are subject to UCR . Canada- and Mexico-domiciled carriers operating in the United States are also subject to UCR.

The registration does not issue a paper credential to be carried in the vehicle. Proof of UCR is available to roadside enforcement via Federal Motor Carrier Safety Administration (FMCSA) electronic information systems by accessing the carrier U.S. Department of Transportation (USDOT) number.

UCR does not replace or change requirements for registration of vehicles under the International Registration Plan (IRP) or fuel use tax reporting under the International Fuel Tax Agreement (IFTA).

Electronic registration and information are available at plan.ucr.gov.

What is the process to obtain authority?

  • Operating authority for carriers conducting for-hire operations can be achieved by an online registration process, which varies for entry-level and existing carriers.

For-hire carriers can acquire operating authority by a specific online registration process. For carriers just beginning operations, this involves submitting application Form MCSA-1 to the Federal Motor Carrier Safety Administration (FMCSA), along with an application fee, proof of required insurance, and a Designation of Process Agents (BOC-3). Carriers already registered with the FMCSA must submit Form OP-1.

New entities

  • Entry-level applicants seeking for-hire carrier authority are required to provide specific information and pay an application fee.

Before beginning operations, a new entrant for-hire carrier must submit an online registration application (MCSA-1) form to the Federal Motor Carrier Safety Administration (FMCSA) with a $300 fee for each application, file proof of required insurance, and submit a Designation of Process Agents (BOC-3). The MCSA-1 also serves as the application for a U.S. Department of Transportation (USDOT) number. When all fees and documents have been received and found to be in order by the FMCSA, the USDOT number becomes active and authority to operate is granted.

When applying for operating authority, carriers must indicate whether they will be transporting household goods, general freight, passengers, or hazardous materials. Regulations for insurance, tariffs, etc. vary for different carrier types.

At a later date determined by the FMCSA, a $300 fee will also apply to obtain the “safety registration.” This new provision was part of the FMCSA’s Unified Registration System (URS-1) rule; however, the URS-1 rule has been delayed indefinitely by the FMCSA.

Existing entities

  • Carriers that previously registered with the FMCSA acquire new authority via Form OP-1.

Carriers that already are registered with the Federal Motor Carrier Safety Administration (FMCSA) request new authority via Form OP-1. While most entities request authority using OP-1, freight forwarder applications are made on OP-1 (FF), passenger for-hire authority is applied for using OP-1 (P), and Mexico-based carriers use OP-1 (MX).

New entities

  • Entry-level applicants seeking for-hire carrier authority are required to provide specific information and pay an application fee.

Before beginning operations, a new entrant for-hire carrier must submit an online registration application (MCSA-1) form to the Federal Motor Carrier Safety Administration (FMCSA) with a $300 fee for each application, file proof of required insurance, and submit a Designation of Process Agents (BOC-3). The MCSA-1 also serves as the application for a U.S. Department of Transportation (USDOT) number. When all fees and documents have been received and found to be in order by the FMCSA, the USDOT number becomes active and authority to operate is granted.

When applying for operating authority, carriers must indicate whether they will be transporting household goods, general freight, passengers, or hazardous materials. Regulations for insurance, tariffs, etc. vary for different carrier types.

At a later date determined by the FMCSA, a $300 fee will also apply to obtain the “safety registration.” This new provision was part of the FMCSA’s Unified Registration System (URS-1) rule; however, the URS-1 rule has been delayed indefinitely by the FMCSA.

Existing entities

  • Carriers that previously registered with the FMCSA acquire new authority via Form OP-1.

Carriers that already are registered with the Federal Motor Carrier Safety Administration (FMCSA) request new authority via Form OP-1. While most entities request authority using OP-1, freight forwarder applications are made on OP-1 (FF), passenger for-hire authority is applied for using OP-1 (P), and Mexico-based carriers use OP-1 (MX).

What types of authority are required?

  • Various types of authority apply to carriers that transport property or passengers for compensation, along with brokers and freight forwarders.

Carriers that transport property or passengers for compensation must acquire a certain type of for-hire authority from the Federal Motor Carrier Safety Administration (FMCSA), which includes financial responsibility requirements. Brokers and freight forwarders also must register with the FMCSA, as well as maintaining financial responsibility and observing regulations for each type of authority.

Property

  • Property-carrying for-hire authority is essential for carriers transporting the property of other entities.

Carriers that transport property owned by others for compensation must obtain property-carrying for-hire authority. The Federal Motor Carrier Safety Administration (FMCSA) no longer makes a distinction between common property carriers and contract property carriers.

Required financial responsibility

  • Financial responsibility consists of insurance coverage that must be supplied by for-hire property carriers, including PLPD and BIPD coverage.
  • Form MCS-90 offers proof that property carriers have complied with the FMCSA-required minimum levels of financial responsibility.

For-hire property carriers are required to maintain financial responsibility ranging from $750,000 to $5,000,000 depending on the cargo carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before being granted the authority to operate. This coverage, commonly known as “public liability and property damage” (PL PD) insurance or “bodily injury and property damage”(BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire and private carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90 is an endorsement issued to a motor carrier of property by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90 is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90 endorsement and provides a sample in 387.15. However, the insurance company issues the MCS-90 directly to the carrier. This carrier must keep it at its principal place of business as required by 387.7(d).

In addition, the insurance provider must provide separate documentation to the FMCSA that coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Passenger

  • For-hire authority is mandatory for carriers transporting passengers.

Carriers that transport passengers for compensation either directly or indirectly must obtain passenger-carrying for-hire authority.

Required financial responsibility

  • For-hire carriers transporting passengers must provide financial responsibility, including PLPD and BIPD coverage.
  • Form MCS-90B supplies evidence that a passenger-transporting carrier has the minimum insurance coverage required by the FMCSA.

For-hire passenger carriers are required to maintain financial responsibility ranging from $1,500,000 to $5,000,000 depending on the number of passengers, including the driver, that is carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before they are granted the authority to operate. This coverage, commonly known as "public liability and property damage” (PL PD) insurance or “bodily injury and property damage” (BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire passenger carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90B is an endorsement issued to a motor carrier of passengers by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90B is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90B endorsement and provides a sample in 387.39. However, the insurance company issues the MCS-90B directly to the carrier. This carrier must keep it at its principal place of business as required by 387.31.

In addition, the insurance provider must provide separate documentation to the FMCSA that the coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Broker

  • Registration with the FMCSA must be completed by brokers of general freight and household goods.

Brokers of general freight and household goods must register with the Federal Motor Carrier Safety Administration (FMCSA) by filing a Form OP-1, Application for Motor Property Carrier and Broker Authority. Entities wishing to provide motor carriage and broker service must register with the FMCSA as both a motor carrier and a broker.

A broker is an individual or entity that arranges, for compensation, the truck transportation of cargo belonging to others. Brokers utilize authorized for-hire carriers to provide the actual truck transportation. A broker does not assume responsibility for the cargo and usually does not take possession of the cargo. A broker may provide the transportation itself only if the broker is also registered to provide transportation as a motor carrier.

Required financial responsibility

  • A surety bond or trust fund agreement must be procured by all brokers and filed with the FMCSA.

All brokers must obtain and file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond or trust fund agreement in the amount of $75,000 to comply with the FMCSA’s financial security requirements.

The surety bond or trust fund ensures the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for supplying transportation by authorized motor carriers. The FMCSA will not issue a property broker license until a surety bond or trust fund for the full limits of liability is in effect.

Evidence of a surety bond must be filed using the FMCSA’s prescribed Form BMC-84. Evidence of a trust fund with a financial institution must be filed using the FMCSA’s prescribed Form BMC-85.

The broker license remains in effect only as long as a surety bond or trust fund in the required amount remains in effect.

Broker regulations

  • Requirements for authorized property brokers include authority and financial responsibilities, as well as separate regulations contained in 49 CFR 371.

Authorized property brokers have ongoing regulatory responsibilities including recordkeeping, accounting, and compensation. Brokers cannot represent themselves as carriers. If a broker engages in any other activity, such as motor carriage, the accounts relating to the brokerage business must be separate from the accounts for other business activities.

In addition to complying with authority and financial requirements, brokers must comply with these separate regulations found in 49 CFR 371:

Freight forwarder

  • Specific criteria define a freight forwarder and the operations that person or entity conducts.
  • A key distinction separates freight forwarders from brokers, and two types of freight forwarder authority are provided.

The term “freight forwarder” means a person or entity presenting itself to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation, and in the ordinary course of its business:

  • Assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;
  • Assumes responsibility for transportation from the place of receipt to the place of destination; and
  • Uses for any part of the transportation a carrier subject to jurisdiction of either the Federal Motor Carrier Safety Administration (FMCSA) or the Surface Transportation Board.

Freight forwarders are required to have a U.S. Department of Transportation (USDOT) number and register for freight forwarder operating authority with the FMCSA. Freight forwarders that perform both freight forwarder services and motor carrier services must obtain both freight forwarder and motor carrier authority. This requirement is similar to one for motor carriers that broker loads, even occasionally. Such carriers also must have both motor carrier and broker authority.

The main distinction between a broker and a freight forwarder is a broker does not transport property and does not assume responsibility for the property.

There are two types of freight forwarder authority: Freight Forwarder of Property (except household goods) and Freight Forwarder of Household Goods. Both are required to file Form OP-1(FF) to be granted authority. Companies with existing motor carrier authority should include their current USDOT number on the OP-1(FF) form but leave the MC number field blank. The FMCSA will issue a separate MC number for freight forwarder authority.

Required financial responsibility

  • The FMCSA mandates that freight forwarders have on file a surety bond, trust fund agreement, or public liability insurance.
  • Entities with both broker and freight forwarder authority must comply with certain bond and trust fund stipulations.

Freight forwarders are required to have on file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond, trust fund agreement, or public liability insurance. Freight forwarders that operate vehicles and perform transfer, collection, and delivery services are required to carry the minimum amounts of cargo and public liability security identical to those prescribed for motor carriers in 387.303. These minimum amounts will vary, depending on gross vehicle weight rating (GVWR) and the commodity being transported (hazardous or non-hazardous). Minimum limits of security range from $300,000 to $5,000,000.

Freight forwarders that operate with no vehicles are required to have on file with the FMCSA a surety bond or trust fund agreement of at least $75,000. Applicants must seek a waiver of bodily injury and property damage (BIPD) insurance coverage and certify in its forwarding operations that it will not:

  • Own or operate any motor vehicles upon highways in the transportation of property;
  • Perform transfer, collection, or delivery services; and
  • Have vehicles operated under its direction and control in the performance of transfer, collection, or delivery services.

For a company with both broker and freight forwarder authority, one $75,000 bond and trust fund is sufficient as long as the legal entity holding the authorities is the same. This company would need to file separate BMC-84/BMC-85 forms for the broker and freight forwarder operations. However, the underlying bond or trust fund can be the same for both operations. If the broker and freight forwarder operations are conducted under separate but affiliated companies, each entity must have a separate bond or trust fund.

Freight forwarder regulations

  • Certain responsibilities must be met by freight forwarders regarding shipments and bills of lading.

The freight forwarder offers this service and thereby has an obligation to issue a through bill of lading to the shipper for each shipment the freight forwarder handles. The freight forwarder assumes responsibility for the shipment(s) from the time it is in receipt of the goods to be transported and up to the point of destination. This includes any loss, damage, and filing of claims with other carriers involved in transportation of the goods. Regulations governing freight forwarder bills of lading are found in 373.201.

Exempt

  • For-hire interstate carriers are generally exempt from economic regulation by the FMCSA.
  • Specific commodities are not exempt from federal regulation, and certain intrastate commodity carriers may not be exempt from state requirements.

An “exempt” motor carrier refers to a person engaged in transportation exempt from economic regulation by the Federal Motor Carrier Safety Administration (FMCSA).

These interstate carriers are “for-hire” carriers, transporting goods listed as exempt from federal economic regulation under 49 USC 13506. This means they do not have to obtain federal operating authority from the FMCSA.

These operations and commodities are designated as exempt from federal regulation in the United States Code (49 USC 13506) and Administrative Ruling number 107.

Section 372.115 provides a list of commodities that are not exempt, by law, from economic regulation under the FMCSA. Exempt carriers should note that commodities considered exempt from federal economic regulation may not be considered exempt in intrastate transportation. Many states have authority registration requirements for operation by interstate and intrastate exempt carriers.

The term “exempt” applies only to federal operating authority; all carriers of exempt commodities are fully subject to U.S. Department of Transportation (USDOT) safety regulations, size and weight limits, vehicle licensing, and fuel tax requirements.

The Unified Registration System (URS-1) final rule will require for-hire motor carriers of exempt commodities operating in interstate commerce to have proof of financial responsibility as required by 387.9 filed with the FMCSA. However, the URS-1 final rule has been delayed indefinitely by the FMCSA, and this provision will be effective at a later date determined by the agency.

Property

  • Property-carrying for-hire authority is essential for carriers transporting the property of other entities.

Carriers that transport property owned by others for compensation must obtain property-carrying for-hire authority. The Federal Motor Carrier Safety Administration (FMCSA) no longer makes a distinction between common property carriers and contract property carriers.

Required financial responsibility

  • Financial responsibility consists of insurance coverage that must be supplied by for-hire property carriers, including PLPD and BIPD coverage.
  • Form MCS-90 offers proof that property carriers have complied with the FMCSA-required minimum levels of financial responsibility.

For-hire property carriers are required to maintain financial responsibility ranging from $750,000 to $5,000,000 depending on the cargo carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before being granted the authority to operate. This coverage, commonly known as “public liability and property damage” (PL PD) insurance or “bodily injury and property damage”(BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire and private carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90 is an endorsement issued to a motor carrier of property by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90 is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90 endorsement and provides a sample in 387.15. However, the insurance company issues the MCS-90 directly to the carrier. This carrier must keep it at its principal place of business as required by 387.7(d).

In addition, the insurance provider must provide separate documentation to the FMCSA that coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Required financial responsibility

  • Financial responsibility consists of insurance coverage that must be supplied by for-hire property carriers, including PLPD and BIPD coverage.
  • Form MCS-90 offers proof that property carriers have complied with the FMCSA-required minimum levels of financial responsibility.

For-hire property carriers are required to maintain financial responsibility ranging from $750,000 to $5,000,000 depending on the cargo carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before being granted the authority to operate. This coverage, commonly known as “public liability and property damage” (PL PD) insurance or “bodily injury and property damage”(BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire and private carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90 is an endorsement issued to a motor carrier of property by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90 is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90 endorsement and provides a sample in 387.15. However, the insurance company issues the MCS-90 directly to the carrier. This carrier must keep it at its principal place of business as required by 387.7(d).

In addition, the insurance provider must provide separate documentation to the FMCSA that coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Passenger

  • For-hire authority is mandatory for carriers transporting passengers.

Carriers that transport passengers for compensation either directly or indirectly must obtain passenger-carrying for-hire authority.

Required financial responsibility

  • For-hire carriers transporting passengers must provide financial responsibility, including PLPD and BIPD coverage.
  • Form MCS-90B supplies evidence that a passenger-transporting carrier has the minimum insurance coverage required by the FMCSA.

For-hire passenger carriers are required to maintain financial responsibility ranging from $1,500,000 to $5,000,000 depending on the number of passengers, including the driver, that is carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before they are granted the authority to operate. This coverage, commonly known as "public liability and property damage” (PL PD) insurance or “bodily injury and property damage” (BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire passenger carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90B is an endorsement issued to a motor carrier of passengers by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90B is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90B endorsement and provides a sample in 387.39. However, the insurance company issues the MCS-90B directly to the carrier. This carrier must keep it at its principal place of business as required by 387.31.

In addition, the insurance provider must provide separate documentation to the FMCSA that the coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Required financial responsibility

  • For-hire carriers transporting passengers must provide financial responsibility, including PLPD and BIPD coverage.
  • Form MCS-90B supplies evidence that a passenger-transporting carrier has the minimum insurance coverage required by the FMCSA.

For-hire passenger carriers are required to maintain financial responsibility ranging from $1,500,000 to $5,000,000 depending on the number of passengers, including the driver, that is carried.

The federal government has mandated that certain carriers must have insurance in place to protect the public before they are granted the authority to operate. This coverage, commonly known as "public liability and property damage” (PL PD) insurance or “bodily injury and property damage” (BIPD) insurance, must be active, or the carrier risks suspension or revocation of operating authority as well as fines or other enforcement action.

All for-hire passenger carriers required to have and maintain PLPD insurance under Part 387 must retain proof of public liability and property damage at their principal place of business.

The Form MCS-90B is an endorsement issued to a motor carrier of passengers by an insurance company to show proof that the carrier has in effect the minimum levels of financial responsibility required by the Federal Motor Carrier Safety Administration (FMCSA). The MCS-90B is not an actual insurance policy, serving only as proof the carrier is in compliance with the FMCSA’s requirements that carriers maintain coverage for protection of the public for injury or property damage resulting from operation of the vehicle.

The FMCSA determines the form and content of the MCS-90B endorsement and provides a sample in 387.39. However, the insurance company issues the MCS-90B directly to the carrier. This carrier must keep it at its principal place of business as required by 387.31.

In addition, the insurance provider must provide separate documentation to the FMCSA that the coverages are in place and notify the agency if coverage lapses or is expected to lapse.

Broker

  • Registration with the FMCSA must be completed by brokers of general freight and household goods.

Brokers of general freight and household goods must register with the Federal Motor Carrier Safety Administration (FMCSA) by filing a Form OP-1, Application for Motor Property Carrier and Broker Authority. Entities wishing to provide motor carriage and broker service must register with the FMCSA as both a motor carrier and a broker.

A broker is an individual or entity that arranges, for compensation, the truck transportation of cargo belonging to others. Brokers utilize authorized for-hire carriers to provide the actual truck transportation. A broker does not assume responsibility for the cargo and usually does not take possession of the cargo. A broker may provide the transportation itself only if the broker is also registered to provide transportation as a motor carrier.

Required financial responsibility

  • A surety bond or trust fund agreement must be procured by all brokers and filed with the FMCSA.

All brokers must obtain and file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond or trust fund agreement in the amount of $75,000 to comply with the FMCSA’s financial security requirements.

The surety bond or trust fund ensures the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for supplying transportation by authorized motor carriers. The FMCSA will not issue a property broker license until a surety bond or trust fund for the full limits of liability is in effect.

Evidence of a surety bond must be filed using the FMCSA’s prescribed Form BMC-84. Evidence of a trust fund with a financial institution must be filed using the FMCSA’s prescribed Form BMC-85.

The broker license remains in effect only as long as a surety bond or trust fund in the required amount remains in effect.

Broker regulations

  • Requirements for authorized property brokers include authority and financial responsibilities, as well as separate regulations contained in 49 CFR 371.

Authorized property brokers have ongoing regulatory responsibilities including recordkeeping, accounting, and compensation. Brokers cannot represent themselves as carriers. If a broker engages in any other activity, such as motor carriage, the accounts relating to the brokerage business must be separate from the accounts for other business activities.

In addition to complying with authority and financial requirements, brokers must comply with these separate regulations found in 49 CFR 371:

Required financial responsibility

  • A surety bond or trust fund agreement must be procured by all brokers and filed with the FMCSA.

All brokers must obtain and file with the Federal Motor Carrier Safety Administration (FMCSA) a surety bond or trust fund agreement in the amount of $75,000 to comply with the FMCSA’s financial security requirements.

The surety bond or trust fund ensures the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for supplying transportation by authorized motor carriers. The FMCSA will not issue a property broker license until a surety bond or trust fund for the full limits of liability is in effect.

Evidence of a surety bond must be filed using the FMCSA’s prescribed Form BMC-84. Evidence of a trust fund with a financial institution must be filed using the FMCSA’s prescribed Form BMC-85.

The broker license remains in effect only as long as a surety bond or trust fund in the required amount remains in effect.

Broker regulations

  • Requirements for authorized property brokers include authority and financial responsibilities, as well as separate regulations contained in 49 CFR 371.

Authorized property brokers have ongoing regulatory responsibilities including recordkeeping, accounting, and compensation. Brokers cannot represent themselves as carriers. If a broker engages in any other activity, such as motor carriage, the accounts relating to the brokerage business must be separate from the accounts for other business activities.

In addition to complying with authority and financial requirements, brokers must comply with these separate regulations found in 49 CFR 371:

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