In researching companies for auto shipping, or remodeling, or mechanics, you may have heard of the terms ‘licensed and bonded’. We are going to explore what a bond is in auto shipping, and the background for them. In short, a bond ensures people get paid who are supposed to be paid.
A bond company's commitment to pay a first party if a second party fails to satisfy its obligations is known as a surety bond. Motor carriers, freight forwarders and broker authorities must have specific surety bonds on file before FMCSA checks that out and issues a license.
Government agencies are the most common obligees, although professional and commercial parties can also use them. Providing clients with assurances that they will receive the service or product they have requested, is one of the ways surety bonds may assist principals.
The FMCSA is a federal agency that regulates, licenses, monitors and ensures compliance with the United States Motor Carrier Safety and Commercial Regulations. The requirement is federal due that it applies to individuals and other organizations among the US territory.
Before getting a freight broker license, the Federal Motor Carrier Safety Administration (FMCSA) requires freight brokers and freight forwarders to post a $75,000 surety bond. This will guarantee that responsibilities are satisfied, or in the event of a loss, that owed parties are compensated for the commitments not met.
All potential freight brokers must register with the FMCSA before obtaining a surety bond. Submitting for one is a simple process:
It is a very straight forward process. Any car mover should be set up with these things. It is really the minimum to be able to begin serving customers.