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Trucking Regulation Experts:
FMCSA Denies Broker Bond Exemption

Truck Regulations Expert Witness / Truck Standard of Care Expert Witness Articles

By Scott Greene

Bond Increase

As of December 1, 2013, freight brokers are required to have a surety bond with a minimum value of $75,000. This amount is up from the $10,000 which has been in place since 1980. A broker surety bond guarantees the broker will pay legitimate freight bills in the agreed-upon manner.

The Association of Independent Property Brokers & Agents (AIPBA) which is based in Fort Lauderdale Florida, strongly opposed the increase.

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Exemption Denied:
The FMCSA denied a request for exemption from the $75,000 minimum bond requirement for freight-forwarders and brokers. The request, from the AIPBA, requested an exemption for all of the forwarders and brokers, not a single broker.

The FMCSA believes it doesn’t the authority to grant such a wide exemption, the AIPBA believes it does. The FMCSA went on to note that exempting brokers and forwarders from the bond requirement would, not be “in the public interest” and thus outside the bounds of appropriate action.

The Transportation Intermediaries Association (TIA), based in Alexandria, Virginia and the Owner-Operator Independent Drivers Association (OOIDA), based in Grain Valley, Missouri believe that the FMCSA is standing on solid ground. These organizations back the FMCSA position that: “Granting an exemption to all brokers and freight forwarders would flout a clear and recent congressional directive and statement of the public interest”.

OOIDA’s commented that: “Part of the efficiency of the current transportation marketplace is that brokers match motor carriers available to haul freight and shippers needing to move freight,” OOIDA goes on to say that “parties who do not have an ongoing relationship, but who might make mutually beneficial connections on a load-by-load basis. This efficiency in the marketplace is increased greatly when motor carriers feel comfortable taking loads from brokers who they do [not] know.”

The AIPBA’S James Lamb said of the decision: “We have faith in the judicial system and are confident that justice will ultimately be served -- albeit very slowly -- through the federal courts and we thank the Small Business Administration for its assistance in getting FMCSA to finally pull the trigger with a decision so these cases may now proceed .” There are currently two federal court cases challenging the bond.

The American Trucking Associations (ATA) based in Arlington, VA along with the OOIDA and the TIA support the bond increase to protect carriers and drivers seeking payment from brokers for loads hauled.

 

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