Whether you’re a trucking broker, motor carrier or owner of a trucking business, the new $75k broker bond requirement can have an impact on you. Many companies sub-contract freight on a regular basis and the Federal Motor Carrier Safety Administration (FMCSA) views this type of activity as “brokering.”
If you partake in any brokering activity – meaning you are recruiting and hiring drivers to pick up loads, then the FMCSA will need you to have some type of broker authority. This legislation has been applicable to the trucking industry since October 1, 2013. The FMCSA notified brokers and carriers of this new rule in November 2013, making it vital that you have your brokerage authority to avoid any potential repercussions to your trucking operations.
What can happen if you don’t renew your bond?
The relatively new broker bond requirements came into effect after the MAP-21 (Moving Ahead for Progress in the 21st Century Act) was signed in July 2012. Over the past few decades, freight brokers had to post a $10,000 broker bond, but the new federal legislation means they now need a $75,000 broker bond. In a way, this is a positive move for the industry as a whole, because carriers have a much better chance of collecting on their freight bills.
Failing to comply with the new bond requirements could result in the FMCSA closing your operations. If you have a division which partakes in activities that can be seen as “brokering,” then it is advisable to renew your bond on time each year.
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