The Broker Had a Bond on File. The Carrier Collected $8,000 of $61,000.

Last spring a carrier called me. Small operation, two trucks, owner-operator plus one leased unit. They'd moved 22 loads for a broker over about six weeks — produce runs out of the Carolinas, mostly. Good freight, quick pay history for the first month, then nothing. Invoices going unanswered. Phone disconnected. The broker's FMCSA authority was still active. Bond was on file. The database showed everything green.

Their attorney filed a claim against the bond. By the time they got an answer, the trust fund had been drawn down to $7,900 by other carriers who'd filed before them. The carrier collected $7,900 and wrote off $53,000.

The bond was a BMC-85. And nobody had checked.

What FMCSA Actually Requires

The rule is in 49 CFR § 387.307(a): no broker of general commodities may engage in operations unless it has furnished the FMCSA with a surety bond or trust fund in the amount of at least $75,000. That's it. Bond on file, minimum $75K, authority stays active.

What the regulation doesn't say is that a $75,000 surety bond and a $75,000 trust fund are the same instrument or carry the same collection risk. They're not. They have different mechanics, different backing, and very different outcomes when the broker is insolvent and multiple creditors are lined up.

The form number tells you which one you're looking at. BMC-84 is the surety bond. BMC-85 is the trust fund agreement. Both satisfy § 387.307. Only one of them puts a financially accountable third party between you and an empty bank account.

BMC-84: There's a Surety Company Behind It

A BMC-84 surety bond is issued by a licensed surety company — think a major insurer that writes performance and payment bonds. When a broker files a BMC-84, the surety is the obligor, not the broker. The broker pays a premium (usually a percentage of the $75K face amount, based on the broker's creditworthiness), and the surety guarantees the obligation.

If the broker goes out of business tomorrow with outstanding carrier payables, the surety company is on the hook. Their balance sheet backs the bond, not the broker's operating account. A claim gets paid from an institutional insurer's reserves.

This doesn't mean you get paid instantly. Surety claims require documentation, proof of the underlying debt, and some back-and-forth. But there's an actual counterparty with financial capacity. The question is timing and documentation, not whether the money exists at all.

There's also a self-correcting signal embedded in the BMC-84 process. Surety companies underwrite their exposure. A broker who's financially deteriorating — late on premiums, high chargebacks, disputed accounts — becomes harder to bond. The surety can cancel. When a broker can no longer get a BMC-84, they either go out of business or switch to a BMC-85. More on that in a minute.

BMC-85: The Broker's Own Money, In a Jar

A BMC-85 trust fund agreement is a completely different structure. The broker deposits their own cash or qualified securities into a trust account maintained by a federally insured financial institution. They file a trust agreement with FMCSA showing that the account exists and that the funds are designated as the required financial security.

FMCSA verifies that the agreement was filed. They do not monitor the current account balance.

That $75,000 had to be there when the form was filed. Whether it's still $75,000 a year later — or $40,000, or $8,000 — is not something FMCSA tracks between filing dates. If the trust account agreement is on file and the broker hasn't voluntarily surrendered their authority, the database shows: Bond/Trust Fund Active. Form: BMC-85. Amount: $75,000.

What you can't see from the outside is whether prior claims have already reduced the fund. Multiple carriers filing against the same depleted trust can end up fighting over whatever's left. The carrier who files first, or who has the most aggressive attorney, collects more. The carrier who files last gets nothing, or close to it.

That's what happened to the carrier I described at the start.

The Switch Is the Tell

Here's the signal that experienced broker-screeners learn to read: a broker who had a BMC-84 and switched to a BMC-85 is worth a harder look.

Surety companies review their book. When they start seeing patterns they don't like — cash flow issues, disputes with carriers, unusual churn in the carrier base — they either hike the premium substantially or decline to renew. A broker who can no longer afford or obtain a surety bond doesn't go out of business automatically. They switch to a self-funded trust. FMCSA lets them. The authority stays active.

From the outside, the database just shows BMC-85 is on file. The green light stays on. But the switch itself can be a symptom of financial stress — the surety market did its underwriting and said "not at this price" or "not at all."

I'm not saying every BMC-85 broker is in trouble. Some operations run trust funds from day one and never have a surety bond. A well-capitalized brokerage can run a BMC-85 without any of the above. But I want to know which one I'm looking at, and a BMC-84-to-BMC-85 transition on a broker who's been operating for several years is a pattern worth tracking.

The Shipper Side of This

I've spent most of this post framing the risk from a carrier's perspective, because carriers are the ones who get burned when a broker defaults on freight charges. But shippers have their own exposure here.

After Montgomery v. Caribe Transport II (U.S. Supreme Court, May 2026), the negligent-selection framework for brokers got a lot of attention on the carrier-vetting side. But broker selection carries its own risk surface. A shipper who uses a financially unstable broker — one whose bond is a depleted trust fund, whose surety company dropped them, who's running on fumes — has a different set of problems if that broker disappears with their freight charges or fails to remit to the carrier.

Brokers who can't pay carriers create carrier incentive problems that flow uphill. The carrier whose last four invoices to the broker are unpaid is now running below-cost freight. That changes how they operate, what corners get cut, and whether the driver coming to pick up your load is working on real margins or desperation.

Due diligence on the brokers you use isn't a carrier-only concern. It's supply chain hygiene.

What I Actually Check

When I'm screening a broker — whether I'm a shipper evaluating a new brokerage relationship or a carrier before I accept a load — the first thing I pull is the bond form type and the name of the surety company, if there is one.

If it's a BMC-84, I want to know who the surety is. Not all sureties are equal. A bond backed by a carrier-rated insurer with decades in commercial surety is not the same as a bond from a small regional surety company I've never heard of. AM Best rating matters. I want an A-rated surety minimum on a broker handling significant volume.

If it's a BMC-85, I want to know how long they've been operating under it, and whether their history shows a prior BMC-84. A brand-new broker starting with a BMC-85 isn't alarming on its own — some just go that route. A broker who had a BMC-84 for three years and switched twelve months ago needs an explanation before I move freight with them.

I also look at the filing history. Has the bond lapsed and been reinstated? That's a story. FMCSA records prior lapses in the L&I database. A bond that went inactive and came back is worth understanding.

DOTScreener surfaces the bond form, the surety company name on BMC-84s, the current status, and any prior lapse history in the broker screening file. I built that specifically because the FMCSA database gives you the form type and the face amount, but piecing together the full picture — the surety's identity, the lapse history, how long they've held authority — requires pulling from multiple places. I wanted it in one place and logged.

How I Document This

When I screen a broker, the carrier file should show:

• Bond form type: BMC-84 or BMC-85, captured from the FMCSA L&I data at the time of screening
• Surety company (BMC-84 only): name and, if you're running a significant volume relationship, their AM Best rating at the date of screening
• Authority grant date: how long they've been active under current authority
• Prior lapses: any bond/trust inactivity visible in the L&I history
• Prior form type (if changed): date of transition from BMC-84 to BMC-85, if applicable

This takes about four minutes to document. It's the difference between "we verified they were bonded" and "we verified what kind of bond, who backs it, and whether they've had prior financial disruptions."

If you're ever deposed on why you used a broker who defaulted, "we checked and the bond was active" is not the same answer as "we checked the form type, the surety company, and the lapse history, and documented all three." The second answer sounds like due diligence. The first sounds like you checked a box.

One difference, four minutes.

— Mason Lavallet

Founder, DOTScreener.com