SMALL ENTITY COMPLIANCE GUIDE FOR BROKER

SMALL ENTITY COMPLIANCE GUIDE

FOR BROKER OPERATIONS

49 CFR §371 and Other Applicable

Regulations and Statutes

January 31, 2012

NOTICE

Small Entity Compliance Guides are prepared pursuant to Section 212 of the Small Business

Regulatory Enforcement Fairness Act of 1996 (“SBREFA”), Pub. L. 104-121. The statements in this

document are intended solely as guidance to aid in complying with the associated rule. The material

contained in this document is neither mandatory nor regulatory in nature and does not constitute a

regulation. It describes an acceptable means, but not the only means, to demonstrate compliance with

applicable regulations. The Federal Motor Carrier Safety Administration (FMCSA) will consider

other methods of demonstrating compliance that any person subject to the associated rule elects to

present. Terms such as “must” and “will” are used to indicate regulatory requirements when an

acceptable method of compliance is described in this document.

In any civil or administrative action against a small business for a violation of a rule, the content of

its Small Entity Compliance Guide may serve as evidence to indicate the degree to which the

proposed fines and penalties are considered reasonable and appropriate. This guide may not apply in

a particular situation based upon circumstances, and FMCSA retains the discretion to adopt

approaches on a case-by-case basis that differ from this guide where appropriate. Any decisions

regarding a particular broker will be made based on the statute and regulations. Therefore, interested

parties are free to raise questions and objections about the substance of this guide and the

appropriateness of its application in a particular situation. The FMCSA will consider whether the

recommendations or interpretations in the guide are appropriate in that situation. The FMCSA may

decide to revise this guide without public notice to reflect changes in its approach to implementing a

rule or to clarify and update text. To determine whether FMCSA has revised this guide, contact the

Commercial Enforcement Division at 202-366-3031.

CONTENTS

Background

Purpose

Overview of Broker Operations Regulated by FMCSA

Interacting with Other Transportation Operations

The Application Process to Obtain Broker Authority

The FMCSA Review of Broker Applications

Broker Authority Application Process Illustrated

Brokering and Financial Responsibility

Requirements for All Brokers

Records to be Kept by Brokers, 49 CFR §371.3

Understanding and Avoiding Misrepresentation in Compliance with

Regulation, 49 CFR §371.7

Accounting Requirements in Compliance with Regulation, 49 CFR

§371.13

New Requirements for Household Goods Brokers

Exemption from the HHG Broker Regulations

Doing Business Only with Motor Carriers Having Valid USDOT

Numbers and Operating Authority, 49 CFR §371.105

Required Information in Your Advertisements and on Your Web site

Homepage, 49 CFR §371.107

Information Household Goods Brokers Must Provide to All Potential

Individual Shippers, 49 CFR §371.109

Providing Federal Consumer Protection Information to Potential

Individual Shippers, 49 CFR §371.111

Providing Estimates to Individual Shippers, 49 CFR §371.113

Written Agreements with Motor Carriers before Providing Written

Estimates, 49 C.F.R §371.115

Providing Individual Shippers with the Policies of Your Brokerage

Concerning Cancellation, Deposits, and Refunds, 49 CFR §371.117

Consequences of Noncompliance with the Regulations, 49 CFR

§371.121

Further Assistance

Appendix A – Exempt Commodities

Background

Brokers are unique to the transportation industry. They do not operate trucks or employ drivers but

play a role in the shipment of a variety of commodities. Brokers engaged in interstate commerce are

regulated by FMCSA and are subject to several Federal statutes and regulations, in particular 49 CFR

§371. Brokers are required to register with FMCSA, maintain process agents to accept legal service,

and establish and maintain appropriate coverage for financial liability. Brokers also have

administrative and financial recordkeeping requirements. Brokers are prohibited from

misrepresenting themselves as motor carriers or as anything other than providers of brokerage

services registered with FMCSA.

In response to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for

Users (SAFETEA-LU) and a petition by the American Moving and Storage Association (AMSA), the

FMCSA amended §371 and other regulations. These amendments specify requirements for brokers

of household goods, addressing consumer protection, financial liability coverage, and business

practices. Additionally, in the future FMCSA will assign U.S. Department of Transportation

(USDOT) numbers, in addition to Motor Carrier (MC) numbers, to all brokers to better identify them.

Purpose

This guide will help brokers of both property and household goods to comply with §371 and other

applicable regulations and statutes. It will help established brokers already registered with FMCSA,

and persons new to brokering understand recent changes in §371. It will also explain the process of

applying for operating authority and an MC number, as well as the consequences of failing to comply

with the regulations.

Overview of Broker Operations Regulated by FMCSA

A broker regulated by the USDOT is defined at 49 U.S.C. §13102(2):

BROKER - The term “broker” means a person, other than a motor carrier or an employee or

agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself

out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation

by a motor carrier for compensation.

A broker is further defined in the Federal regulation at 49 CFR §371.2(a):

Broker – means a person who, for compensation, arranges, or offers to arrange, the

transportation of property by an authorized motor carrier. Motor carriers, or persons who are

employees or bona fide agents of carriers, are not brokers within the meaning of this section when

they arrange or offer to arrange the transportation of shipments which they are authorized to transport

and which they have accepted and legally bound themselves to transport.

As a transportation broker, you will be connecting shippers who need to move their commodities

with carriers that can transport them. Connecting the shippers and the carriers is arranging

transportation. If you are compensated for the service, then you are brokering. If you arrange the

interstate transportation, by a motor carrier, of a commodity for a shipper, then you are regulated by

FMCSA and are required by Federal statute, at 49 U.S.C. §13904, to register with the USDOT. To

be registered, FMCSA must grant you authority to operate as a broker. Registration also is referred

to as “authority”, “operating authority”, or “being authorized.” All brokers regulated by FMCSA are

required to use the services of authorized motor carriers. An authorized motor carrier has been

granted authority to operate interstate and is validly registered by FMCSA.

There are two classifications of regulated brokers: property or freight brokers and household goods

brokers. Each classification requires a specific registration or authority.

A property broker may arrange transportation of a variety of regulated commodities other than

household goods. Property brokers may arrange transportation for commodities such as automobiles,

electronics, or machinery.

A household goods broker can arrange transportation for shipments of household goods only.

Household goods regulated by FMCSA are defined at 49 CFR §375.103 as:

Household Goods, as used in connection with transportation, means personal effects,

property used, or to be used, in a dwelling, when part of the equipment of the dwelling.

Transportation of household goods must be arranged and paid for by the individual shipper or by

another individual on behalf of the shipper. Household goods includes property moving from a

factory or store if purchased with the intent to use in a dwelling, and transported at the request of the

householder who also pays the transportation charges. Household goods brokers regulated by

FMCSA are defined at 49 CFR §371.103 as:

Household Goods Broker means a person, other than a motor carrier or an employee or a

bona fide agent of a motor carrier, that as a principal or agent sells, offers to sell, negotiates for, or

holds itself out by solicitation, advertisement, or otherwise sells, provides, or arranges for,

transportation of household goods by a motor carrier for compensation.

As a broker, you may arrange transportation of all regulated commodities (property and household

goods) provided that you obtain the appropriate authorities to arrange transportation for both. If you

are a broker registered by FMCSA to arrange transportation for shipments of freight and you want to

expand your business to include arranging transportation for shipments of household goods, then you

must apply to FMCSA to obtain additional authority as a household goods broker. The same holds

true if you are registered as a household goods broker and wish to expand your business to arrange

transportation for regulated freight. You must apply to the FMCSA to obtain additional authority as a

property broker.

Interacting with Other Transportation Operations

When doing business as a broker, you will work with other transportation operations that may or may

not be subject to FMCSA’s regulations, such as motor carriers, bona fide agents, and freight

forwarders.

Motor carriers make brokering possible and are defined by regulation at 49 CFR §390.5 as:

Motor Carrier means a for hire motor carrier or private motor carrier. The term includes a

motor carrier’s agents, officers, and representatives, as well as employees responsible for hiring,

supervising, training, assigning, or dispatching of drivers and employees concerned with the

installation, inspection, and maintenance of motor vehicle equipment and/or accessories. For

purposes of subchapter B (of Title 49, C.F.R.), this definition includes the terms employer and

exempt motor carrier.

There are several types of motor carriers; some are not regulated by FMCSA. With a few exceptions,

intrastate motor carriers which operate only within the boundaries of a single state usually do not fall

within the jurisdiction of FMCSA. Some hazardous materials motor carriers, depending on the

hazardous materials transported, are subject to FMCSA regulations even if they only operate within

the boundaries of one state. Private property motor carriers (or private motor carriers) with trucking

operations that are incidental to other businesses, are subject to FMCSA safety regulations but

usually do not require operating authority. A truck that is operated by a retailer to deliver its products

to its consumers is an example of private property motor carriage.

For hire motor carriers that operate in interstate or foreign commerce, between states or between the

United States and other countries, are subject to FMCSA safety and commercial regulations,

including the requirement to obtain operating authority. There are exceptions, including, but not

limited to, motor carriers that are agents for other motor carriers, and motor carriers that are leased to

other motor carriers. Both agents and leased operations act under the authority of the motor carriers

that employ them. As long as they are subordinate and are operating under the authority of other

motor carriers, they are not required to have independent operating authority.

As a broker, you work with for hire property and/or household goods motor carriers, depending on

your authority. As a broker, you are required to arrange transportation using authorized motor

carriers. You may not arrange transportation with a motor carrier that does not have the appropriate

operating authority granted by FMCSA. Remember, if you have authority as a property or freight

broker, then you can only arrange transportation for motor carriers that have valid property motor

carrier authority. If you have authority as a household goods broker, then you can only arrange

transportation for motor carriers that have valid household goods motor carrier authority.

Bona fide agents appear similar to brokers and leased motor carriers in operation but are defined by

regulation at 49 CFR §371.2(b) as:

Bona fide agents – are persons who are part of the normal organization of a motor carrier and

perform duties under the carrier’s directions pursuant to a preexisting agreement that provides for a

continuing relationship, precluding the exercise of discretion on the part of the agent in allocating

traffic between the carrier and others.

A bona fide agent is an extension of the motor carrier. It has a preexisting written agreement with the

motor carrier, and it is considered to act on behalf of that motor carrier. A bona fide agent works for

its motor carrier and transports or otherwise handles shipments under its motor carrier’s operating

authority.

The relationship between motor carriers and bona fide agents may appear similar to the relationship

between motor carriers and brokers. Brokers, although they have business relationships with motor

carriers consummated with written agreements, are independent of the motor carriers. There may

come a time when you are arranging transportation for a motor carrier, but the shipment is

transported by one of its bona fide agents. If shipments that you arrange as a broker are transported

by bona fide agents, then the identity of the motor carrier for whom they are working must be clear,

and the motor carrier must have valid authority.

Occasionally, you may have dealings with freight forwarders. The operations of freight forwarders

are unique. Freight forwarders are defined by statute at 49 U.S.C. §13102(8) as:

Freight Forwarder – The term freight forwarder means a person holding their self out to the

general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of

property for compensation and in the ordinary course of its business and

(A) Assembles and consolidates or provides for assembling and consolidating of shipments

and performs or provides for break-bulk and distribution operations of shipments;

(B) Assumes responsibility for the transportation from the place of receipt to the place of

destination; and

The term does not include a person using transportation of an air carrier subject to part A of subtitle

VII (49, U.S.C. Chapters 401-465 – Air Commerce and Safety).

Freight forwarders are required to have operating authority from FMCSA, if their businesses involve

interstate commerce. What makes freight forwarders similar to motor carriers is that they may

employ drivers and operate equipment as motor carriers to transport property. Freight forwarders are

different from motor carriers in the way they handle the commodities they transport.

A motor carrier transports a shipment from a specific point of origin to a specific destination. For

example, a motor carrier is employed to transport a shipment or 1,000 pounds of paper from Wausau,

Wisconsin, to Fort Wayne, Indiana. A motor carrier can handle multiple shipments, but each

shipment has a specific origin and destination. When a shipment moves from point to point, the

motor carrier’s only role is to transport it.

Freight forwarders may receive multiple shipments from multiple points of origin and combine those

shipments into one shipment going to a single destination. Freight forwarders also may take a single

shipment from a single point of origin and break it into multiple shipments going to single or multiple

destinations. Freight forwarders also may employ motor carriers to accomplish that task. Freight

forwarders, in addition to transporting property, offer other logistical services for shippers by

coordinating the composition and movement of their shipments.

As an example, a freight forwarder receives a shipment of 30,000 pounds of clothing from a factory

in Greensboro, North Carolina. That shipment is separated by the freight forwarder into three

10,000-pound shipments to be transported to destinations in Illinois, New York, and California.

After separating the shipments, the freight forwarder employs a motor carrier to transport one

shipment from North Carolina to California. The shipment to California is transported under the

authority of the freight forwarder.

The Application Process to Obtain Broker Authority

The rules governing applications for operating authority are stated in regulations, 49 CFR §§365 and

366. The process to obtain operating authority as a broker begins with FMCSA’s application for

Motor Property Carrier and Broker Authority Form (OP-1). The OP-1 form can be downloaded as a

Portable Document Format (PDF) file from FMCSA’s Web site at

http://www.fmcsa.dot.gov/forms/print/r-l-forms.htm.

You also have the option to file your OP-1 application online. You can apply online at

http://www.fmcsa.dot.gov/online-registration. This method is highly recommended. You can follow

step-by-step instructions to assist you in completing the online OP-1 form for the appropriate broker

authorities.

Once downloaded, the OP-1 form allows you to input the required information directly on the form

from your computer and then print it out. If you prefer, you can print out a blank form and input the

information manually. If access to FMCSA Web site is not available to you, then you can request an

OP-1 form packet be sent to you by U.S. Mail by contacting us at 800-832-5660. Once completed,

you may submit the form via U.S. Mail. The OP-1 form comes with instructions to assist you

completing and submitting the form.

There is an initial application fee of $300.00 for each authority request. The fee is non-refundable. If

you file by First Class U.S. Mail, then you may submit a check or money order, in U.S. dollars,

payable to FMCSA to FMCSA P.O. Box 530226, Atlanta, GA 30353-0226. If you choose to send it

by Express U.S. Mail, then the address is Bank of America, Lockbox Number 530226, 1075 Loop

Road, Atlanta, GA 30337. If you file online, then you submit payment using a credit or debit card.

A very important part of your application is proof of Financial Responsibility. Financial

Responsibility is protection of your business against liability. All are required to have either a Surety

Bond or a Trust Fund as Financial Responsibility. Proof of financial responsibility is a condition to

obtaining and maintaining operating authority. Without it you will not be granted authority as a

broker. As a broker, the you submit a Property Brokers Surety Bond (Form BMC-84) as proof of a

surety bond covering your business or a Property Brokers Trust Fund Agreement (Form BMC-85) as

proof of a trust fund.

Another important part of your application for broker authority is the Form BOC-3, Designation of

Agent for Service of Process (often referred to as a process agent). A process agent is an individual

who will accept legal process on your behalf and forward it to you for response. Brokers are required

to designate a process agent for each State where they have offices or write contracts, as stated in 49

CFR §366.4(b). For example, if your brokerage resides in Pennsylvania and you have offices in

Maryland and Delaware, you must designate process agents in all three states to be in compliance

with the regulation. Furthermore, if you have written agreements or contracts with motor carriers in

Virginia and New York, then you must designate a process agent in those two states, as well.

You are ready to apply for broker authority when you have completed the OP-1 Form, BMC-84 or 85

Form, and BOC-3 Form. Be sure to check the forms for accuracy before you submit them. Errors

and omissions can delay the processing of your application, ultimately delaying the granting of your

authority.

The FMCSA Review of Broker Applications

After your application for broker authority has been submitted, it will be reviewed by FMCSA staff.

The Federal regulation at 49 CFR §365.109 requires that FMCSA staff review your application for

correctness, completeness, and adequacy of the evidence that you, as a broker, have the required

amount of financial responsibility and are fit, willing, and able to comply with all applicable statutes

and regulations.

Minor errors found on your application may be corrected while going through the review process;

however, incomplete applications will be rejected. Rejection of your application will delay the

issuance of your operating authority. It is imperative that, before you file your application, you check

the form and ensure that all the information is accurate, and that the form is complete. Closely follow

the instructions that come with the OP-1 form, or as you submit the OP-1 form online.

Applicants for household goods broker authority have to go through an additional step in the review

process. To better protect consumers from deceptive business practices in the industry, applicants for

household goods broker authority undergo vetting. Information submitted by the applicant is closely

examined, and in many cases verified to ensure that the applicant has not evaded accountability for

non-compliance with Federal regulations by using the name of another company. Vetting can take up

to ten weeks. If you are applying for authority as a household goods broker, it is very important that

you ensure that your application is accurate, including avoiding any omissions on the application.

The discovery of omitted information during vetting could result in rejection of the application.

If the FMCSA review of your application finds it acceptable, then a notice of the application will be

posted in the FMCSA Register. If you have not done so during the application process, you must

submit a Form BMC-84, evidence that your brokerage is covered by a surety bond of $10,000 or

$25,000, depending on type of brokerage, property or household goods. A Form BMC-85 is the

required evidence that your brokerage is covered by a trust fund of $10,000 or 25,000 before

authority may be granted.

After a summary of your application for authority is posted in the FMCSA Register, any person who

opposes the approval of your application, on the grounds that you are not fit, willing, and able to

comply with FMCSA’s regulations, has 10 days from the date of publication in the FMCSA Register

to file a protest. If no one opposes the application, then a certificate will be issued making it

effective.

BROKER AUTHORITY APPLICATION PROCESS ILLUSTRATED

Applicant starts

by completing

and submitting

the OP-1

Application Form

($300 fee paid)

Complete and

submit form online

Complete form

manually submit

via US Mail

Docket

Number is

issued

Application

is reviewed

by FMCSA

Application is incomplete or has serious errors and is

rejected – Start Over

Application passes

review (and Vetting

if HHG Broker) and

is posted on the

FMCSA Register

BMC-84 Surety

Bond or BMC -85

Trust Fund form is

filed with FMCSA

BOC-3 Process

Agent form is filed

with FMCSA

10 Day Period to

receive protests

against

application

Authority becomes effective when

certificate is issued

A protest or protests were received

and application is delayed until issues

raised by protest(s) are resolved

Protest(s) are

determined to have

merit by FMCSA

and the application

is rejected -

Start Over

Protest(s) are resolved

No Protests

are received

If Application is for

HHG Broker

Authority it goes

through “Vetting”

HHG Broker Authority Application does not

pass Vetting and is rejected – Start Over

rokering and Financial Responsibility

Financial responsibility protects your business against liability. As a broker, you must have adequate

protection. Financial responsibility is a crucial part of your application for broker authority and must

be maintained as a condition of your operating authority. If you cease having valid evidence of

financial responsibility, then your operating authority will be revoked.

Financial responsibility is defined in the regulation, 49 CFR §387.5 as:

Financial Responsibility--the financial reserves (e.g., insurance policies or surety bonds) sufficient

to satisfy liability amounts set forth in this subpart (49 CFR Part 387, Subpart A) covering public

liability.

The financial responsibility required for brokers is a surety bond or trust fund sufficient to cover your

legally required minimum liability. If you are a property or freight broker, then you must have a

surety bond or trust fund in effect for $10,000, as required by the regulation at 49 CFR

§387.307(a)(1). If you are a household goods broker, then you must have a surety bond or trust fund

in effect for $25,000, as required by the regulation at 49 CFR §387.307(a)(2).

The BMC-84 Form for surety bonds or the BMC-85 Form for trust funds is proof to FMCSA that you

have adequate financial responsibility. If, while conducting business as a broker, you decide to

change bonding companies or the financial institution that holds your trust fund, then you must file a

new BMC-84 or BMC-85 Form with FMCSA showing that your business still has adequate financial

responsibility. Remember, financial responsibility is a condition of your authority. If it is reported to

FMCSA that you no longer have financial responsibility, then your broker authority will be revoked.

Requirements for All Brokers

All brokers must comply with all the requirements of the regulations in 49 CFR §371. These

regulations require records to be kept and apply to how you conduct business. The FMCSA

encourages you to familiarize yourself with these regulations; you can access them on the FMCSA

Web site at www.fmcsa.dot.gov.

Records to be Kept by Brokers, 49 CFR §371.3

All brokers must keep records of all transactions and all shipments for which they arrange

transportation. To eliminate redundancy and to save time and effort, the regulation allows you to

organize these records into master lists, containing your consignors and the motor carriers that

transported their shipments.

Each record of a transaction (or master list of transactions) must contain the following information:

 The name and address of the consignor;

 The name, address, and registration or USDOT number of the originating motor carrier;

 Bill of lading or freight bill number;

 The amount of compensation received by you for the brokerage service you performed and

the name of the person who paid;

 Description of any non-brokerage service you performed regarding the shipment, and the

amount of compensation paid to you and the name of the person who paid; and

 The amount of any freight charges collected by you and the date of payment to the motor

carrier handling the shipment.

As long as this information is properly recorded, you have flexibility how to organize it to maximize

your productivity. You must keep these records for 3 years.

The regulation gives all parties to your brokered transactions the right to review the records of

transactions that involve them. Therefore, you must allow shippers and motor carriers involved in

your brokered transactions to review records pertinent to them.

Understanding and Avoiding Misrepresentation, Compliance with Regulation, 49

CFR §371.7

When working as a broker, you may not do business, including advertise, in any name other than the

name stated on your registration or operating authority. If you prefer to present yourself to potential

shippers using a “doing business as” or “dba” name, then you must have your broker authority in that

name. The name you register your brokerage with must be the name you present in your advertising.

You must be careful not to represent the operation of your business as that of a motor carrier. You

must be clear that you provide services as a broker, not as a motor carrier. If you operate a Web site,

then you must display on that Web site the name as stated on your broker registration, your MC

docket number, and a statement that you are a broker.

Accounting Requirements, in Compliance with Regulation, 49 CFR §371.13

If you operate other businesses in addition to your brokerage, especially other transportation

businesses such as motor carriers, then you must maintain your financial accounts so that revenues

and expenses from your brokerage are separate from those of the other businesses. If your brokerage

and the other businesses share common expenses, then your records must show which expenses

belong to the brokerage.

New Requirements for Household Goods Brokers

Effective January 28, 2011, the FMCSA amended its regulations in response to the Household Goods

Mover Oversight Enforcement and Reform Act of 2005 of SAFETEA-LU and a petition from

AMSA. The amendments emphasize the responsibilities of household goods brokers to avoid

deceptive business practices, and they increase the protection of consumers. Most of the

amendments, referred to as “Special Rules for Household Goods Brokers,” are contained in Subpart

B of 49 CFR §371. The full text of these rules is available on the FMCSA Web site at

http://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.aspx?reg=371.101

You, as a household goods broker, are subject to these regulations when you arrange transportation

for Individual Shippers. An individual shipper is any person who –

1. Is the shipper, consignor, or consignee of a household goods shipment;

2. Is identified as the shipper, consignor, or consignor on the face of the bill of lading;

3. Owns the goods being transported; and

4. Pays his or her own tariff transportation charges.

Exemption from the HHG Broker Regulations

Brokerage of commercial and government shipments is exempt from the new household goods broker

regulations. If your business deals only in the arrangement of transportation for commercial or

government shippers, then you are exempt from the Subpart B of §371.

A Commercial Shipper is any person who is not the owner of the household goods being

transported, but is responsible for payment for all transportation and other tariff charges. The

commercial shipper can be named on the bill of lading as the consignor or consignee, but the owner

of the goods is normally an employee of the consignor or consignee.

A freight forwarder, which, as part of its operations, employs a motor carrier to further a shipment, is

also considered a commercial shipper.

A commercial shipper is a company coming to a broker to relocate an employee. The contents of the

shipment belong to the employee, but the company pays all the tariff charges and is identified as the

shipper, consignor, or consignee on the shipping documents, especially the bill of lading.

You may encounter shipments that appear to come from a commercial shipper when, in fact, they

belong to an individual shipper. There can be subtle differences between commercial shippers and

individual shippers. For example, an employee of Company X is relocated from New York City to

Chicago. The policy of the company is to offer a moving allowance that could pay all the tariff

charges or just subsidize them, depending on the costs. The employee comes to you to arrange the

transportation of his household goods shipment. He is the shipper, he owns the contents of the

shipment, and he is identified as the shipper on the bill of lading and all the other shipping

documents, but Company X comes forward to pay the costs. That household goods shipment belongs

to an individual shipper, and you are subject to the household goods broker regulations if you handle

that shipment.

As a broker, you must clearly determine if the shipper fits the definition of a commercial shipper to

take advantage of the exemption. The type of shipper you intend to do business with can better be

determined by who is identified on the bill of lading, than by who is paying the tariff charges. If you

are not sure, then refer to the definitions in the regulation.

Government shippers are simple to determine. Any shipment moved under a government bill of

lading belongs to a government shipper. The best-known government shippers are the U.S.

Department of Defense and the U.S. Department of State. If you deal solely with government

shippers, then you, as a broker, are exempt from the household goods broker regulations. However,

you are subject to the rules, regulations, and statutes governing the agency for which you arrange

transportation. If you arrange transportation for government shippers, then it is in the best interest of

your business to familiarize yourself with all the requirements of the agencies with which you do

business.

Keep in mind that this exemption applies only to household goods broker regulations. As a broker,

you are still required to obtain the appropriate broker authority and do business only with motor

carriers having the appropriate operating authority. You still are required to keep the proper records.

If you operate multiple businesses, then you still are required to maintain separate financial records

for the brokerage.

Additionally, if your brokerage does business with government, commercial, and individual shippers,

the exemption applies only to shipments from commercial and government shippers.

Doing Business Only with Motor Carriers Having Valid USDOT Numbers and

Operating Authority, 49 CFR §371.105

As a household goods broker, you may do business only with a motor carrier that has a valid USDOT

number and valid household goods motor carrier authority. You may not arrange transportation with

motor carriers having only property motor carrier authority or household goods authority that is under

suspension or has been revoked. You are encouraged to regularly verify the authority status of motor

carriers that you do business with. You can check the status of a motor carrier’s operating authority

by going to the FMCSA Licensing and Insurance Web site at http://li-public.fmcsa.dot.gov. When

you arrive at that Web site, click “Continue” at the bottom. On the next webpage, click “Choose

Menu Option” in the upper right corner. When the drop-down menu appears, click “Carrier Search.”

On the next webpage, enter the motor carrier’s USDOT or MC number and click “Search.” You will

see the results of your search, provided that the motor carrier is registered with FMCSA. If the

carrier you are searching for appears, then choose either “HTML” or “PDF” to get a status report.

Required Information in Your Advertisements and on Your Web site Homepage,

49 CFR §371.107

As a household goods broker, you must PROMINENTLY display, in all of your advertisements and

on the home pages of your Web site, the following information:

 The physical location of your brokerage;

 Your MC Docket number and the USDOT number issued to your business by FMCSA;

 That you are a household goods broker and arrange the transportation of household goods by

an authorized household goods motor carrier;

 That your estimates are based on rates in the motor carrier’s tariff; and

 That the motor carrier is required to make its tariff available for public inspection upon a

reasonable request.

Information Household Goods Brokers Must Provide to All Potential Individual

Shippers, §49 CFR 371.109

You must provide, to all potential individual shippers who contact you, a list of all the authorized

household goods motor carriers that you use, including their USDOT and MC numbers. You may

submit this list electronically or on paper. Additionally, you must provide, to all potential individual

shippers that contact you, a statement saying that you are not a motor carrier authorized by the

Federal Government to transport household goods but only arrange transportation and additional

services, if applicable, by an authorized household goods motor carrier. This statement, as part of

your response to any inquiries by potential shippers, can be combined with the list of authorized

household goods motor carriers you use and can be provided electronically or on paper.

This is an example of a statement required by the regulation, 49 CFR §371.109:

(Name of your brokerage) is not a motor carrier authorized by the Federal Government to

transport an individual shipper’s household goods, and we only arrange for an authorized household

goods motor carrier to perform transportation services and, if applicable, additional services.

The required statement can be programmed as the closing of all your responding e-mails to potential

shippers. The list of the household goods motor carriers you use can be included in the responding e-

mail or an attachment, but this information must be sent to all potential shippers.

Providing Federal Consumer Protection Information to Potential Individual

Shippers, 49 CFR §371.111

You must provide potential individual shippers with Federal consumer protection information. The

required Federal consumer protection information contains two publications:

 “Ready to Move – Tips for a Successful Interstate Move”; and

 “Your Rights and Responsibilities When You Move”.

You have the option of supplying hard copies of the publications to disseminate to potential shippers,

or you may install a hyperlink on your Web site to the FMCSA Web site containing the publications.

The link to the FMCSA Web site is www.protectyourmove.gov. Publications are accessible from the

home page.

Providing Estimates to Individual Shippers, 49 C.F.R §371.113

As a household goods broker, you may provide individual shippers with estimates of the

transportation and accessorial charges. The estimates you provide must be in writing and based on a

physical survey of the household goods to be shipped. A physical survey is an on-site examination of

the household goods shipment at the individual shipper’s point of origin to determine a more accurate

estimate. The physical survey can be conducted by you, as the household goods broker, or the

household goods motor carrier on whose behalf the estimate was prepared. If the household goods

shipment is located beyond a 50-mile radius from both you and the household goods motor carrier

that will transport the shipment, then the physical survey requirement is waived. If your brokerage is

not located within a 50-mile radius from the individual shipper’s point of origin, then it is strongly

recommended that you use a household goods carrier that is within the radius to avoid grossly

inaccurate estimates and consumer complaints. Remember, you are required to inform potential

shippers of the authorized household goods motor carriers that you use, so assigning a household

goods shipment to a household goods motor carrier outside the 50-mile radius could result in

complaints of deceptive business practices. Such complaints can negatively impact your business.

You may encounter a household goods shipper who will waive the physical survey. If that happens,

then you must get a signed, written waiver agreement from the individual shipper. The waiver must

be printed at no less than 7-point size, using Universe typeface font. The waiver agreement is kept as

an attachment to the bill of lading. You and the household goods motor carrier that transports the

shipment must each keep a copy of the waiver agreement. As the broker, you are required to keep a

copy of this document for three years.

Written Agreements with Motor Carriers before Providing Written Estimates, 49

CFR §371.115

Before you can provide written estimates of transportation charges for household goods motor

carriers, you must have written agreements with those motor carriers, as required by the regulation at

49 CFR §375.409.

That regulation states:

A household goods broker must not provide an individual shipper with an estimate of charges

for the transportation of household goods unless there is a written agreement between the broker and

you, the carrier, adopting the broker's estimate as your own estimate. If you make such an agreement

with a broker, you must ensure compliance with all requirements of this part pertaining to estimates,

including the requirement that you must relinquish possession of the shipment if the shipper pays you

110 percent of a non-binding estimate at the time of delivery.

As a household goods broker, you may not provide an estimate for a household goods motor carrier

that you do not have a written agreement with, because that carrier cannot adopt your estimate as its

own.

Your written agreement must have the following information:

 Your broker name as shown on your FMCSA registration (operating authority certificate),

your physical address, and your MC Docket number;

 The authorized motor carrier’s name as shown on its FMCSA registration, its physical

address, and its USDOT and Motor Carrier (MC) Docket numbers;

 A concise, easy to understand statement that your written estimate to the individual shipper:

o Will be exclusively on behalf of the authorized household goods motor carrier;

o Will be based on the authorized household goods motor carrier’s published tariff; and

o Will serve as the authorized household goods motor carrier’s estimate for purposes of

complying with the requirements of 49 CFR Part 375, including the requirement that

the authorized household goods motor carrier relinquish possession of the shipment

upon payment of no more than 110% of a non-binding estimate at the time of delivery;

 Your owner’s, corporate officer’s, or corporate director’s signature lawfully representing your

household goods brokerage and the date; and

 The signature of the authorized household goods motor carrier’s owner, corporate officer or

corporate director’s signature lawfully representing the household goods motor carrier and the

date.

The signed written agreement between your household goods brokerage and a household goods

motor carrier must be made available to the public for inspection upon a reasonable request. You

must keep copies of written agreements for as long as you provide estimates on behalf of the

authorized household goods motor carriers you work with, and 3 years after the agreements are

terminated.

Providing Individual Shippers with the Policies of Your Brokerage Concerning

Cancellation, Deposits, and Refunds, 49 CFR §371.117

You must PROMINENTLY disclose on your Web site(s), and in agreements with prospective

shippers, your policies regarding cancellation, deposits, and refunds. You must retain, for 3 years,

records of all cancellation requests by individual shippers and how your brokerage handled those

requests. You must keep records of all individual shipper deposit refunds. Your refund records must

state that the individual shipper cashed or deposited the refunded money, if the financial institution

provides that documentation, or show proof you delivered the refunded money to the individual

shipper. These records, if kept properly, should protect your brokerage, if there are disputes with

individual shippers over cancellations and deposits.

Consequences of Noncompliance with the Regulations, 49 CFR §371.121

When doing business as a broker, you have a responsibility to comply with all Federal statutes and

regulations. Compliance with those statutes and regulations was a condition of obtaining your

authority and is a condition of maintaining your authority. Noncompliance with the Federal

regulations could result in complaints filed with FMCSA or the Surface Transportation Board against

your brokerage. When those complaints are investigated by FMCSA, and violations of Federal

regulations are discovered, the consequences may have an impact on your business and can be severe.

The FMCSA has authority granted to it by Congress to initiate enforcement actions for violations of

Federal statutes and regulations. These can include Notices of Violations, Notices of Claims that

could result in penalties starting at $1,100, and suspension or revocation of your broker authority.

Egregious violations could result in criminal prosecutions by the U.S. Department of Justice or by

State law enforcement authorities. Additionally, your brokerage may be subject to civil court actions

while FMCSA enforcement actions or Federal or State criminal prosecutions are in progress.

The minimum penalty is $10,000 if you are a household goods broker and you arrange transportation

of a household goods shipment with a motor carrier with which you do not have a written agreement.

The minimum penalty is $25,000 if you are a household goods broker and you operate without

household goods broker authority or while it is suspended.

It is important that you understand all of the laws and regulations that your brokerage must comply

with to avoid losing business or going out of business.

Further Assistance

If you require further assistance with the information presented in this guide, you

should contact the FMCSA, Commercial Enforcement Division, 1200 New Jersey

Avenue, SE, Washington, DC 20590 at (202) 385-2400.

Appendix A – Exempt Commodities

Brokering Exempt Commodities

All brokers may arrange transportation of commodities that are exempt from regulation.

Commodities exempt from regulation by the USDOT are listed in the Federal statute 49 U.S.C.

§13506(a)(6):

 ordinary livestock;

 agricultural or horticultural commodities (other than manufactured products thereof);

 commodities listed as exempt in the Commodity List incorporated in ruling numbered 107,

March 19, 1958, Bureau of Motor Carriers, Interstate Commerce Commission*, other than

frozen fruits, frozen berries, frozen vegetables, cocoa beans, coffee beans, tea, bananas, or

hemp, or wool imported from a foreign country, wool tops and noils, or wool waste (carded,

spun, woven, or knitted);

 cooked or uncooked fish, whether breaded or not, or frozen or fresh shellfish, or byproducts

thereof not intended for human consumption, other than fish or shellfish that have been

treated for preserving, such as canned, smoked, pickled, spiced, corned, or kippered

products; and

 livestock and poultry feed and agricultural seeds and plants, if such products (excluding

products otherwise exempt under this paragraph) are transported to a site of agricultural

production or to a business enterprise engaged in the sale to agricultural producers of goods

used in agricultural production.

*Administrative Ruling No. 107, March 19, 1958

Bureau of Motor Carriers, Interstate Commerce Commission

List of Exempt Commodities

AGRICULTURAL COMMODITY LIST

Ruling No. 107

March 19, 1958

[Section

203(b)(6)]

GENERAL

This ruling relates to Section 203(b)(6) as it presently reads:

Nothing in this part except the provisions of section 204 relative to qualifications and maximum hours of service of employees and safety of

operation or standards of equipment shall be construed to include

* * * (6) motor vehicles used in carrying property consisting of ordinary

livestock, fish (including shell fish), or agricultural (including horticultural) commodities (not including manufactured products thereof), if such

motor vehicles are not used in carrying any other property, or passengers, for compensation;

* * *.

Pending before the Congress are bills which if enacted into law would limit or revise the application of the exemption and render obsolete many

of the interpretations herein. For each entry in the Commodity List there is shown either the number assigned to one of the Commission or court

decisions in the Case List, or the words "Bureau opinion," the latter denoting an informal expression of the Bureau. In a few instances reference is

made to a numbered Note appended to the ruling. Certain of these explain the reason for Bureau opinions which differ from past Commission

decisions. Others mention pending Commission proceedings which may affect the status of commodities making reference thereto.

Though commodities are shown as either "Exempt" or "Not exempt," it must be kept in mind that an "Exempt" commodity loses its exemption

whenever it is transported in a vehicle which at the same time is transporting for compensation commodities not within the exemption. ." The

absence of a commodity from the list below should not be taken to mean that it 'is either within or not within the exemption. Only those

commodities are listed as to which inquiries have been received in the past by the Bureau or which has been the subject of Commission or court

proceedings.

Alfalfa, see Feeds

Animal fats--Not exempt-Bureau opinion

Animals, see Livestock

Bagged commodities--Placing exempt commodities in bags does not affect their exempt

status-Case 1

Bark, see Forest Products

Barley, see Grains

Bees-Exempt-Case 1

Beeswax, crude, in cakes and slabs--Exempt-Bureau ·opinion

Beet pulp, see Feeds

Beets. sugar-Exempt-Case 1

Berries, see Fruits

Bran, see Feeds

Broom com, threshed and baled-Exempt-Bureau opinion

Bulbs, see Horticultural Commodities

Butter-s-Not exempt-Case 20

Buttermilk-Exempt-Case 20

Canned fruits and vegetables-Not exempt-Case 20

Carnauba wax as imported in slabs or chunks-Not exempt-Bureau opinion

Castor beans-Exempt-Case 1

Cattle, live, see Livestock

Cattle, slaughtered-Not exempt-Case 20

Charcoal-Not exempt-Bureau opinion

Cheese-Not exempt-Case 1

Cheese, cottage-Not exempt-Case 20.

Cheese, cream-Not exempt-Case 20.

Christmas trees, plain, sprayed, or coated-Exempt-Bureau opinion··

Citrus fruits, see Fruits

Coal-Not exempt-Bureau opinion

Cocoa beans--Exempt-Case l(b), Note 1 (Not exempt-Ruling No. 110.]

Coffee beans, green-Exempt-Case l(b), Note 1 {Not exempt-Ruling No. 110.]

Coffee, instant-Not exempt-Bureau opinion

Coffee, roasted-Not exempt-Bureau opinion

Containers, crates, and boxes which have been used in the movement of exempt commodities

and are being returned for reuse-Exempt-Case 8

Administrative Ruling No. 107 COMMODITY LIST Continued

Containers, new for use in shipping exempt commodities--Not exempt-Case 8

Copra meal-Not exempt-Case 6

Corn, see Grain

Com cobs-Exempt-Case 1

Corn cobs, ground-Exempt-Bureau opinion, Note 4

Com fodder-Exempt-Case 1

Cottage cheese, see Cheese.

Cotton, carded but not spun, woven, or knitted-Exempt-Bureau opinion, Note 5

Cotton, ginned or unginned-Exempt-Case 1

Cotton Linters-Exempt-Case 20

Cotton waste, consisting of scraps of cotton fiber not spun, woven or knitted-Exempt-

Bureau opinion. Note 5

Cotton yarn--Not exempt-Bureau opinion Coffee beans, green-Exempt-Case l (b), Note 1 {Not exempt-Ruling No. 110.]

Coffee, instant-Not exempt-Bureau opinion

Coffee, roasted-Not exempt-Bureau opinion

Containers, crates, and boxes which have been used in the movement of exempt commodities

and are being returned for reuse-Exempt-Case 8

Containers, new for use in shipping exempt commodities--Not exempt-Case 8

Copra meal-Not exempt-Case 6

Corn, see Grain

Com cobs-Exempt-Case 1

Corn cobs, ground-Exempt-Bureau opinion, Note 4

Com fodder-Exempt-Case 1

Cottage cheese, see Cheese.

Cotton, carded but not spun, woven, or knitted-Exempt-Bureau opinion, Note 5

Cotton, ginned or unginned-Exempt-Case 1

Cotton Linters-Exempt-Case 20

Cotton waste, consisting of scraps of cotton fiber not spun, woven or knitted-Exempt-

Bureau opinion. Note 5

Cotton yarn--Not exempt-Bureau opinion

Cottonseed cake-Not exempt-Bureau opinion

Cottonseed. dehulled-Exempt-Bureau opinion

Cottonseed hulls-Exempt-Case 20

Cottonseed meal-Not exempt-Case 20

Crates, see Containers

Cream. see Milk

Cream cheese. see Cheese

Dehydrated. See commodity name: Fruits, Vegetables, and Eggs. etc.

Diatomaceous earth-Not exempt-Bureau opinion

Dinners, frozen-Not exempt-Bureau opinion

Dinners, seafood. Frozen - Not exempt-Case 7, Note 6, [Exempt-Ruling No. 110.]

Dried, see commodity name; Fruits. Vegetables. Eggs; etc.

Eggs

Albumen, fresh, Liquid-Exempt-Case 5

Dried-Exempt-Case 20

Frozen-Exempt-Case 20

In shell-Exempt-Case 1

Liquid, whole or separated-Exempt-Case 5

Oiled-Exempt-Case 1

Powder, dried-Exempt-Case 20

Shelled-Exempt-Case 5

Yolks, dried-Exempt-Case 20

Yolks, fresh, Liquid-Exempt-Case 5

Fats, animal-Not exempt-Bureau opinion

Feathers-Exempt-Case 20

Feeds Alfalfa meal-Not exempt-Bureau opinion

Alfalfa pellets-Not exempt=-Bureau opinion

Beet pulp-Not exempt-Case 6

Bran shorts-Not exempt-Case 6

Copra meal-Not exempt-Case 6

-Com Gluten-Not exempt-Bureau opinion

Cottonseed products, see Cottonseed

Distilled corn grain, residues, with or without solubles added-Not exempt-Case 6

Fish meal-Not exempt-Case 6

Hominy feed-Not exempt-Bureau opinion

Middlings-Not exempt-Case 6

Oat hulls, ground-Exempt-Bureau opinion, Note 4

Pelletized ground refuse screenings-Not exempt-Case 6

Administrative Ruling No. 107 COMMODITY LIST Continued

Rice bran-Exempt-Bureau opinion-Compare Case 12

Screenings, feed-Exempt-Case 6

Wheat bran-Not exempt-Bureau opinion

Wheat shorts-Not exempt-Bureau opinion

Fertilizer, commercial-Not exempt-Bureau opinion

Fish (including shell fish)

General. Frozen, quick frozen, and unfrozen fish and shell fish in the various forms in

which it is shipped, such as live fish, fish in the round, beheaded, and gutted fish,

filleted fish, beheaded shrimp, and oysters, clams, crabs, and lobsters, with or

without shells, including crab meat and lobster meat-Exempt-Case 11

Breaded, uncooked, frozen or unfrozen-Exempt-Administrative Ruling No.' 98.

November 28, 1955 [Exempt-Ruling No. 110.]

Cakes, codfish-Not exempt-s-Case 7, Note 6 [Exempt-Ruling No. 110.J

Clam juice Or broth-Not exempt-Bureau opinion [Exempt-Ruling No. 110.]

Cooked or partially cooked fish or shrimp, frozen or unfrozen-Not exempt-Administrative

Ruling No. 98, November 28, 1955 [Exempt-Ruling No. 110.]

Croquettes, salmon, frozen-Not exempt-Case 7. Note 6 [Exempt-Ruling No. 110.)

Deviled crabs, clams, or lobsters. frozen-Not Exempt-Case 7, Note 6 [Exempt-

Ruling No. 110.1

Dinners, frozen-Not exempt-Case 7, ~ Note 6 [Exempt-Ruling No. 110.]

Fried fish fillets, oysters, or scallops, frozen-Not exempt-Case 7, Note 6 [Exempt-

Ruling No. 110.]

Frogs, live or dressed-Exempt-Bureau opinion

Frozen, see General above, and individual listings.

Hermetically sealed in containers as a treatment for preserving-Not exempt-Case 11

Hermetically sealed in containers for cleanliness only, preservation attained by refrigeration-

c-Exempt=-Bureau opinion

Meal-Not exempt-Case 6

Offal (inedible portions of fish not further processed)-Exempt-Bureau opinion

Oil from fishes-Not exempt-Bureau opinion

Preserved, or treated for preserving, such as smoked, salted, pickled, spiced, corned, or kippered-Not exempt-Case 11 [Ruling No. 110.]

Shells, oyster, moving to market for use in button making-Not exempt-Case 16

Stew, consisting of raw oysters or clams, milk, and seasoning, frozen but uncooked-

Exempt-Bureau opinion.

Sticks, frozen-Not exempt-Case 7, Note 6 [Exempt-Ruling No. 110.]

Turtles, sea or fresh water-Exempt-Bureau opinion

Whale meat, fresh-Exempt-Bureau opinion

Flagstone--Not exempt-Bureau opinion

Flax fiber-Exempt-Case

Flaxseed, whole--Exempt-Case 1

Flaxseed meal-Not exempt-Bureau opinion

Flour-Not exempt-Bureau opinion

Flowers and flower plants, see Horticultural commodities

Fodder, corn and sorghum-Exempt-Case

Forage, see Hay

Forest products

Bark-Exempt-Case 1

Bark, boiled to clean and soften-Exempt-Bureau opinion

Blankets of pine and spruce boughs-Exempt-Bureau opinion

Greenery-Exempt-Case

Holly sprigs and cuttings-Exempt-Bureau opinion

Leaves-Exempt-Case

Leaves, sisal, husks and moisture removed-Exempt-Bureau opinion

Mistletoe--Exempt-Bureau opinion

Myrobalons, as imported in natural state--Exempt-Bureau opinion

Palmyra stalk fibers (fronds from palm leaves)-Exempt-Bureau opinion

Peat moss, dried, shredded, baled-Exempt-Case 22

Resin, crude--Exempt-Case

Resin products, such as turpentine--Not exempt-Administrative Ruling No. 62,

August 3, 1937

Roots, natural or dried-Exempt-Bureau opinion

Sap, maple--Exempt-Case 1

Spanish moss-Exempt-Case 1

Sphagnum moss=-Exempt-c-Bureau opinion

Spices, see separate listing: Spices

Trees see separate listing: Trees.

Administrative Ruling No. 107 COMMODITY LIST Continued

Valonia, as imported in natural state-c-Exempt-s-Bureau opinion

Wreaths of holly or other natural material with small amount of foundation or

decorative material-Exempt-Bureau opinion

Frogs, see Fish

Frozen, see commodity name: Fruits, Vegetables, Fish, Poultry, etc.

Fruits and Berries

Bagged-Exempt-Case

Canned-Not exempt-Case 20

Citrus fruit sections, fresh, cold-packed, semi-frozen, or frozen-Exempt-Bureau opinion, Note 2 [Ruling No. 110.]

Color added-Exempt-Case

Dates, pitted, dried-e-Exempt-e-Bureau opinion

Dehydrated-Exempt-Bureau opinion, Note 3

Dried, naturally or artificial1y-Exempt-Cases

1 and 20

Figs, dried, halved or quartered-c-Exempt=-Bureau opinion

Frozen, fresh=-Exempt-c-Case 20 [Not exempt-Ruling No. 110.]

Fumigated-Exempt-Case 1

Graded-Exempt-Case 1

Hulls of oranges after juice extractions=-Not exempt-Bureau opinion

In brine, to retain freshness-e-Exempt-e-Bureau opinion

Juice, orange or other citrus-Not exempt-Case 17

Juice, fruit, plain or concentrated-Not exempt-Bureau opinion

Kernels-Exempt-Bureau opinion

Oiled apples-Exempt-Case

Peaches, peeled, pitted, and put in cold. storage in unsealed containers-Exempt-

Case 20.

Quick frozen, fresh-Exempt-Case 21' [Not exempt-s-Ruling' No. 110.]

Pies, frozen-Not exempt-Case 14

Preserved, such as jam-s-Not exempt-Bureau opinion

Purees, strawberry and other, frozen-Not exempt-Case 7, Note 6

Raisins, seeded or unseeded-Exempt-Bureau opinion

Sliced, fresh or frozen-Exempt-Bureau opinion, Note 2 [Ruling No. 110.]

Strawberries, in syrup and unsealed containers in cold storage--Exempt-Case 20

Grains

Artificially dried-Exempt-Case 1

Barley,' rolled-Exempt-Case 20

Barley, whole-Exempt-Case 1

Corn, cracked-Exempt-Bureau opinion

Com, shelled-Exempt-Case 1

Com, whole-Exempt-Case 1

Feeds, see separate heading: Feeds

Hulls, see Feeds

Milo maize-Exempt-Bureau opinion

Oats, whole-Exempt-Case 1

Oil extracted from grain-Not exempt-Bureau opinion

Popcorn, popped-Not exempt-Bureau opinion

Popcorn, unpopped, shelled, in sealed or unsealed containers-Exempt-Bureau opinion

Rice bran-Exempt-Bureau opinion, Compare Case

12.

Rice, brewers-Exempt-Bureau opinion

Rice, c1ean-Exempt-Cases 12 and 20

Rice polish-Exempt-Case 20

Rice, precooked-Not exempt-Bureau opinion

Rice, whole-Exempt-Case 1

Rye, whole-Exempt-Case 1

Sorghum grains, whole-Exempt-Case 1

Wheat germ-Not exempt-Bureau opinion

Wheat, whole-Exempt-Case 1

Grass sod-Exempt-Bureau opinion

Gravel-Not exempt-Bureau opinion

Greenery, see Forest products

Grinding, see Note 4

Hair, alpaca; camel, or goat, clipped from animal-Exempt-Bureau opinion

Hair, hog or other animal, product of slaughter of animal-Not exempt-Bureau opinion

Hay and forage, dried naturally or artificially-Exempt-Case 1

Hay, chopped-Exempt-Case 20

Hay, dehydrated-Exempt-Case 1

Hay, salt (from salt marshes)-Exempt-Bureau opinion

Hay, sweetened with 3% molasses by weight-Not exempt-Bureau opinion

Administrative Ruling No.107 COMMODITY LIST Continued

Hemp fiber-Exempt-Case 1 [Not exempt-Ruling No. 110.]

Herbs, see Spices

Hides, green and salted-Not exempt-Cases 1 and 23

Honey, in the comb or strained-Exempt-Case 1

Honey, heat treated to retard granulation-Exempt-Bureau opinion

Hops-Exempt-Case 1

Horticultural commodities

Bulbs-Exempt-Bureau opinion

Flowers, growing or cut-Exempt-Bureau opinion

Leaves, natural or dried-Exempt-Bureau opinion

Nursery stock-Exempt-Bureau opinion

Plants, vegetable and flower-Exempt-Bureau opinion

Roots, rhubarb, asparagus, mint, etc.-Exempt-Bureau opinion

Trees, growing, balled in earth-Exempt-Bureau opinion

Wreaths, holly or other natural material, with small amount of foundation or

decorative material-Exempt-Bureau opinion

Humus, of a nature similar to peat moss-Exempt-Bureau opinion

Ice for cooling- subsequent shipments of exempt commodities-Exempt-Administrative

Ruling No. 63, August 3, 1937

Imported commodities-Have same status as domestic-Cases l(b) and 22 [Ruling No. 110.)

Insecticides=-Not exempt-Bureau opinion

Juices, See Fruits

Jute fiber, in bales-Exempt-Bureau opinion

Kelp, dried, ground-Exempt-Bureau opinion, Note 4

Latex, see Rubber

Leaves, see Forest products, Horticultural commodities, and Spices

Livestock

Exhibit animals, such as those of 4-H club members, which though showed for a

few days, are chiefly valuable for slaughter-Exempt-Bureau opinion

Medical use animals, such as ordinary healthy swine for serum manufacture--Exempt

-Bureau opinion

Monkeys-Not exempt-Bureau opinion

Ordinary, i.e., all cattle, swine, sheep, goats, horses, and mules, except such as are

chiefly valuable for breeding, racing, show purposes, and other special uses-Exempt

-Case 1

Race horses-Not exempt-Case 1

Registered or purebred cattle for ordinary farm or ranch uses, not chiefly valuable

for breeding, race, show, or other special purposes-Exempt-Bureau opinion

Show horses-Not exempt-Case 1

Zoo animals-Not exempt-Bureau opinion

Limestone, agricultural-Not exempt-Bureau opinion

Linseed meal, see Meal -

Lumber, rough sawed or planed-Not exempt-Cases 1 and 9

Manure, in natural state-Exempt-Case 1

Manure, dried or dehydrated, bagged-Exempt-Bureau Opinion

Maple sap-Exempt-Case 1

Maple syrup-Not exempt-Bureau opinion

Meal, alfalfa-Not exempt-Bureau opinion

Meal, copra-Not exempt-Case 6

Meal, cottonseed-Not exempt-Case 20

Meal, fish-Not exempt-Case 6

Meal, flaxseed-Not exempt-Bureau opinion

Meal, linseed-Not exempt-Bureau opinion

Meal, peanut-Not exempt-Bureau opinion

Meal, soybean-Not exempt-Bureau opinion

Meat and meat products, fresh, frozen or canned-Not exempt-Cases 1 and 20

Milk and cream

Buttermilk-Exempt-Case 20

Chocolate-Not exempt-Case 1

Condensed-Not exempt-Case 20

Frozen-Exempt-Case 20

Homogenized-Exempt-Case 1

Pasteurized-Exempt-Cases 1 and 20

Powdered-Exempt-Case 20

Raw-Exempt-Case 1

Skim-Exempt-Cases 1 and 20

Skim, with two-thirds of water removed, in bulk or unsealed containers--Exempt-Bureau opinion

Administrative Ruling No. 107 COMMODITY LIST Continued

Standardized-Exempt-Case 1

Sterilized in hermetically sealed cans-Not exempt - Bureau opinion

Vitamin "A"- Exempt-Cases 1 and 20

Milo, see Grains

Mohair, raw, cleaned, or scoured-Exempt-Case l(a)

Molasses=-Not exempt-Bureau opinion

Moss, see Forest products

Mushrooms, fresh-Exempt-Case 4

Nursery stock, see Horticultural commodities

Nuts, (including peanuts)

Peanut meal-Not exempt-Bureau opinion

Peanut shells, g-round-Exempt-Case 20, Note 4

Polished-Exempt-Bureau opinion

Raw, shelled or unshelled-c-Exempt=-Cases 1,3, and 18

Roasted or boiled-Not exempt-Bureau opinion

Shelled, raw-Exempt-Cases 3 and 18

Shells-Exempt-Bureau opinion

Shells, ground peanut-Exempt-Case 20, Note 4

Unshelled, raw-Exempt-Case 1

Oats, see Grains

Oil, mint-s-Not exempt-Case 1

Oil, extracted from vegetables, grain, seed, fish, or other commodity-Not exempt-Bureau opinion

Packaged commodities-Packaging exempt commodities does not affect- their exempt

status-Case 1

Peanuts, see Nuts

Peat moss, see Forest products

Pelletized feeds, see Feeds

Pelts-Not exempt-Case 1

Pies, frozen-Not exempt-Case 14

Pigeons, racing-Not exempt-Case 13

Plants, vegetable or flower, see Horticultural commodities

Poles, see Trees

Popcorn, see Grains

Poultry, dressed, fresh or frozen-Exempt-Case 19

Poultry feathers-Exempt-Case 20

Poultry, frozen-Exempt-Case 19

Poultry, live-Exempt-Case 1

Poultry. picked-Exempt-Case 20

Poultry, stuffed and frozen-Exempt-Bureau opinion

Pulp, beet-Not exempt-Case 6

Pulp, sugarcane-Not exempt-Bureau opinion

Purees, see Fruit-s- __

Rabbits, dressed-Exempt-Bureau opinion

Raisins, see Fruits

Ramie Fiber-Exempt-Case 1

Resin, see Forest products

Rice, see Grains

Rock-Not exempt-Bureau opinion

Roots, see Forest products, Horticultural commodities

Rubber. crude, in bales-Not exempt-Bureau opinion

Rubber, latex. natural, liquid, from which water has been extracted and to which ammonia

has been added-Not exempt-Case 15

Rye, see Grains

Sand-Not exempt-Bureau opinion

Sap, see Forest products

Sawdust, from lumber mills-Not exempt-Bureau opinion

Seaweed, dried, ground-Exempt-Bureau opinion, Note 4

Seeds

Cotton, see Cottonseed

Deawned-Exempt-Case 20

Flax, see Flaxseed

Inoculated-Exempt-Case 1

Meal made from seeds, see Meal

Natural-Exempt-Case 1

Oil extracted from seeds-Not exempt-Case 1

Packets or boxes of seeds in display racks-Exempt-Bureau opinion

Scarified-Exempt-Case 20

Screened or sized-Exempt-Case 2

Administrative Ruling No. 107 COMMODITY LIST Continued

Spice. see Spices

Sprayed for disease control-Exempt-Case 2

Shells, nut, see Nuts

Shells, oyster, see Fish

Shingle bolts, see Trees

Skins, animal-Not exempt-Cases 1 and 23

Sliced, see commodity name: Fruits, Vegetables, etc.

Soil, potting-Not exempt-Bureau opinion

Soil, top-Not exempt-Bureau opinion

Sorghum fodder-Exempt-Case 1

Sorghum grains-Exempt-Case 1

Soup, frozen-Not exempt-Bureau opinion

Spices and herbs, ungrounded, whether seeds, berries, leaves, bark, or roots-Exempt-

Bureau opinion

Spices and herbs. ground but not further processed-Exempt-Bureau opinion, Note 4

Stover-Exempt-Case 1 -

Straw-Exempt-Case 1

Sugar-Not exempt-Case 1

Sugar beets-Exempt-Case 1

Sugar cane-Exempt-Case 1

Sugar cane pulp-Not exempt-Bureau opinion

Sugar, raw-Not exempt-Bureau opinion

Syrup, cane-Not exempt-Case 1

Syrup, maple-Not exempt-Bureau opinion

Tea-Exempt-Case l(b), Note 1 [Not exempt-Ruling No. 110.]

Telephone poles, see Trees

Textile waste, see Cotton waste

Tobacco

Chopped leaf-Exempt-Bureau opinion

Cigars and cigarettes-Not exempt-Bureau opinion

Homogenized-c-Not exempt-Bureau opinion

Leaf-Exempt-Case 1

Redried leaf-Exempt-Case 1(a)

Smoking-Not exempt-Bureau opinion

Stemmed leaf-Exempt-Bureau opinion

Stems-Exempt-Bureau opinion

Top Soil-Not exempt-Bureau opinion

Trees _

Bolts for making shingles-Exempt-Bureau opinion

Brush, mesquite, twigs and debris burned off-Exempt-Bureau-opinion-

Christmas, plain, sprayed, or coated-Exempt-Bureau opinion

Cut to length, peeled, or split-Exempt-Case 1

Growing, see Horticultural commodities

Sawed into lumber-Not exempt-Case 1

Shingle bolts-Exempt-Bureau opinion

Telephone poles, not creosoted-Exempt-Bureau opinion

Turtles, see Fish

Vegetables

Bagged-Exempt-Case 1

Beans, dried artificially and packed in small container-Exempt-Case 20

Candied sweet potatoes, frozen-Not exempt-Case 7, Note 6·

Canned-Not exempt-Case 20

Cooked-Not exempt-Bureau opinion

Cucumbers, salt cured-Exempt-Case l(b), Note 1

Cured-Exempt-Case 1

Cut up. fresh, in cellophane bags-Exempt-Case 20

Dried, naturally or artificially-Exempt-Cases 1 and 20

Dehydrated-Exempt-Bureau opinion, Note 3

French fried potatoes-Not exempt-Case 10

Frozen, fresh-c-Exempt=-Case 21 [Not exempt-Ruling No. 110.]

Garlic powder-Exempt-Bureau opinion, Notes 3 and 4

Graded-Exempt-Case 1

Oil extracted from vegetables-Not exempt - Bureau opinion

Onion powder-Exempt-Bureau opinion, Notes 3 and 4

Onion chips and flakes, dried-Exempt-Bureau opinion, Note 3

Peas, split-Exempt-Bureau opinion

Peeled, uncooked-Exempt-Bureau opinion

Powder, onion and garlic-Exempt-Bureau opinion, Notes 3 and 4

Administrative Ruling No. 107 COMMODITY LIST Continued

Quick frozen, fresh-s-Exempt-c-Case 21 [Not exempt-Ruling No. 110.]

Shelled-Exempt-Bureau opinion

Soup, frozen-Not exempt-Bureau opinion

Soybean meal-Not exempt--Bureau opinion

Washed, fresh, in cellophane bags-Exempt-Case 20

Whale meat, see Fish

Wheat, see Grains

Wheat products; see Feeds, Flour

Wood chips for making wood pulp-Not exempt-Bureau opinion

Wool grease, as obtained from cleaning or scouring process-Exempt-Bureau opinion

Wool, raw, cleaned, or scoured-Exempt-Case l (a) (Ruling No. 110.]

Wool tops and noils-Exempt-Bureau opinion, Note 5 [Not exempt-Ruling No. 110.]

Wool waste, carded but not spun, woven or knitted-Exempt-Bureau opinion Note 5

[Ruling No. 110.] ,

Wool yarn-Not exempt-Bureau opinion

Wreaths, see Forest products

CASE LISTS

Commission

1. Determination of Exempted Agricultural Commodities, S2 M. C. C. SI1 [8 FEDERAL CARRIERS CASES ¶ 32,042] ,

1(a). Determination of Exempted Agricultural Commodities, 62 M. C. C. 87' [10 FEDERAL CARRIERS CASES ¶32,845]

1(b). Determination of Exempted Agricultural Commodities, 74 M. C. C. 549 [13 FEDERAL CARRIERS CASES ¶ 34,247]

2. Blythe Common Carrier Application, 66 M. C. C. 560 [11 .FEDERAL CARRIERS CASES ¶ 33,541]

3. Bonney Motor Express, Inc., Extension, 69 M. C. C.480 [12 FEDERAL CARRIERS CASES ¶ 33,844]

4. Dougherty Common Carrier Application, 31 M. C. C. 793 [3 FEDERAL CARRIERS CASES ¶ f 30,151]

5. Erickson Transport Corp., Extension-Madison, South Dakota, 74 M. C. C. 23 [13 FEDERAL CARRIERS CASES ¶34,257]

6. Herrett Trucking Co., Inc., Extension-Feeds, 69 M. C. C. 487 [12 FEDERAL CARRIERS CASES ¶ 33845] '

7. Hughes Extension - Frozen. Foods, 71 M. C. C. 457 [12 FEDERAL CARRIERS CASES ¶ 33935]

8. Karst Extension-Containers, 62 M. C. C. S79 [10 FEDERAL CARRIERS CASES ¶ 33,067]

9. Lewis Common Carrier Application, 69 M. C. C. 603 [12 FEDERAL CARRIERS CASES ¶33869]

10. Midwest Coast Transport, Inc., Extension-Montana, 74. M. C. C. 1 [12 FEDERAL CARRIERS CASES ¶34,209]

11. Monark Egg Corp., Contract Carrier Application, 52 M. C. C. 576 [8 FEDERAL CARRIERS CASES ¶32,043)

12. Penn-Dixie Lines, Inc., Extension-Rice, 72 M. C. C. 797 [12 FEDERAL CARRIERS CASES ¶ 34,097]

13. Prang Extension-Homing Pigeons, 53 M. C. C. 223 [8 FEDERAL CARRIERS CASES ¶ 32,154]

14. Refrigerated Transport Co., Inc., Extension, Frozen Foods, 72 M. C. C. 459 [13 FEDERAL CARRIERS CASES ¶ 34,25S]

15. Shipley Transfer, Inc., Extension-Liquid Latex, 52 M. C. C. 806 (Not printed)

16. Sprofera Common Carrier Application, 66 M. C. C. 123 [11 FEDERAL CARRIER CASES ¶ 33,452]

17. Watkins Motor Lines, Inc., Interpretation, 64 M. C. C.455 [11 FEDERAL CARRIER CASES ¶ 33,35S]

Court

18. Consolidated Truck Service, Inc. v. U. S. and I. C. C., 144 F. Supp. S14 [12 FEDERAL CARRIER CASES ¶ 81083]

19. East Texas Motor Freight Lines, Inc. v. Frozen Food Express, 351 U. S. 49 [11 FEDERAL CARRIER CASES ¶81,050]

20. Frozen Food Express v. U. S. and I. C. C., 148 F. Supp. 399, affirmed without opinion 355 U.S. 6 [12 FEDERAL CARRIER CASES ¶

81,100]

21. Home Transfer & Storage Co. v. U.S. and I. C. C., 141 F. Supp. 599 [11 FEDERAL CARRIER CASES ¶ 81061], affirmed without opinion,

352 U. S. 884 [12 FEDERAL CARRIER CASES ¶ 81085]

22. Premier Peat Moss Corp. v. U. S., 147 F. Supp. 169 [12 FEDERAL CARRIERS CASES ¶ 81,088]

23. Southwestern Trading Co. v. U. S., 208 F. 2d 708

NOTES

Note 1.

The report in Determination of Exempted Agriculture Commodities, MC C-968, First Supplemental Report, decided February 11, 1958 was

served on February 14,1958 [13 FEDERAL CARRIER CASES ¶ 34,247). Whether any petitions for reconsideration will be filed is not known at

this time.

Administrative Ruling No. 107 COMMODITY LIST Continued

Note 2

In Penn-Dixie, 68 M. C. C. 29 [11 FEDERAL CARRIER CASES ¶33,690}, Division 1 of the Commission held fresh citrus fruit sections not to

be within the exemption. However, this decision was rendered prior to the affirmance by the U. S. Supreme Court of the court decisions in

I. C. C. v. Home Transfer & Storage Co., 141 F. Supp. 599 [11 FEDERAL CARRIER CASES ¶81,061], 352 U. S. 884 [12 FEDERAL

CARRIER CASES ¶81,085) and in Frozen Food Express v. U. S., 148 F. Supp. 399 [12 FEDERAL CARRIER CASES ¶ 81,100}, 355 U. S. 6. In

the former case peeled and sliced frozen peaches were held to be within the exemption, and in the latter case cut up vegetables and peeled and

pitted peaches were held to be within the exemption.

Note 3.

In the Determination case, 52 M. C. C. 511 [8 FEDERAL CARRIER CASES ¶32,042}, the Commission held that dehydrated vegetables do not

come within the exemption. However, that position would seem no longer valid in view of the recent holding in Frozen Food Express v. U.S., 148

F. Supp. 399 [12 FEDERAL CARRIER CASES ¶81,100} that dried egg powder, dried egg yolks and powdered milk are within the exemption,

which holding was affirmed by the U. S. Supreme Court in 355 U. S. 6.

Note 4

It is, rather dear from the Determination case, 52 M. C. C. 511 [8 FEDERALCARRIER CASES ¶ 32042], that the Commission considered

grinding to be manufacturing, though it did not specifically so hold. The Bureau until recently considered all ground commodities to be not

exempt. In Herren, 69 M. C. C. 487, (January 29, 1957) [12 FEDERAL CARRIER CASES ¶ 33845] the Commission, Division 1, held ground

oat hulls not within the exemption. This, however, was prior to the expiration of the date for appeal in Frozen Food Express v.

U. S. and I. C. C., 148 F. Supp. 399 [12 FEDERAL CARRIER CASES ¶81,100], in which the court held, among other things, that ground peanut

shells, dried egg powder, and powdered milk are within the exemption. No appeal was taken as to ground peanut shells, and on appeal the U. S.

Supreme Court affirmed the decision as to the two powdered commodities. The Court opinion does not describe the grinding and powdering

processes there involved, but in an early Commission case, Harris and Callis, 4 M. C. C. 169 [1 FEDERAL CARRIERS

CASES ¶ 7172}, it was said that ground peanut shells are produced by pulverization in a hammer mill. In view of the Court holdings, which now

are final, the Bureau no longer considers that grinding alone removes a commodity from the exemption. However, manufacturing which follows

or precedes grinding may have this effect. Thus the bolting which produces flour would make that commodity non-exempt. Also meals produced

by grinding commodities from which the oil has been extracted are considered not within the exemption. Thus in the Frozen Food case,

mentioned above, the court held cottonseed meal not to be within the exemption.

Note 5.

In view of the "substantial identity" test of the U. S. Supreme Court in East Texas Motor Freight Lines, Inc. v. Frozen Food Express, 351 U.S.49

[11 FEDERAL CARRIER CASES ¶ f 81,050], the Bureau takes the view that the exemption includes cotton or wool which has been combed or

carded but not spun, woven or knitted. Thus wool tops and noils are now considered within the exemption. Also considered within the exemption

is waste which consists of scraps or discards of cotton or wool fibers resulting from the handling and processing in mills, but not wastes made up

of scraps of 'thread, yam, or cloth.

Please review the Federal statute at 49 U.S.C. §13506 closely if you choose to broker shipments of

exempt commodities. Keep in mind that there are non-exempt commodities that are similar to

exempt commodities or created from exempt commodities listed in the statute. These are listed at 49

CFR §372.115**. Brokering shipments containing these non-exempt commodities makes you

subject to regulation by FMCSA. If you broker a shipment that is a combination of exempt and non-

exempt commodities, then you and the motor carrier that transports it are subject to the regulations of

FMCSA. As a broker, it is imperative that you be fully aware of the commodities for which you

arrange transportation and that you have the proper broker authority.

For example, a shipper wants you to move a shipment containing hogs (ordinary livestock, an exempt

commodity) from North Carolina to Maryland. Because that shipment is exempt, it is not required to

be transported by an authorized motor carrier, and you do not require authority as a property broker

to broker the shipment. Another shipper wants you to move a shipment containing hand tools from

Indiana to New York. That shipment must be transported by an authorized motor carrier, and you

must have authority as a property broker to arrange transportation for it. A third shipper wants you to

move his shipment of raw and roasted peanuts from Virginia to Delaware. The raw peanuts are

exempt, and the roasted peanuts are not. That shipment must be transported by an authorized motor

carrier, and you must have authority as a property broker to make the arrangements for transport.

**Commodities not exempt under 49 U.S.C. §13506(a)(6) as stated in 49 CFR §372.115

Administrative Ruling No. 133

Animal Fats

Butter

Canned Fruits and

Vegetables

Carnauba wax as imported in

slabs or chunks

Cattle, slaughtered

Charcoal

Cheese

Coal

Cocoa beans

Coffee, beans, roasted or

instant

Copra meal

Cotton yarn

Cottonseed cake or meal

Diatomaceous Earth

Dinners, frozen

Fertilizer, commercial

Feeds: Alfalfa meal, Alfalfa pellets, Beet pulp, Bran shorts, Copra meal, Corn gluten, Distilled corn grain residues,

with or without soluble added, Fish meal, Hominy feed, Middlings, Pelletized ground refuse screenings, Wheat bran,

Wheat shorts

Fish: Canned or salted as a treatment for preserving, Cooked or partially cooked fish or shrimp, frozen or unfrozen,

Hermetically sealed in containers as a treatment for preserving, Oil from fishes, Preserved, or treated for preserving,

such as smoked, salted, pickled, spiced, corned, or kippered

Flagstone

Flaxseed meal

Flour

Forest Products: Resin

products, such as turpentine

Fruits and Berries: Bananas, fresh, dried, dehydrated, or frozen, Canned, Frozen, Hulls of oranges after juice

extractions, Juice, fruit, plain or concentrated, Pies, frozen, Preserved, such as jam, Purees, strawberry and other,

frozen

Grains: Oils extracted from grain, Popcorn, popped, Rice, precooked, Wheat germ

Gravel

Hair, hog or other animal, product

of slaughter of animal

Hay, sweetened with 3%

molasses by weight

Hemp fiber

Hides, green and

salted

Insecticides

Limestone, agricultural

Lumber, rough sawed or

planed

Livestock: Monkeys, Race horses, Show horses, Zoo animals

Meal: Alfalfa, Copra, Cottonseed, Fish, Flaxseed, Linseed, Peanut, Soybean

Milk and Cream: Chocolate, Condensed, Sterilized in hermetically sealed cans

Nuts (including Peanuts): Peanut Meal, Roasted or boiled

Seeds: Oil extracted from seeds

Sugar, Sugar raw, Sugar cane pulp, Syrup, cane, Syrup, maple, Pulp, beet, Molasses

Vegetables: Candied sweet potatoes, frozen, Canned, Cooked, French fried potatoes, Oil, extracted from vegetables,

Soup frozen, Soybean meal

Tobacco: Cigars and cigarettes, Homogenized, Smoking

Wool imported from a foreign country, Wool tops and noils, Wool yarn, Wool waste (carded, spun, woven, or

knitted)

Meat and meat products,

fresh, frozen or canned

Sand

Oil, mint

Oil, extracted from vegetables, grain, seed, fish or other

commodity

Skins, animal

Pelts

Rock (except natural crushed, vesicular rock to be used

for decorative purposes

Rubber, crude, in bales

Soup, frozen

Sand

Rubber, latex, natural, liquid, from which water has

been extracted and to which ammonia has been added

Tea

Soil,

Soil, top

Trees: Sawed into lumber

As a broker, you must be aware of the commodities in the shipments you handle and the motor

carriers you deal with or you could violate Federal regulations and statutes, risking penalties and

suspension or revocation of your authority to operate as a broker.