Get SMALL ENTITY COMPLIANCE GUIDE FOR BROKER ... - Fmcsa Dot

Freight agents and brokers are often conflated or confused. The major difference is licensure and liability. A freight broker is licensed through the Federal Motor Carrier Safety Administration (FMCSA) and is legally responsible for the cargo. A freight agent is not licensed or liable.

§ 371.2 Definitions. (a) Broker means a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier.

“FMCSA believes that most brokers operate with integrity and uphold the contracts made with motor carriers and shippers,” the agency said. “However, a minority of brokers with unscrupulous business practices can create unnecessary financial hardship for unsuspecting motor carriers.”

Freight brokers help cargo owners ship their goods securely and efficiently. Brokers connect shippers with carriers, and then help navigate and coordinate the many moving parts of the supply chain to ensure that cargo gets safely to its destination.

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA, Pub. L. 104-121, as amended by Pub. L. 110-28, May 25, 2007) contains specific requirements for issuance of “small entity compliance guides.” Guides are to explain what actions affected entities must take to comply with agency rules.

A freight agent connects shippers and carriers. Like Hollywood agents find and organize gigs for their clients, freight agents organize jobs for truckers. They are the ones connecting loads to trucks and trucks to loads. Agents source clients, negotiate fees, and plan pickups and deliveries.

Freight brokers are licensed by the Federal Motor Carrier Safety Administration (FMCSA). The license is referred to as a Motor Carrier Operating Authority, or MC Authority.

A freight broker is also known as a transportation intermediary. The broker negotiates the deals with motor carriers and helps shippers move their goods, but doesn't actually own the carrier used.