October is just around the corner. Since the Federal Motor Carrier Safety Administration (FMCSA) increased the 2017 freight broker bond renewal amount to $75,000 back in 2013 and set October 1 as the renewal deadline, that’s the time when many freight brokers renew their bonds.
So if it’s time for your 2017 freight broker bond renewal, you need to get moving soon. Here’s your yearly reminder of what to pay attention to and how to renew your bond!
When Should Your 2017 Freight Broker Bond Renewal Happen?
The right time to renew your freight broker bond depends on your deadline. There are a number of possible scenarios that may apply to you.
- Your renewal deadline may be on or around October 1, 2017
If you complied with the initial requirement back in 2013, then your renewal deadline is likely to be October 1 or in the days before that date. In this case, you must pay for your bond and submit the renewal application no later than 30 days before that. Doing so well before those 30 days is much better though. If you do not renew and pay for it in time, your surety may send out the cancellation notice to the FMCSA, notifying them that your bond is about to expire.
This, in turn, may then initiate the procedure of your license with the FMCSA being revoked which will force you to start the whole process anew, if it happens. Or you will have to work on having your bond reinstated which is a complicated and unnecessary procedure. Typically you will receive a reminder from your surety at least once or twice before your bond runs out – 90 and 60 days in advance. Ideally you should renew your bond at that time.
- Your renewal deadline may be between October 1 and December 1, 2017
Back in 2013 when the bond amount was increased, the FMCSA extended the initial deadline with an additional two months as a response to protests within the freight broker community. If you made use of the extended compliance period back then, your renewal date will be somewhere between October 1 and November 1. The ‘no later than 30 days before’ condition for renewal applies here too, regardless of the exact date of your bond expiry.
- Your renewal deadline may not fall on either of those dates
Freight broker bonds are valid for one year from the date they are issue. Therefore, brokers who began doing business after the October 2013 changes will have a renewal deadline coinciding with the date their bond was first issued.
How Much Will You Have to Pay?
2017 Freight broker bond renewal cost may vary from one year to another. The reason for variations in the cost of your bond can be due to a number of factors but personal credit score always plays an important part.
So, if you’ve improved your credit score over the last year, you can expect your surety to offer you a better rate on your freight broker bond than it did last year. If your credit has worsened, you are likely to get a higher rate to offset the risk involved in bonding applicants with lower credit scores.
Other factors that influence the cost of your bond are your financial statements, the amount of time you’ve been in the business and how much experience you have, but also the surety bond agency you work with.
Should You Choose a Different Agency?
If you’re not convinced you’re getting a good deal, you may want to check other surety agencies, but be careful. Make sure that the agencies you are working with are doing soft credit pulls which do not affect your credit score. If you file too many applications with agencies that do hard credit pulls, your personal credit may suffer because of all those agencies checking it.
At the same time, your choice of surety bond agency also significantly influences the cost of your bond. Not all agencies have access to the same markets and are able to offer you a lower rate even if you deserve one. When picking the agency you want to work with or get a quote from, you should carefully pick those that are certified and licensed to work as agencies.
You should also look for those that work with surety bond companies who have a high rating – A-rated or more and are T-listed with the U.S. Department of the Treasury. These companies are both financially reliable and can often make the best and lowest offers on bonds. In this way, your choice of agency can have a significant impact on your freight broker bond cost.
Further Advice for the Freight Broker Bond Renewal?
Do you have any further advice to share with other fellow freight brokers? How do you typically renew your bond or look for an agency? Please leave us a comment, we’d like to hear from you!