Freight Broker Bonds (BMC-84)

Freight Broker Bonds (BMC-84) are necessary for operation as a transportation broker, and are a requirement of the Federal Motor Carrier Safety Administration (FMCSA).

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Current Market for Freight Broker Bonds (BMC-84): Due to the significant amount of bond claims with these particular types of bonds, many bonding companies consider Freight Broker Bonds high risk. As a result, most bonding companies in the industry require up to 100% collateral in order to offer this type of guarantee.

About Our Programs: For those who qualify, our agency actually has a number of specialty programs, such as the BMC-84, that allow us to write some bonds with no collateral required. Even though many bonding companies in the industry required 100% collateral for Freight Broker Bonds, our specialty programs and bulk volume often times give us the ability to write these types of bonds with more favorable terms for high risk clients.

Previously referred to as ICC Bond

Freight Broker Bonds used to be referred to as ICC Bonds, as the Interstate Commerce Commission was the old regulating body for freight brokers.

Why is a Surety Bond better than the BMC-85?

The BMC-84 (Freight Broker Bond) is a surety bond, whereas the BMC-85 is a trust fund. While the FMCSA authorizes submittal of the BMC-85 trust fund in place of the BMC-84, it is recommended that brokers only file for the BMC-85 if they are unable to qualify for the surety bond.

BMC-84 Surety Bond: This option requires an annual premium for the bond, and potentially could require collateral if you can't reach the proper markets. However, if a transportation broker can obtain the BMC-84 bond, they certainly should do so because it will free up a significant capital for them to run their business with. Additionally, it will guarantee that the surety company will process any possible claims on the bond.

BMC-85 Trust Fund: With the BMC-85 option, transportation brokers must post the full amount directly to the government in the form of a trust fund, which ties up a fairly significant amount of capital that could otherwise be used to run the company. The way it is designed to work is that the government holds this money in an account, and in the event of a claim they'll pull those funds to pay it. The government entity will process any potential claims, and will likely not have the same incentive that a surety company would have in determining claim validity. The only positive for this option is that just about anyone can obtain it, no matter how poor their credit may be, however the negatives clearly tip the scale in favor of the BMC-84 surety bond option.