So you are a Truckload Broker and you work out of your home. You have a nice little business. You have a handful of customers, a few carriers that haul your loads, and the ultimate freedom to work on your schedule. You may have a different outlook on your business and you are constantly working to grow your business. You rented a small commercial facility and have hired a couple of employees. October is right around the corner and this Halloween could be the scariest you have ever encountered. No, this is not because there will be kids knocking on your door with costumes on or because they are playing a scary movie marathon on national cable channels. It is because in October your surety bond is going from $10,000 to $75,000. For the small broker out there that operates on his or her own, this could be devastating.
Understanding the “why” is extremely important to the future of your business. The current bond at $10,000 was set forth in the de-regulation days in the 1980’s and is very outdated. Every day larger brokers with deeper pockets are the target of fraud. With a bond that is so easy to attain at current levels it harbors fraudulent activities. Stolen loads, double brokering and all things in between happen because people that do not have established businesses are given the ability to try to operate and many fail and resort to criminal acts. The increase in bond money necessary is to try to eliminate these individuals that give all of us other brokers a bad name.
So what are the options that you have? Well, you could close up shop, but who wants to throw away a steady income stream of any size? You could find a way to try to get that $75,000 to keep your license and continue to do business but then you would have to increase your business levels significantly to make up the difference. Another more logical option would be to join a larger 3pl that has a Broker Agent business model.
The Broker Agent model gives you the ability to attach your business to a larger company. You still reap the benefits of being a small business owner, but now you have the backing of a larger organization, and everything that comes with it. The number one thing that can help you in not only sustaining your business, but growing it, is the capacity that these types of firms can offer you through lane data. You also get to utilize their TMS solutions. The addition of a high-tech software into your business can boost your efficiencies and in turn make your business more profitable. You also get the protection of not having to run everything under your own MC #. This puts the liability and risk on a different company so you can focus on your core business, brokering freight. This can also help you in further broadening your service offering. The larger 3pl’s usually have an LTL product that you can start to offer to your customers which enables you to enhance your offering.
There are many Broker Agent programs out there, so do your research and make the right choice, if you are going to go that route. You want to make sure that the software, splits and capacity capabilities are where they need to be to fit your business.