To understand machine transportation operations, you must know how a freight broker bond works. We’ll explain.
Freight Broker Bond Explained
A freight broker bond is tricky to explain. It’s basically a contractual agreement between three entities: the broker, the government, and a bond agency. The bond acts as an insurance policy for both carrier and customers.
The Federal Motor Carrier Safety Association (FMCSA) mandates that brokers issue a broker bond. Why is the bond so important? It financially protects all involved parties. The bond ensures that you have a means to financially compensate the carrier if, for whatever reason, you cannot honor the contract. Likewise, it also protects customers if their goods don’t arrive on time, that is if their freight remains in transit limbo due to a fault by the broker.
In these scenarios, the carrier or client can file a claim with the bond company. The bond pays the carrier/client, and the broker repays the bond agency. Like insurance, bond rates differ depending on factors, such as credit score.
Only Trust a Broker with a Broker Bond
As mentioned, all brokers are required to issue a broker bond to legally operate. All brokers have to go through a complex logistical process. This includes obtaining public liability insurance, acquiring a BOC-3 form from the FMCSA, etc. Don’t work with a broker that isn’t willing to show proof that it has gone through these steps. It might not be operating legally.
We’re an FMCSA-Approved Broker
Machine Transport has gone through the legal channels. Our broker bond ensures that you’re financially covered in the unlikely event a mishap occurs. Freight broker bonds apply for all carrier and trailer types; it’s a win-win for all parties. Contact us today for a quote.
Federally Licensed Broker Bond for Transportation in North America
Serving the manufacturing industry in the U.S., Canada & Mexico