Closing a freight brokerage: FMCSA record-keeping and what you can do with the rest

What FMCSA record-keeping requires of a closing broker#

FMCSA record-keeping requires a property broker to keep a record of each transaction it arranged, and that duty does not end when the brokerage stops booking loads. The record generally covers who the shipper and carrier were, what moved and what the broker received and paid, and parties to a transaction may be entitled to review the record for their load.

The rule also sets a minimum retention period. Owners often quote that period from memory or from an industry forum. Read the current regulation text with counsel, because summaries can be incomplete or out of date, and the period runs from each transaction rather than from the closing date.

Tax and payroll rules run alongside it. The IRS says to keep records supporting income and deductions until the period of limitations runs out, generally three years and longer in some cases, and to keep employment tax records for at least four years after the tax is due or paid, whichever is later. A bad debt deduction for unpaid shipper invoices extends the period to seven years.

Treat the federal duty as the floor. A brokerage that also ran an asset-based division, acted as a freight forwarder or handled customs work may carry separate record duties for those activities.

Required records versus the rest#

Required records are the ones a law, contract or open claim obliges the brokerage to keep; everything else is the rest. Sorting the archive into these two groups is the first real decision of a closing, because it sets what must be protected and what the owner is free to decide about.

Why the rest is often the most informative history#

The records that are not required are often the most informative, because they hold the reasoning behind each load. A rate confirmation records a price. The quote history, the carrier calls and the exception threads record how the brokerage got there: which shipper asked, which carriers declined, what the lane looked like that week and what went wrong after pickup.

Owners under cost pressure tend to delete this history first, since nobody is legally entitled to it. That is a reasonable choice if nothing else is planned, but it should be a decision rather than a side effect of cancelling the TMS or letting the email domain lapse.

Who keeps the records after the doors close#

The company that brokered the loads keeps the records, even after it stops operating, so a named custodian has to answer for them. Until the entity is formally dissolved, and often after, someone must be able to respond to a carrier's review request, a tax audit or a subpoena.

If the customer list or book of business is sold, agree in writing which records the buyer receives, who keeps the originals and how the seller can get access to answer claims. Buyers often want lane and rate history, and that request deserves the same rights review as any other use.

• 1Name a custodian, usually a former officer, plus a backup.
• 2Export the TMS, accounting system and mailboxes before subscriptions end, including document attachments.
• 3Store the archive somewhere the custodian controls, with access logged.
• 4Write a one-page index of what is kept, where, and until when.
• 5Record holds from open claims or litigation, which override destruction dates.
• 6Diary each destruction date and note when destruction actually happens.

Four options for the records you are not required to keep#

Records that are not legally required give a closing owner four options: archive them, transfer them with an asset sale, destroy them, or assess them for licensing. The choice is made per record family, not for the archive as a whole.

Licensing means granting an AI developer defined rights to use prepared records under contract. A license grants use, not title, so the company or its successor still owns the archive and licensing can sit alongside archiving. It cannot follow destruction, and it needs someone with authority to sign after the business stops trading.

What stays out of any brokerage package#

Some brokerage records stay out of any licensing package regardless of value: carrier bank and factoring details, driver phone numbers and other personal information, insurance certificates, records under hold, and shipper data whose contract forbids use beyond the service. Shipper names, rates and lanes can often be tokenized or generalized where contracts allow the rest to proceed.

Owner-operators need particular care. A small carrier's MC number, business name and owner may all point to one person, so carrier identifiers are treated as personal information unless they are replaced.

Illustrative: a brokerage with several offices winds down#

Illustrative: a fictional freight brokerage with several offices decides to close after losing its largest shipper. It runs a cloud TMS, an accounting package and hosted email, all on subscriptions that renew monthly.

The owner exports the TMS with documents, the accounting files and every mailbox before cancelling anything, names the former controller as custodian and writes a retention index. Transaction records, contracts and tax files are kept for their required periods, and open cargo claims are placed on hold.

A competitor buys the customer list and receives contact records under a written agreement. The owner keeps quote history, carrier notes and resolved exception threads in the archive and starts a metadata-only fit check, with shipper names and pricing out of scope until counsel reviews the shipper contracts.

How SourceX approaches a brokerage closing#

For a closing brokerage, SourceX's first advice is to preserve records before systems are shut off, because nothing can be assessed after a TMS account is deleted. The fit check in the SourceX five-step transaction collects metadata only. If a package proceeds, the Rights step separates required, held and contract-restricted records, and the SourceX Evidence Packet records who authorized release on behalf of the closed company.