If you’re like many freight brokers in the U. S., you have not yet secured the $75,000 freight broker bond or trust fund required by the FMCSA to operate legally. And, if you’re like many motor carriers who also broker excess freight, you have not considered the new bond requirement as applying to you.
MAP-21 for Brokers and Forwarders
Moving Ahead for Progress in the 21st Century (MAP-21) made mandatory changes to FMCSA programs that took effect October 1, 2013. Provisions affecting freight brokers and forwarders included an increase to the financial security requirement from $10,000 to $75,000 and the inclusion of freight forwarders in the bonding requirement.
In addition, motor carriers are required to acquire broker authority if they are also performing brokerage functions.
What if I Only Occasionally Broker Loads?
According to FMCSA guidance published September 5, 2013, the new law expressly requires motor carriers who broker services, even if only occasionally, to register as both motor carrier and freight broker. In order to be registered as a broker, evidence of a surety bond or trust fund must be on file with the FMCSA to ensure financial responsibility. Both forms of security ensure payment to carriers and shippers will be made if the broker fails to perform according to contract terms.
Motor carriers who broker loads without proper registrations are not only leaving themselves open to penalties from the FMCSA but may also be subject to private civil actions.
Freight Broker Bond Stands at $75,000
Although there has been much discussion on fighting the freight broker bond increase, efforts to date have been unsuccessful. The FMCSA intends to fully enforce the requirement and has indicated letters of revocation will be sent to brokers and forwarders not in compliance, providing 30-days’ notice before terminating licenses.
How Do I Find a BMC-84 Bond?
Until recently, it was difficult to find an affordable option for the $75,000 freight broker bond. Premiums were sky high and collateral was usually required.
JW Surety offers an exclusive program that helps smaller brokers and forwarders meet the $75,000 financial security required. Approvals with no collateral are possible even with less than perfect credit. Most freight brokers and forwarders can get approved instantly online.
Don’t risk penalties or revocation of your authority. Visit our freight broker bond page to learn more about freight broker bonds and the $75,000 requirement.