--- title: "What Is a Freight Broker?" url: https://www.uncap.com/glossary/freight-broker author: "Denis Dyli" published: 2026-10-22 updated: 2026-10-22 summary: "A freight broker is a business that, for compensation, arranges or offers to arrange the transportation of a shipper's freight by an authorized motor carrier. The broker arranges the move and the motor carrier hauls the load. Under US law, a motor carrier, or its employee or agent, is not a broker." --- # What Is a Freight Broker? > A freight broker is a business that, for compensation, arranges or offers to arrange the transportation of a shipper's freight by an authorized motor carrier. The broker arranges the move and the motor carrier hauls the load. Under US law, a motor carrier, or its employee or agent, is not a broker. **Freight broker**: A freight broker is a business that, for compensation, arranges or offers to arrange the transportation of a shipper's freight by an authorized motor carrier. The broker arranges the move and the motor carrier hauls the load. Under US law, a motor carrier, or its employee or agent, is not a broker. ## How it works In federal law, a freight broker falls under the definition of a broker: a person, other than a motor carrier or its employee or agent, that sells, negotiates for, or holds itself out as providing or arranging transportation by motor carrier for compensation. FMCSA's rules for brokers of property call that arranging work brokerage service, and say it can be performed on behalf of a motor carrier, a consignor (the shipper) or a consignee (the receiver). A brokered truck shipment involves these parties: - The shipper (consignor), for example a manufacturer or distributor with freight to move. - The broker, who arranges the move for compensation. - The motor carrier, the authorized trucking company that hauls the load. - The receiver (consignee), who takes delivery. **How a brokered truck shipment moves** ### 1. Arrange, Broker books a carrier For compensation, the broker arranges transportation of the shipper's freight by an authorized motor carrier. ### 2. Haul, Carrier moves the freight The motor carrier transports the load; the broker does not haul it unless separately registered as a carrier. ### 3. Record, Broker keeps the record The broker records the consignor, the carrier, the bill of lading or freight bill number and its compensation. ### 4. Pay, Freight charges settle The record shows any freight charges the broker collected and the date it paid the carrier. ## Registration and the $75,000 bond Under 49 U.S.C. 13901, a person may provide service as a broker for truck transportation only if it is registered to provide that service. Under 49 U.S.C. 13904, the Secretary of Transportation registers a person as a broker if the person has sufficient experience and is fit, willing and able to comply with the rules. A broker may not provide transportation as a motor carrier unless it has registered separately as a motor carrier. Registration also depends on financial security. Under 49 U.S.C. 13906, each broker must provide financial security of $75,000, in the form of a surety bond, trust fund or other security, regardless of how many branch offices or sales agents it has. The security is available to pay claims against a broker that fails to pay freight charges, and registration is suspended if the security falls below the required amount. ## What a broker must record Under 49 CFR 371.3, a broker keeps a record of each transaction for three years, and each party to a brokered transaction has the right to review it. The record shows: - The name and address of the consignor - The name, address and registration number of the originating motor carrier - The bill of lading or freight bill number - The compensation the broker received for the brokerage service, and who paid it - Any freight charges the broker collected, and the date it paid the carrier A broker also may not represent its operations as those of a carrier, and its advertising must show that it is a broker. ## Freight broker vs. freight forwarder A broker arranges transportation that a motor carrier performs. A freight forwarder, as federal law defines it, holds itself out to the public to provide transportation of property: it assembles and consolidates shipments, assumes responsibility for the transportation from receipt to destination, and uses a carrier for some part of the move. The broker sells the carrier's service. The forwarder takes on the move itself. ## Example A building products distributor needs 18 pallets moved from its warehouse to a contractor's yard 600 miles away. It does not run its own trucks, so it books the load with a registered freight broker. The broker arranges an authorized motor carrier, and the carrier picks up the freight against the distributor's bill of lading. In this illustration, the distributor pays $2,400 and the carrier receives $2,100, so the broker's compensation is $2,400 minus $2,100 = $300. The broker's record shows the consignor, the carrier and its registration number, the bill of lading number, the compensation it received and who paid it, and the date it paid the carrier. ## On Shopify You can fulfill an order from your Shopify admin and add a tracking number during fulfillment or after it, and the tracking number appears in the shipping confirmation and shipping update emails. If your carrier isn't fully supported by Shopify, or you select Other as the carrier, you can enter the tracking URL manually. ## How Uncap helps Uncap's [packaging and shipping supplies page](/industry/packaging-shipping-supplies) sets out freight handled as freight: LTL and pallet shipments rated as freight, with class, liftgate, appointment and residential handling, rather than as oversized parcels. ## Related terms - Freight forwarder - LTL freight - Bill of lading - Freight class - 3PL (third-party logistics) - SCAC code ## Sources - 49 U.S.C. 13102, Definitions (Cornell LII) - 49 U.S.C. 13906, Security of motor carriers, brokers and freight forwarders (Cornell LII) - 49 CFR 371.3, Records to be kept by brokers (Cornell LII) ## Frequently asked questions ### What is the role of a freight broker? A freight broker arranges the transportation of a shipper's freight by an authorized motor carrier, for compensation. The carrier hauls the load; the broker finds and books it. ### How does a freight broker make money? A broker is paid compensation for the brokerage service it performs. Federal rules require it to record that amount and who paid it for each transaction, along with any freight charges it collected and the date it paid the carrier. ### How to start a freight brokerage business? A broker must register with the Secretary of Transportation under 49 U.S.C. 13904 and provide $75,000 in financial security, such as a surety bond or trust fund, under 49 U.S.C. 13906. To haul freight itself, it must also register separately as a motor carrier.