Common, contract, and broker authority — explained
Operating authority is the legal license that allows a carrier or broker to transact freight in interstate commerce. The federal regulator issues several types, and carriers can hold one or more at the same time. This guide explains what each type allows, when revocation matters, and how to read authority history during verification.
Quick Answer
The federal regulator issues four primary types of operating authority: Common Carrier (for-hire, general public), Contract Carrier (for-hire, specific shippers under contract), Broker (arranges transportation, does not own equipment), and Freight Forwarder (consolidates and re-ships freight). A motor carrier can hold both Common and Contract authority. A Broker holding only Broker authority cannot legally haul freight. Status must be 'active' for any authority to be valid for tender.
- Common Carrier — hauls for the general public on regulated terms
- Contract Carrier — hauls for specific shippers under contract
- Broker — arranges transportation, never touches the freight
- Freight Forwarder — accepts freight, consolidates, re-ships
Common Carrier authority
A Common Carrier ("Authorized For Hire" in regulatory terminology) is a motor carrier authorized to haul freight for the general public, at published or negotiated rates, on terms that are generally available to any shipper. Most truckload carriers brokers work with hold Common Carrier authority.
Key implications: Common Carriers must accept any reasonable load offer (in theory), publish their rates upon request, and operate under a "duty of care" that is higher than a private hauler. In practice, most modern Common Carriers operate under one-off rate confirmations rather than published tariffs — but the regulatory framework still applies.
Contract Carrier authority
A Contract Carrier is a motor carrier authorized to haul freight only for shippers with whom they have a continuing contract. The carrier-shipper relationship is the basis of the authority — without a contract, a Contract Carrier has no business basis for hauling that shipper's freight.
Many large carriers hold both Common and Contract authority. Contract authority gives them flexibility on dedicated lanes (where they negotiate with a specific shipper) while Common authority lets them pick up backhauls and spot freight from any source.
Contract vs Common — does it matter for brokers?
For day-to-day tendering, it usually does not. If the carrier holds either Common or Contract authority (or both) and is active, you are clear to tender. The distinction matters more for shippers — a Contract Carrier without a written contract with that shipper is technically outside their authority.
Freight Forwarder authority
Freight Forwarders accept freight, consolidate it, and re-ship it under their own bill of lading. They differ from brokers in that they take legal possession of the freight (a broker never does). Freight Forwarders typically operate at scale — consolidation centers, warehouse hubs, and multi-stop distribution.
Most truckload brokers will encounter Freight Forwarders rarely. The FF authority is more common in LTL and parcel logistics, where consolidation is a core part of the business model.
What "revoked" and "inactive" actually mean
The federal regulator can take authority away for several reasons. The vocabulary matters:
- REVOKED — authority terminated by the regulator, usually for non-payment or insurance lapse. Reinstatement is possible but requires re-filing and clearing the original issue.
- RESCINDED — authority withdrawn before it took effect (typically during the initial filing window). Rare to see on established carriers.
- INACTIVE — voluntary withdrawal by the carrier. Typically used when a carrier shuts down operations.
- OUT-OF-SERVICE (OOS) — the regulator has placed the carrier on a temporary operating prohibition, usually after a safety review. The carrier cannot legally operate any vehicles in interstate commerce until OOS is lifted.
OOS is the strongest negative signal
A carrier in "OUT-OF-SERVICE" status is not legally allowed to haul. Authority being "active" with a populated OOS date does not save them. If you see an OOS flag, do not tender.
Pro Tips
- Check authority status before insurance. Without active authority, the carrier cannot haul — no point checking insurance on a revoked authority.
- Look at the granted date. A carrier whose authority was granted last week and whose USDOT is old is a reactivated carrier. Treat as new until you verify the principals are the same.
- Broker-only authority means no hauling. If the rate-confirmation party has only Broker authority (no Motor Carrier authority), they cannot legally take possession of freight. Watch for this in carrier packets.
Frequently Asked Questions
Can one company hold all four authorities?
Yes, in theory. Some larger logistics companies hold Common, Contract, and Broker authority simultaneously, with Freight Forwarder authority added if they operate consolidation hubs. Each authority is a separate federal filing with its own insurance/bond requirements.
Is broker authority required to broker freight?
Yes. Anyone arranging the transportation of regulated freight in interstate commerce for compensation must hold Broker authority. Operating as an unlicensed broker is the underlying federal violation in many double-brokering enforcement cases.
How much does an MC number cost?
Federal application fees are modest (~$300 for Motor Carrier authority, similar for Broker). The total cost is higher when you add the surety bond ($75,000 face value, typically 1-3% premium for brokers) and required insurance for motor carriers ($750,000 liability minimum). Total first-year cost for a Broker is typically several thousand dollars.
Can a revoked authority be reinstated?
Usually yes, depending on the reason for revocation. Insurance-lapse revocations can be reinstated by re-filing insurance and paying any back fees. Safety-driven revocations may require a Compliance Review or Corrective Action Plan. Reinstatement does not always restore the original MC number's history — and the timing of reinstatement is one of the strongest signals in identity-flip fraud detection.
What is the difference between authority and registration?
Registration (USDOT number) covers safety — every commercial motor carrier subject to federal safety regulation gets one, regardless of for-hire vs private status. Authority (MC, FF, Broker) covers commercial activity — only for-hire interstate operations of regulated freight need it. A private fleet hauling its own goods has a USDOT but does not need an MC.
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