Starting next October, brokers will need to file a $75,000 surety bond or trust fund agreement. The increase is due to the Moving Ahead for Progress in the 21st Century Act (MAP-21), also known as the Highway Bill. It was signed into law on July 6, 2012. Certain provisions within the law have an effective date of October 1, 2013.This legislation was designed in part to assist the Federal Motor Carrier Safety Administration (FMCSA) with its goal of increasing highway safety and to prevent fraud in the trucking industry through an increase in both the level of financial responsibility of freight brokers as well as to raise the bar to enter the industry. - The law provides for an increase in the bond amount required for companies with broker registration from $10,000 to $75,000. - Freight forwarders will be required to post bonds. If a company has both broker and freight forwarder authority, two bonds will be required. - Carriers that broker loads will be required to obtain brokerage authority and post a bond. - Includes a ban on “reincarnated” carriers. DOT can revoke registration or authority of a “reincarnated” carrier or levy a fine. This also applies to failure to disclose important facts. - Requires disclosure of family ownership of multiple transportation companies: Carriers, brokers and freight forwarders must disclose any familial relationships with owners of other transportation companies. - Establishes a national driver registry: There will be a national registry of drivers with CDLs, including driving history and drug and alcohol test results. - Surety providers will need to inform the U.S. Department of Transportation of any surety cancellation, and - If a broker or forwarder should fail, surety providers have to publicly advertise for claims for the 60 days that follow the notification of failure or surety cancellation. Without any doubt, this is going to be a major game changer for the entire trucking and logistics industry.
Sal Banuelos, CEO
Salvador Banuelos is internationally known for the debt collection results he has provided to the freight transportation and import/export industries worldwide for the last 13 years.Author of "Credit and Collections in the Freight Industry Handbook"You can also follow him at twitter, facebook and Linkedin.