The role freight brokers play in the transportation and logistics industry cannot be understated. As intermediaries between shippers and carriers, the connection brokers are able to make can save their customers both time and money while ensuring products are delivered on time and in good condition. However, the more than 17,000 licensed freight brokers operating in the United States alone can make it a challenge to know which intermediary is the best fit for the job. Checking the legitimacy of your freight broker before agreeing to partner together for shipping needs is crucial to the process. Here are the simple steps to take to check if a freight broker is legitimate.

Freight Broker Registration and Licensing

Anyone with experience in the transportation and logistics industry may feel confident that his or her business track record, connections with shippers and carriers, and understanding of the market can lead to a successful freight brokerage operation. However, there are specific requirements which must be met in order to lawfully conduct brokerage business. All freight brokers operating in the United States are required to be registered with the FMCSA. The license from the FMCSA is step one, and it may also be followed by state or city business licensing and registrations.

You can check if a freight broker is licensed by visiting the FMCSA website and doing a quick search. The same can be done for business registrations in a specific state. If a broker cannot be found or there are discrepancies between what the broker stated and what their registration files reveal, opt to work with a different freight professional who has valid, up-to-date credentials.

Checking Bond Certificates

Another requirement licensed freight brokers must abide by revolves around safeguarding customers from fraudulent or deceptive practices. A freight broker bond in the amount of at least $75,000 is required by the FMCSA in order to operate a freight brokerage business legally. This bond protects you as the customer by ensuring a broker follows the rules put forth by the FMCSA and other state licensing and registration agencies. If payment is not made in a timely manner, or if there are other questionable scenarios that take place during a transaction, a claim against a broker bond can be made to offset any financial loss.

Be sure to ask for the bond certificate of a freight broker you plan to work with, and pay close attention to the surety agency backing the bond, the name of the broker, and the amount. These details should be clear on the certificate and match what the broker stated was in place for his or her business.

Investigating References and Customers

It is also important to ask for business references for any new freight broker you plan to partner with, now and in the future. Business references should be contacted to ensure the work promised was delivered, and that the price and process was fair. You may also want to ask for a resume or a list of successful services rendered for any new freight broker. If a freight broker fails to provide business references, or those references offered do not have helpful information to offer, considering working with a different broker.

Trust Your Gut

The best step you can take in checking the legitimacy of a freight broker is to trust your gut. Checking licensing and registration details, bond certificate information, and business references goes a long way toward ensuring your broker is legitimate, but having a gut instinct about the good – and the bad – of a potential business partner is often a powerful piece of the puzzle. If something feels off about their business history, their terms, or their process, be sure to dig a little deeper until your concerns are mitigated. When all else fails, find a freight broker you trust, who also meets all the requirements above.

Guest post by Eric Weisbrot

Guest post by Eric Weisbrot

Marketing Manager

Eric Weisbrot is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry under several different roles within the company, he is also a contributing author to the surety bond blog.