Another take on broker bond increase: TIA says impact on brokers, industry will be minimal

| December 11, 2013

dockThe number of brokers in the Federal Motor Carrier Safety Administration’s database has seen quite a hit since Dec. 1 — falling by more than 7,500 brokers — and some are pointing to the Dec. 1 effective compliance date for the required surety bond increase as the reason.

The dropping numbers, however, may not tell the whole story, said Chris Burroughs, who’s with the government affairs staff of the Transportation Intermediaries Association, a broker trade group.

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While many of those brokers may have had their licenses revoked for not complying with the new $75,000 bond minimum, the fact the numbers are so high could be more due to an outdated database rather than an overall inability of brokers to comply, Burroughs said. “We feel like there were a lot of people out there who had active authority but weren’t actively doing business and hadn’t been for some time,” he said. “The database had a lot of scrubbing to do.” 

TIA, along with the Owner-Operator Independent Drivers Association and the American Trucking Associations, supported the increase, which was included in the MAP-21 highway funding act passed last year.

The increase to $75,000, Burroughs said, was something TIA, OOIDA and ATA sat down to work out, finding a compromise that worked for all three groups.

Even though the broker numbers are falling, he said, TIA “absolutely still support(s)” the increase, and the impact to the brokerage industry and the trucking industry will be “minimal, if nothing at all.”

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As reported previously by Overdrive, OOIDA supported the increase as a way to ensure truckers are paid for loads hauled, as the previous $10,000 minimum often times wasn’t enough to make up for over-extended brokers. 

James Lamb, president of the Association of Independent Property Brokers & Agents, has said the bond increase has pushed 35 percent of brokers out of service and will continue to force smaller brokers out, which could leave only larger brokers in the industry.

Lamb’s group is also still fighting the increase in court. 

Burroughs, however, said the increase doesn’t create a big brokers vs. small brokers issue, but rather a “funded vs. under-funded” issue. The impact on TIA’s membership, he said, has been minimal.

Overdrive covered the broker bond issue in an in-depth report last year, when the bond increase was tied to the highway funding act. Click here to read that story, which covers how it affects owner-operators and how it impacts brokers.

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