Broker Authority vs Carrier Authority

Two Distinct Authority Types

FMCSA issues operating authority to two fundamentally different types of entities in the freight transportation industry: motor carriers that physically move freight using their own equipment and drivers, and freight brokers that arrange for the transportation of goods without taking physical possession. While both require federal registration and an MC number, the legal obligations, insurance requirements, and operational scope differ significantly. Understanding these differences is critical whether you are starting a new business or expanding existing operations.

Carrier Authority (Motor Carrier of Property)

Motor carrier authority permits you to physically transport freight in interstate commerce using commercial motor vehicles. Key requirements and characteristics include:

Requirements

• USDOT number -- Required for all interstate carriers
• MC number -- Obtained through the OP-1 application
• Public liability insurance -- Minimum $750,000 for general freight (BMC-91 or BMC-91X filing)
• Cargo insurance -- While not federally mandated for most freight (except HHG), shippers typically require it
• BOC-3 process agent designation -- Required in all states
• UCR registration -- Annual Unified Carrier Registration

Operational Responsibilities

• Comply with all FMCSA safety regulations (HOS, drug testing, driver qualifications, vehicle maintenance)
• Subject to roadside inspections and compliance reviews
• Must maintain SMS safety data (visible through carrier search)
• Enter the new entrant safety assurance program for 18 months

Broker Authority (Property Broker)

Broker authority permits you to arrange transportation of freight between shippers and carriers for compensation, without transporting the freight yourself. Key requirements include:

Requirements

• USDOT number -- Required for registration
• MC number -- Obtained through the OP-1 application (broker section)
• Surety bond or trust fund -- Minimum $75,000 (BMC-84 surety bond or BMC-85 trust fund agreement)
• BOC-3 process agent designation -- Required in all states
• UCR registration -- Annual registration at the base fee level

Operational Characteristics

• No vehicles or drivers -- Brokers do not need to own or operate trucks
• No FMCSA safety regulations -- HOS, drug testing, and vehicle maintenance rules do not apply to brokers
• No safety rating or SMS scores -- Brokers are not subject to safety measurement
• Contractual liability -- Brokers are responsible for carrier selection and may face claims for negligent hiring

Can You Hold Both?

Yes. Many companies hold dual authority as both a motor carrier and a freight broker. This allows them to haul freight on their own trucks when capacity and rates are favorable, and broker loads to other carriers when it makes business sense. Each authority type must be applied for separately and has its own insurance and bond requirements. The carrier authority and broker authority will have different MC numbers but share the same USDOT number.

Choosing the Right Path

Your choice depends on your business model:

• Choose carrier authority if you plan to own or lease trucks and hire drivers to physically move freight
• Choose broker authority if you want to match shippers with carriers and earn a margin without operating equipment
• Choose both if you want maximum flexibility to haul and broker freight

Review all FMCSA authority types for a complete overview. Visit the TruckCodes knowledge base for application guides and use the startup checklist to track every filing requirement for your chosen authority type.