---
title: "Freight broker"
url: https://carrierkyc.com/glossary/freight-broker
description: "A freight broker is a company registered with FMCSA that, for compensation, arranges truck transportation of other people's freight by authorized motor carriers without hauling it."
---

# Freight broker

**Definition:** A freight broker is a company registered with FMCSA that, for compensation, arranges truck transportation of other people's freight by authorized motor carriers without hauling it.

Also called: Broker, Property broker. Category: FMCSA & freight.

FMCSA defines a broker as a person who, for compensation, arranges or offers to arrange transportation of property by an authorized motor carrier (49 CFR 371.2). Brokers need broker operating authority, a $75,000 [BMC-84](https://carrierkyc.com/glossary/bmc-84) bond or [BMC-85](https://carrierkyc.com/glossary/bmc-85) trust, and process agents in each state where they have offices or write contracts.

Brokers must keep a record of each transaction for 3 years, including the carrier, the bill of lading or freight bill number, the compensation received and the freight charges paid to the carrier, and each party to the transaction has the right to review it (49 CFR 371.3). That right can help a factor or carrier resolve a disputed load.

In freight factoring, the broker is usually your [account debtor](https://carrierkyc.com/glossary/account-debtor). Underwriting focuses on its credit and [days-to-pay](https://carrierkyc.com/glossary/days-to-pay), its authority and bond status, and whether the contacts you are dealing with really belong to it.

> **Red flag: Red flags** Broker authority granted recently, with large loads. A pending bond cancellation. Contacts that don't match the broker's own website. See [how to verify a freight broker](https://carrierkyc.com/guides/how-to-verify-a-freight-broker).

## Related

- [Account debtor](https://carrierkyc.com/glossary/account-debtor)
- [BMC-84 surety bond](https://carrierkyc.com/glossary/bmc-84)
- [Double brokering](https://carrierkyc.com/glossary/double-brokering)
- [How to verify a freight broker before you fund their loads](https://carrierkyc.com/guides/how-to-verify-a-freight-broker)
- [Broker credit checks and days-to-pay for freight factors](https://carrierkyc.com/guides/broker-credit-and-days-to-pay)

## Sources

- [49 CFR 371.2: Definitions (broker)](https://www.ecfr.gov/current/title-49/section-371.2) (eCFR)
- [49 CFR 371.3: Records to be kept by brokers](https://www.ecfr.gov/current/title-49/section-371.3) (eCFR)
- [49 CFR 387.307: Property broker surety bond or trust fund](https://www.ecfr.gov/current/title-49/section-387.307) (eCFR)