Bill would strengthen freight broker oversight

Jill Dunn | June 16, 2010

Sen. Olympia Snowe has introduced a bill that would strengthen regulatory oversight of brokers and freight forwarders.

On June 14, the Maine Republican introduced S. 3483, the Motor Carrier Protection Act of 2010, which was referred to the Committee on Commerce, Science, and Transportation with one co-sponsor.

The Owner-Operator Independent Drivers Association and the Transportation Intermediaries Association contributed to the bill. When introducing the bill, Snowe said little federal oversight is currently provided, other than requiring brokers to pay a $10,000 bond.

“According to trucking experts, a broker can rake in revenues far in excess of that $10,000 upfront payment in less than a month, allowing them to disappear in the night, losing their bond but more than making up for it in revenues stolen from hard-working truck operators who are left with nothing to show for their delivery, and no way to recoup those losses,” she said.

One group operated 12 freight broker companies over a three-year period in Georgia, defrauding truckers and evading law enforcement by continually changing business names and locations. The bill increases bond to $100,000 and applies the bonding requirement to freight forwarders.

The bill also:
• Ups requirements for entities seeking broker/forwarder authority.
• Establishes strict penalties for violations, including unlimited liability for freight charges for brokerage activities without a license or bond. 
• Authorizes private damages remedies against companies that violate Federal Motor Carrier Safety Administration regulations.
• Implements an annual registration requirement to renew broker/forwarder operating authority and generate revenue for FMCSA enforcement.
• Establishes strict regulations on bond providers and how bonds are administered.
• Requires separate registration numbers per authority and whatever authority used in a transaction must be in writing. 
 

  • The AIPBA

    This is to advise you that the United States Senate passed the Highway
    Bill (S. 109B; formerly S. 1813) today by a vote of 74-22. Hidden deep
    within, is a provision for a $100,000 property broker bond… an
    anti-competitive measure that is designed to put up to 17,000 of the
    Industry’s brokers OUT-OF-BUSINESS. This bill has now been sent to the
    House of Representatives for ratification. We expect they will act and
    the president will sign the bill into law on or before close of
    business: Friday, March 30, 2012. There is therefore a limited time
    for you to act!

    If you are a broker, you should know that most bonding companies have
    indicated they will have to drop out of the game due to their
    increased risk exposure, which means it will be EXTREMELY DIFFICULT for
    you to secure the new required $100,000 bond. You should also know
    there is NO GRANDFATHER CLAUSE for existing brokers. We expect you will
    have only one year to put up the $100,000 CASH COLLATERAL that the
    remaining bonding issuers will require OR FMCSA WILL BE FORCED TO SHUT
    YOU DOWN.

    If you are a carrier, you should expect this will result in LESS CHOICE
    and LOWER FREIGHT RATES once the TIA’s big broker members take over
    control of the market. Shippers– and ultimately consumers– will PAY
    MORE for transportation, and owner-operators and motor carriers WILL
    BE PAID LESS. Most experts agree this legislation is BAD for EVERYONE
    in the industry except the big brokers.

    * TO ACTION********

    We recommend that you CALL and FAX your Representatives in the House
    IMMEDIATELY, using the contact list for the 112th Congress below, and
    ask them to VOTE NO on the Senate Highway Bill (S. 109B):
    http://www.theorator.com/government/house.html.

    To show the voting power of those who would be adversely affected by
    this bill, we also recommend you sign the online petition at:
    http://www.petitiononline.com/100KBOND/petition.html.

    Because this provision is attached to major highway legislation, it is
    VERY IMPORTANT that you DRAW ATTENTION to what most member of Congress
    consider a “minor detail”. Tell them this $100,000 bond would have the
    opposite effect of creating jobs and would PUT YOU AND TENS OF
    THOUSANDS OF BROKERS & FREIGHT AGENTS OUT-OF-BUSINESS. Ask them to
    amend the Senate bill to remove the $100,000 bond provision.

    For more information, please visit the Association of Independent
    Property Brokers & Agents’ (“AIPBA”) website at
    http://www.IndependentPropertyBrokers.org.

    Although AIPBA is an ALL VOLUNTEER trade group, your FINANCIAL HELP to fight this attack on small business is requested at this time.

    Please consider joining AIPBA or renewing your membership for 2012 and
    paying your dues online:

    http://aipba.vpweb.com/Join-Renew.html

    You can also make a one-time SPECIAL DONATION to our political action
    committee here:

    http://www.mcssl.com/SecureCart/ViewCart.aspx?mid=9D64D0CD-9F5F-4CC7-A66B-8CA890450101&sctoken=81a7c47b0ab946e8a99ebf7e9a173b79&bhcp=1

    Regards,

    JAMES P. LAMB
    AIPBA President

  • Surety One, Inc.

    There is a suit to stop the enforcement of the new $75,000 requirement.

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