Broker authority vs carrier authority: the $75,000 bond, recordkeeping, and double brokering

The statute draws the line on one fact: who performs the transportation. 49 U.S.C. 13102(2) defines a broker as "a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation." 49 U.S.C. 13102(14) defines the other side in one sentence: "the term 'motor carrier' means a person providing motor vehicle transportation for compensation."

The operative regulation, 49 CFR 371.2, tracks the statute and adds the carve-out that matters most in practice: "Broker means a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport." That second sentence is the test: a carrier dispatching its own freight, or freight it has legally bound itself to haul, is not brokering; a carrier arranging someone else's freight for a fee, without accepting the obligation to haul it, is.

Part 371 also defines the edge case of an in-house sales relationship. A bona fide agent is "persons who are part of the normal organization of a motor carrier and perform duties under the carrier's directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others." FMCSA's 2023 guidance on this definition, discussed in section 6, underscores that the relationship has to be formalized and continuing, not a casual referral arrangement.

Part 371 also splits what a broker does into two categories. § 371.2: "Brokerage or brokerage service is the arranging of transportation or the physical movement of a motor vehicle or of property," while "Non-brokerage service is all other service performed by a broker on behalf of a motor carrier, consignor, or consignee." Dispatching and load-matching are brokerage service; a warehousing or freight-audit function a brokerage also sells is non-brokerage service, and § 371.13 (section 4) requires the two to be accounted for separately.

How we verified this: we read the full XML of 49 CFR part 371 from the eCFR API for the text in effect 2026-09-01, retrieved 2026-09-23, and 49 U.S.C. 13102 from the Legal Information Institute the same day.

The registration requirement that applies to carriers applies to brokers by the same sentence. 49 U.S.C. 13901(a): "A person may provide transportation as a motor carrier subject to jurisdiction under subchapter I of chapter 135 or service as a freight forwarder subject to jurisdiction under subchapter III of such chapter, or service as a broker for transportation subject to jurisdiction under subchapter I of such chapter only if the person is registered under this chapter to provide such transportation or service." The application type is listed separately at 49 CFR 365.101T(d): "Applications for licenses to operate as a broker of motor vehicle transportation" — distinct from (a), "certificates and permits to operate as a motor common or contract carrier."

The registration decision itself is governed by 49 U.S.C. 13904(a): FMCSA "shall register ... a person to be a broker for transportation of property" if it determines the person "(1) has sufficient experience to qualify the person to act as a broker for transportation; and (2) is fit, willing, and able to be a broker for transportation and to comply with this part and applicable regulations." § 13904(c) turns "sufficient experience" into a concrete requirement: "Each broker shall employ, as an officer, an individual who — (1) has at least 3 years of relevant experience; or (2) provides the Secretary with satisfactory evidence of the individual's knowledge of related rules, regulations, and industry practices." § 13904(g) adds an ongoing duty: a broker must update its registration "not later than 30 days after a change in the broker's address, other contact information, officers, process agent, or other essential information."

A broker's registration is issued the same way a carrier's is, through the URS online application. 49 CFR 365.106T(a) lists "Broker of general commodities or household goods" as one of the three registration categories filed on Form MCSA-1. The docket-number prefixes it defines — "Motor Carrier (MC), Mexico owned or controlled (MX) or Freight Forwarder (FF) number" — have no separate "broker" prefix; a broker's docket is issued as an MC number, the same prefix a common or contract carrier gets, which is why an MC number alone does not tell you whether the holder can drive a truck or only arrange for one. The fee is the same as any other authority type: 49 CFR 360.3T(f)(1) prices "An application for motor carrier operating authority, a certificate of registration for certain foreign carriers, property broker authority, or freight forwarder authority" at $300, and § 360.3T(d)(1) requires a business seeking more than one type to pay more than once: "A separate filing fee is required for each type of authority sought in each transportation mode, e.g., common, contract, and broker authority for motor property carriers."

How we verified this: 49 U.S.C. 13901 and 13904 retrieved 2026-09-23 from the Legal Information Institute. 49 CFR 365.101T, 365.106T and 360.3T retrieved from the eCFR API, text in effect 2026-09-01, retrieved 2026-09-23.

A carrier's insurance protects the public from the risk of a collision. A broker's bond protects shippers and carriers from the risk that the broker takes their money and does not pay it out. 49 CFR 387.307(a), effective January 16, 2026: "A broker must have a surety bond or trust fund of $75,000 in effect. FMCSA will not register a broker until a surety bond or trust fund for the full limits of liability prescribed herein is in effect. The broker registration shall remain in effect only as long as a surety bond or trust fund remains in effect ... Evidence of a surety bond must be filed using FMCSA's prescribed Form BMC-84. Evidence of a trust fund with a financial institution must be filed using FMCSA's prescribed Form BMC-85." The bond or fund "shall ensure 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."

A trust fund is held to a liquidity standard a bond is not. § 387.307(b): "Trust funds under this section must contain assets aggregating to $75,000 that can be liquidated to cash within 7 calendar days. Acceptable assets included in any trust fund filed under this section are limited to cash, irrevocable letters of credit issued by a federally insured depository institution, and Treasury bonds." A broker cannot substitute a general-purpose insurance policy or a line of credit tied up elsewhere; the instrument has to be one of the two named forms, in one of the listed asset types.

The bond has its own suspension clock, faster than the 30-day insurance-cancellation notice that applies to carrier liability policies. Under § 387.307(e)(1), the surety or trustee must notify FMCSA electronically when a paid claim "causes the surety bond or trust fund to fall below $75,000," within "2 business days." FMCSA then serves notice under § 387.307(e)(5) that the broker's authority "will be suspended within 7 business days of service of the notice" unless the broker shows the notice was sent in error, the bond has been restored, or the claims were paid without touching it. If nothing is shown, § 387.307(e)(6): "FMCSA will enter a suspension of the broker's authority and provide written notice to the broker that the suspension is in effect." A single large claim can knock out a broker's authority in under two weeks.

A broker may also self-insure in place of a bond or trust fund. 49 CFR 387.309(a) lets FMCSA approve self-insurance on "a true and accurate statement of its financial condition," but § 387.309(a)(3) conditions it on safety performance, not financial size: the applicant "must submit evidence of a current 'satisfactory' safety rating," and "any self-insurance authority granted by the FMCSA will automatically expire 30 days after a carrier receives a less than satisfactory rating." This path is built for large, safety-rated carriers, not a startup brokerage with no rating to point to.

How we verified this: we read the full XML of 49 CFR part 387 from the eCFR API for the text in effect 2026-09-01, retrieved 2026-09-23, including § 387.307's effective-date note and § 387.309.

A carrier's core recordkeeping obligations run to safety — driver files, hours of service, maintenance. A broker's run to the money and the paper trail of the transaction. 49 CFR 371.3(a): "A broker shall keep a record of each transaction," showing "(1) The name and address of the consignor; (2) The name, address, and registration number of the originating motor carrier; (3) The bill of lading or freight bill number; (4) The amount of compensation received by the broker for the brokerage service performed and the name of the payer; (5) A description of any non-brokerage service performed in connection with each shipment or other activity, the amount of compensation received for the service, and the name of the payer; and (6) The amount of any freight charges collected by the broker and the date of payment to the carrier." § 371.3(b) sets the retention period: "Brokers shall keep the records required by this section for a period of three years." § 371.3(c) gives both sides of a brokered deal a right to see it: "Each party to a brokered transaction has the right to review the record of the transaction required to be kept by these rules."

Two adjoining sections govern how a broker may represent itself and what it may charge for. § 371.7: "(a) A broker shall not perform or offer to perform any brokerage service (including advertising), in any name other than that in which its registration is issued. (b) A broker shall not, directly or indirectly, represent its operations to be that of a carrier. Any advertising shall show the broker status of the operation." § 371.9(a) bars a broker from being paid by a carrier for arranging a load the broker has a financial stake in: "The broker owns or has a material beneficial interest in the shipment" or "is able to exercise control over the shipment because the broker owns the shipper, the shipper owns the broker, or there is common ownership of the two." § 371.9(b) separately bars kickbacks to shippers: "A broker shall not give or offer to give anything of value to any shipper, consignor or consignee ... except inexpensive advertising items given for promotional purposes."

Finally, a broker running other lines of business has to keep the money separate. § 371.13: "Each broker who engages in any other business shall maintain accounts so that the revenues and expenses relating to the brokerage portion of its business are segregated from its other activities. Expenses that are common shall be allocated on an equitable basis; however, the broker must be prepared to explain the basis for the allocation."

How we verified this: full text of 49 CFR part 371 subpart A, eCFR API, text in effect 2026-09-01, retrieved 2026-09-23.

Yes, and it is common: many freight brokerages also run trucks, and many asset-based carriers also broker overflow freight to other carriers. Nothing in the statute forbids holding both an MC carrier authority and an MC broker authority at once; what it forbids is doing the broker's job without the broker's registration.

The rule runs both directions. A broker that wants to physically haul freight needs a separate carrier registration: 49 U.S.C. 13904(d)(1), "Registration as Motor Carrier Required": "A broker for transportation may not provide transportation as a motor carrier unless the broker has registered separately under this chapter to provide transportation as a motor carrier." § 13904(d)(2) carves out a carrier moving its own freight jointly with other registered carriers, or with rail or water carriers — that is not "brokering."

The mirror rule for a carrier that wants to arrange freight is 49 U.S.C. 13902(a)(6), "Separate registration required": "A motor carrier may not broker transportation services unless the motor carrier has registered as a broker under this chapter." A later, more detailed provision spells out exactly what a registered carrier may do with someone else's freight without a broker registration. 49 U.S.C. 13902(i): it "(1) may only provide transportation of property with — (A) self-propelled motor vehicles owned or leased by the motor carrier; or (B) interchanges under regulations issued by the Secretary if the originating carrier — (i) physically transports the cargo at some point; and (ii) retains liability for the cargo and for payment of interchanged carriers; and (2) may not arrange transportation except as described in paragraph (1) unless the motor carrier has obtained a separate registration as a freight forwarder or broker ... under section 13903 or 13904." In plain terms: a carrier can run the load itself, or hand it off under an interchange where it stays on the hook for the cargo and the pay, but it cannot pass a load to an unaffiliated carrier for a cut without a broker docket.

Operating outside either authority carries a specific federal penalty, separate from the authority-revocation consequences discussed elsewhere on this site. 49 U.S.C. 14916(a), "Unlawful brokerage activities": "A person may provide interstate brokerage services as a broker only if that person — (1) is registered under, and in compliance with, section 13904; and (2) has satisfied the financial security requirements under section 13906." § 14916(c) sets the penalty: anyone who "knowingly authorizes, consents to, or permits ... a violation of subsection (a) is liable — (1) to the United States Government for a civil penalty in an amount not to exceed $10,000 for each violation; and (2) to the injured party for all valid claims incurred without regard to amount." § 14916(d) reaches past the LLC to the people running it: liability "shall apply, jointly and severally — (1) to any corporate entity or partnership involved; and (2) to the individual officers, directors, and principals of such entities."

How we verified this: 49 U.S.C. 13902, 13904 and 14916 retrieved 2026-09-23 from the Legal Information Institute at law.cornell.edu.

Neither "double brokering" nor "co-brokering" is a term defined anywhere in 49 U.S.C. chapter 139 or 49 CFR parts 365, 371, or 387. FMCSA has said so directly, in its own words, in response to public comments asking the agency to act against the practice. In its June 2023 final guidance on the definitions of "broker" and "bona fide agents," issued under a mandate in the Infrastructure Investment and Jobs Act, FMCSA wrote: "A group of commenters also sought action regarding allegations of fraud, supply chain abuse, theft of cargo, double brokering, and misappropriation of funds occurring in the industry. In response, FMCSA notes that 'double brokering' is not a term defined by statute or regulation, and commenters use the term to refer to several different activities. However, it appears most commenters concerned with double brokering are referring to ways in which some entities act as brokers without proper authority."

That last sentence is the operative point: what people call "double brokering" is, in most of the complaints FMCSA reviewed, just unregistered brokerage under a different name — the section 5 problem, an unauthorized party inserting itself into a load's chain of custody and taking a cut without ever holding a broker registration or bond. Where a registered, bonded broker legitimately subcontracts capacity through another registered, bonded broker, sometimes called "co-brokering," that is not itself a violation of any provision quoted on this page; the violation is an unregistered party posing as a carrier or hiding the true party in interest from a shipper or carrier who has not agreed to it. FMCSA's guidance does not draw that line with regulatory precision, and neither does this page — the agency itself says the industry uses the term "to refer to several different activities," and the hook it actually uses against these cases is the ordinary unauthorized-brokerage penalty in § 14916(c), not a "double brokering" statute that does not exist. FMCSA has separately pursued rulemaking on broker-transaction transparency and identity verification at registration, aimed at the same fraud patterns, but neither has produced a regulatory definition of "double brokering" as of the text in effect today.

How we verified this: 88 FR 39368 (June 16, 2023), "Definitions of Broker and Bona Fide Agents," retrieved 2026-09-23 from the Federal Register's full-text service. FMCSA's own web pages return HTTP 403 to automated retrieval, so nothing here is sourced from fmcsa.dot.gov.

The carrier lookup works the same way for a broker docket as it does for a carrier docket, because both are issued as MC numbers under the same registration system described in section 2. Before tendering a load to a broker, or accepting one from a party claiming to be a broker, check the same three things you would check on a carrier:

• Authority type and status. The operating authority table shows whether the docket is registered for broker authority specifically, and whether that authority is active. A USDOT number alone, as explained on our USDOT vs MC number page, is not evidence of any operating authority at all.
• The BMC-84 or BMC-85 on file. The insurance panel of a lookup record shows the form code and amount for any broker security on file, the same way it shows a BMC-91X for a carrier's liability policy — see our BMC filings guide for how to read that table. No BMC-84 or BMC-85 on file with an active broker docket means the $75,000 required by § 387.307(a) is not actually backing the business you are about to pay or be paid by.
• Recent authority history. The authority changes page lists recent suspensions and revocations. A broker docket suspended for a bond shortfall under the 7-business-day clock in § 387.307(e) will show there before most other public sources catch up.

None of this substitutes for a written broker-carrier agreement or your own carrier packet process — this page is about what the federal registration confirms, not contract practice.

• This is not legal advice, and CarrierStat is not affiliated with FMCSA or any government agency. Whether a specific arrangement crosses from a bona fide agency relationship into unregistered brokerage is a fact-specific question; confirm before you rely on it.
• Household goods brokers are subject to additional consumer-protection rules at 49 CFR part 371 subpart B — advertising disclosures, written estimates, carrier-agreement requirements — that apply only to individual-shipper moves and are not walked through here.
• Property broker bond insurers and sureties have their own eligibility and suspension rules under § 387.307(g); this page covers the broker's obligation, not the surety's.
• Broker-transaction transparency rulemaking is not yet final text as of this page's retrieval date and is not quoted here.
• State broker or freight-forwarding licensing, where it exists, is set by each state. We print none of it.

49 U.S.C. 13102, 13901, 13902, 13904, 14916 — retrieved 2026-09-23 from the Legal Information Institute at law.cornell.edu.

49 CFR part 371 (Brokers of Property) — §§ 371.1, 371.2, 371.3, 371.7, 371.9, 371.13. eCFR API, text in effect 2026-09-01, retrieved 2026-09-23; human-readable at ecfr.gov.

49 CFR part 365 — §§ 365.101T(d), 365.106T. Same snapshot; human-readable at ecfr.gov.

49 CFR 387.307 and 387.309 — property broker surety bond or trust fund (§ 387.307 effective Jan. 16, 2026) and self-insurance qualification. Same snapshot; human-readable at ecfr.gov.

49 CFR 360.3T(f)(1) and (d)(1) — the $300 filing fee and the per-type-of-authority rule. Same snapshot.

88 FR 39368 (Definitions of Broker and Bona Fide Agents, June 16, 2023) — retrieved 2026-09-23 from federalregister.gov, full-text service.

Carrier authority & insurance lookup — authority type, status and BMC filings on record for any USDOT or MC number, broker or carrier.

USDOT number vs MC number — why an MC number alone does not tell you whether a docket is a carrier or a broker.

BMC-91, BMC-91X, BMC-34 and the broker bond — every BMC form FMCSA accepts, including BMC-84 and BMC-85 in context with carrier insurance.

All guides.