Freight broker glossary
Plain-English definitions of the terms every freight broker needs to know. FMCSA forms, carrier vetting concepts, insurance lines, litigation theory. 30 terms.
3PL (Third-Party Logistics provider)
A 3PL is a company providing outsourced logistics services that may include freight brokerage, warehousing, fulfillment, transportation management, and other supply chain functions.
Additional insured (endorsement)
Additional insured is an endorsement on an insurance policy that extends coverage from the named insured to a third party, typically required by contract between a shipper, broker, or carrier.
Alert status (CSA)
Alert status is the FMCSA SMS flag indicating a carrier's percentile score in a BASIC category exceeds the threshold for that carrier's freight class (65th percentile for general property, 60th for hazmat and passenger).
BASIC categories
BASICs (Behavior Analysis and Safety Improvement Categories) are the seven categories FMCSA uses to score motor carrier safety performance in the CSA program.
BMC-84
BMC-84 is the surety-bond form a freight broker files with FMCSA to satisfy the $75,000 federal financial responsibility requirement.
BMC-85
BMC-85 is the trust-fund alternative to the BMC-84 surety bond for satisfying the $75,000 federal financial responsibility requirement for freight brokers.
BOC-3
BOC-3 is the FMCSA form on which a freight broker designates a process agent in every state where the broker arranges shipments.
Broker bond ($75,000 federal surety)
The freight broker bond is the $75,000 federal financial responsibility requirement FMCSA mandates for every property broker, satisfied via BMC-84 surety bond or BMC-85 trust fund.
CDL (Commercial Driver's License)
A CDL is the license required to operate commercial motor vehicles above defined weight and passenger thresholds. CDLs include class designations (A, B, C) and endorsements for specific cargo types or vehicle configurations.
Contingent auto liability insurance
Contingent auto liability is third-party bodily injury and property damage coverage that responds when a motor carrier's primary auto policy fails to pay a claim arising from a load arranged by the broker.
Contingent cargo insurance
Contingent cargo is insurance that responds when a motor carrier's cargo coverage fails to make a shipper whole for cargo loss or damage on a load arranged by the broker.
CSA scores
CSA scores are the percentile-ranked performance measures FMCSA publishes for motor carriers across seven behavioral categories called BASICs, drawn from roadside inspection and crash data.
DOT number
A DOT number is the unique identifier assigned by USDOT to companies operating commercial vehicles in interstate commerce, used to track safety information.
Double-brokering
Double-brokering is the practice (often fraudulent) of a carrier or broker re-brokering a load they accepted from another broker without authorization, typically to a downstream carrier at a discounted rate while pocketing the spread.
FAAAA (Federal Aviation Administration Authorization Act of 1994)
The FAAAA is the 1994 federal statute that historically preempted most state-law claims related to a freight broker's prices, routes, or services, until the Supreme Court's 2026 Montgomery v. Caribe Transport ruling carved out negligent-hiring claims under a safety exception.
FMCSA (Federal Motor Carrier Safety Administration)
FMCSA is the agency within the U.S. Department of Transportation that regulates motor carriers, freight brokers, and freight forwarders operating in interstate commerce.
Freight broker
A freight broker is a licensed intermediary that arranges the transportation of freight between shippers and motor carriers without taking possession of the cargo or operating the equipment.
FreightGuard
FreightGuard is the broker-to-broker complaint database maintained by Carrier411, aggregating broker-submitted reports of carrier issues including double-brokering, identity fraud, and safety concerns.
Hazmat endorsement (CDL H endorsement)
The hazmat endorsement is the CDL designation required to operate commercial vehicles transporting placarded amounts of hazardous materials, obtained through a TSA background check and a written knowledge test.
Identity fraud (in freight brokering)
Identity fraud in freight brokering is the impersonation of a legitimate motor carrier (or broker) using stolen or cloned MC numbers, email addresses, phone numbers, or business identities to fraudulently book loads.
MC number (Motor Carrier number)
An MC number is the operating authority registration number FMCSA issues to motor carriers, brokers, and freight forwarders authorized to operate in interstate commerce.
Motor carrier
A motor carrier is a company that operates commercial motor vehicles transporting freight or passengers, holding FMCSA operating authority and meeting federal safety, insurance, and registration requirements.
MVR (Motor Vehicle Record)
An MVR is a state-issued report of a driver's license status, violations, accidents, and endorsements, used to evaluate driver risk in commercial motor carrier and broker contexts.
Negligent hiring (broker liability theory)
Negligent hiring in the broker context is a state-law tort claim alleging that a freight broker selected a motor carrier the broker knew or should have known was unsafe.
OP-1(P)
OP-1(P) is the FMCSA application form a freight broker files to obtain property broker operating authority.
Reefer breakdown
Reefer breakdown is a failure of a refrigerated trailer's temperature-control system causing cargo loss or contamination; cargo insurance often excludes breakdown losses without a specific endorsement.
SAFER (Safety and Fitness Electronic Records)
SAFER is the FMCSA public-facing carrier lookup system that displays motor carrier registration, operating authority status, insurance, and safety rating.
Shipper
A shipper is the party that owns the freight and tenders it to a freight broker or motor carrier for transportation.
SMS (Safety Measurement System)
SMS is the FMCSA public-facing system that displays CSA BASIC percentile scores and alert status for motor carriers.
Surety bond
A surety bond is a three-party agreement in which a surety company guarantees payment from one party (the principal) to another (the obligee) up to a specified amount.