GSIS

How The New Freight Broker Bond Could Effect You

Effective October 1, 2013 there will be a new $75,000 broker bond required that is an increase being implemented by the Federal Motor Carrier Safety Administration from the previous requirement of a $10,000 bond. This will apply for all ICC Property Brokers and Freight Forwarders. To better understand what is happening with this, we need to review some of the opinions of how this action is regarded, and what is currently taking place by those who oppose this section of the act.

The Moving Ahead for Progress in the 21st Century Act includes a $75,000 Bond provision that is being opposed by several groups. According to an article from Logistics Management, the Association of Independent Property Brokers & Agents (AIPBA) has filed a federal lawsuit against the $75,000 bond, claiming that it could cause shippers' freight rates to rise. "The brokers say that bond provision is illegal and anti-competitive." There are several points being argued against this bond.

Without going into a lot of political bickering, it can be summed up best by stating that it is being argued that this particular section of MAP21 pertaining to the new bond limit is unconstitutional. Therefore, a Federal lawsuit has been filed by the Association of Independent Property Brokers & Agents (AIPBA). According to a statement made by AIPBA President James Lamb, “We are seeking justice through the federal court system for the various small business players in the trucking industry that would otherwise be adversely affected.." It is expected that the U.S. District Court will decide this section of MAP-21 is unconstitutional and will issue an injunction prior to October 1.

In the meantime, talk to an expert to understand how this will directly affect you and your business. There are surety programs available for all sized Property Broker and Freight Forwarder companies. Filing a new bond from BMC-84 to replace the existing form will satisfy the requirement. And, keep in mind that the $75,000 bond is required for any Property Brokers that previously had the $10,000 bond as well as Freight Forwarders who are now also included under the new law.