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Why Does a Freight Broker Need a Surety Bond?

January 31, 2022 Kevin Baxter


When browsing the market for a good freight broker fit, the term surety bond is likely to come up. That's because to be a licensed freight broker in the U.S., the Federal Motor Carrier Safety Administration (FMCSA) requires a freight broker or freight forwarder maintain a $75,000 surety bond. The reason for the requirement is straight-forward enough: to show shipper and carrier clients that a freight broker will (and is able to) pay legitimate freight bills and to protect against fraud. So not only is it legally required for a freight broker to legitimately operate, it works as financially backed insurance for everyone a freight broker works with.

How much of a bond does a freight broker need?

TIA $250,000 Surety Performance Bond

To be licensed to operate in the U.S., a freight broker or freight forwarder must maintain a $75,000 surety bond. The FMCSA raised this requirement from a $10,000 surety bond in 2013 as part of the MAP-21 law, and the $75,000 requirement has remained since then. Freight brokers can, however, go above and beyond that coverage level, with surety bond options of $100,000 and $250,000 offered by the highly regarded Transportation Intermediaries Association (TIA).

Less than one percent of third party logistics providers (3PLs) are covered at the TIA's $250,000 level, which gives them the TIA Performance Certified designation. This coverage level signifies an especially strong commitment to legitimate business practices and superior service and protection for carriers and shippers.

What does a freight broker bond cover?

A freight broker bond in essence covers carriers and shippers against loss of payment and fraudulent behavior by a freight broker. Since freight brokers are required to maintain a surety bond to maintain a license, it shows clients both legal and financial legitimacy over time. If for whatever reason a freight broker is accused of failure to comply with legal requirements relating to the license, the surety company will investigate any claims, and pay out legitimate ones - providing a level of coverage beyond simply a handshake and trusting a freight broker's word. The best freight brokers with the strongest bond levels must pass credit checks, show insurance information, provide experience in the industry, and show overall solvency as an individual and company.

If you're looking for a freight broker that takes all this seriously, you've come to the right place. InTek Freight & Logistics is among that aforementioned less than 1% of 3PLs at the $250,000, TIA Performance Certified level, so you can rest assured that working with us will be a safe decision and smooth process. Interested in working with us or have questions about freight broker surety bonds? Let us know, and we'll be happy to follow up.

Learn more about what InTek Freight & Logistics does:

If you're ready to take the next step, at InTek Freight & Logistics, we can help. Just tell us what you need and we'll discuss how our expertise can help with the unique shipping challenges your business faces. Rather do a bit more research first? View our Freight Guides for comprehensive articles and eBooks on all things freight and logistics.
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