Brokers of general freight and household goods

Scope

Brokers of general freight and household goods must register with the Federal Motor Carrier 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.

Regulatory citations

• 49 CFR 360.3 — Filing fees
• 49 CFR 365.107 — Types of applications
• 49 CFR 366 — Designation of process agent
• 49 CFR 365.109 — FMCSA review of the application
• 49 CFR 371.13 — Accounting
• 49 CFR 371.7 — Misrepresentation
• 49 CFR 371 —Brokers of property
• 49 CFR 371 Subpart B — Special rules for household goods brokers
• 49 CFR 387.307 — Property broker surety bond or trust fund
• 49 CFR 375 — Transportation of household goods in interstate commerce; consumer protection regulations

Key definitions

• Broker: 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 the transportation as a motor carrier.
• Household goods: The personal effects or property used, or to be used, in a dwelling, when part of the equipment or supplies of the dwelling. Transportation of the household goods must be arranged and paid for by the individual shipper or by another individual on behalf of the shipper. Household goods includes property moving from a factory or store if purchased with the intent to use in a dwelling and transported at the request of the householder, who also pays the transportation charges.
• Household goods broker: An individual or entity that arranges for transportation of household goods by motor carrier for compensation.

Summary of requirements

Financial responsibility. All brokers must:

• Obtain and file with FMCSA a surety bond or trust fund agreement in the amount of $75,000 to comply with FMCSA’s financial security requirements. The surety bond or the 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 the supplying of 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.
• File evidence of a surety bond 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.

Process agent designation. A process agent is a representative upon whom court papers may be served in any proceeding brought against a broker. When applying for broker authority, applicants must submit Form BOC–3, “Designation of Legal Process Agents.”

Brokers must list process agents in each state in which they have an office and in which they write contracts.

Forms and fees. A separate filing fee of $300 is required for each type of transportation authority requested (motor carrier, broker, or freight forwarder).

The forms (OP-1, BOC-3) are available from the FMCSA Division Office in each State or at one of the FMCSA Service Centers.

Regulatory responsibilities. 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.

Household goods broker consumer protection requirements. There are additional rules for household goods brokers. All interstate household goods brokers are subject to these requirements, which ensure that individual shippers arranging for the transportation of their household goods through a broker receive the necessary information about their rights and responsibilities.

Household goods brokers:

• May only utilize motor carriers with an active USDOT number and valid interstate operating authority/MC Number;
• Must display physical address, USDOT number, MC-Number, status as a broker (not a carrier) and a statement indicating estimates are based on the carrier tariff, available upon request in advertisements and on Internet homepages;
• Must provide potential individual shippers a list of all authorized household goods carriers you use along with their USDOT and MC-numbers and a statement indicating you are a broker arranging the transportation, and not a carrier;
• Must provide federal consumer protection information “Ready to Move?—Tips for a Successful Interstate Move” and “Your Rights and Responsibilities When You Move” by website link to FMCSA site or provide copies at the time you provide an estimate; must have signed dated receipt from shipper and retain receipt for three years;
• Must provide any estimates for consumers in writing, on behalf of a specific household goods motor carrier pursuant to a written agreement containing specified provisions, and must (unless waived) be based on a physical survey by the motor carrier on whose behalf the estimate is provided if the goods are within 50 miles of the motor carrier’s or its agent’s location. Documents must be retained for three years; and
• Must disclose on any websites and in agreements with prospective shippers’ cancellation policies, deposit polices, and policies for refunding deposited funds and maintain required records.

UCRA registration with the states. The Unified Carrier Registration Agreement (UCRA) requires the registration of brokers, along with freight forwarders, leasing companies, and all for-hire, private, and exempt property carriers, and for-hire passenger carriers.

The UCRA fee structure is a bracket system, with the per-carrier fees based on the number of commercial vehicles the carrier operates. The lowest bracket applies brokers that operate no vehicles at all.

For more information, see Unified Carrier Registration.

Obtaining payment from brokers. The law requires brokers to be licensed and maintain surety bonds or trust funds to protect shippers and carriers when disputes arise. The FMCSA does not have the authority to order payment of monies owed on brokered loads. If a broker is licensed, information may be obtained on the identity of its surety or trustee from the FMCSA. A claim with supporting documentation may then be filed with the surety or trustee for monies owed by the broker.

There are no federal regulations containing specific guidelines regarding the legality of an agency relationship between carriers and brokers or shippers and brokers. Shippers and carriers may request a broker to state in writing whether it is acting as an agent of the carrier or shipper. Courts generally look to State laws of agency relationships to establish when payments to a third party should be considered. A motor carrier may pursue payment from a shipper when a broker fails to remit compensation to the carrier, or the carrier may take the matter to court to determine liability.