Broker group continues push against bond increase, files for exemption for all brokers

| December 26, 2013

dockThe Association of Independent Property Brokers and Agents appears to be taking a different route in its ongoing battle against the increase in the minimum bond amount freight brokers must carry — It’s filed an application with the Federal Motor Carrier Safety Administration asking it to exempt all brokers from the increase.

A notice of an application for exemption was published in the Federal Register Dec. 26, and the agency is accepting public comment on the exemption application until Jan. 27.

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The increase was required by the MAP-21 highway funding act passed last summer. It stipulated brokers must have a minimum $75,000 surety bond, up from the previous $10,000 minimum. FMCSA published a final rule requiring the $75,000 Oct. 1, with an enforcement date of Dec. 1.

Between Dec. 1 and Dec. 10, AIPBA said more than 8,500 brokers lost their operating authority due to the increase — About 35 percent of all federally licensed brokers.

The Transportation Intermediaries Association, another broker trade group, supported the increase, and one of its staffers, Chris Burroughs, told Overdrive earlier this month that while the bond increase may have played a role in the thousands of brokers who lost authority, the issue mainly stems from the registration database needing to be updated, he said.

The American Trucking Associations and the Owner-Operator Independent Drivers Association also supported the bond increase, with OOIDA saying it will protect carriers from fraudulent brokers.

AIPBA has been fighting the increase in court since July, when it filed a lawsuit against FMCSA trying to stop the bond increase. A federal court in December denied AIPBA’s request, but AIPBA has appealed the ruling.

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In its exemption application to FMCSA, it asks the agency to “permanently exempt all property brokers and freight forwarders from the $75,000 broker bond provision of MAP-21,” according to the Federal Register notice.

AIPBA said in its request that the increase will force “the majority” of brokers out of the business, echoing what its president, James Lamb, told Overdrive earlier this month — that he thinks eventually 75 percent of brokers will lose operating authority because of the bond hike.

TIA, however, disagrees with that number, saying the impact on the broker industry will be minimal.

AIPBA also wrote in its application for exemption that the increase discourages fair competition in the transportation industry and will negatively affect rates, which the group says will lead to higher prices for consumers.

To comment, visit regulations.gov and find the rule using Docket Number FMCSA-2013-0513. Comments can also be made by mail (Docket Management Facility (M-30), U.S. Department of Transportation, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590-0001) or fax (1-202-493-2251).

  • Jerry

    Baseless; when I first began trucking as an independent 3 years ago, the 2 & 3rd broker embezzled all of the money. Being new-to-the-game, some of the brokers first couple of question when accepting the load was, do I use a Factoring Company. At the time, I did not use a factoring Company, and, told him as much. However, I was looking around for a factoring company to use. By the time, the bill were sent in, the were the first freight bills sent to the factoring company. Believing, the factoring company managed all of accounting. The soon sent my freight bills to “recourse”, i.e. they charge me back, the money they paid for the freight bills. Attempting to get ahold of the broker, he was no where to be found. By the time, I attempted to file a claim against the Brokers $10,000.00. bond, the other small independent truckers had filed against the bond and collected…myself, being new to the game and filing so close to getting something…I received no money. Having several Brokers stiff you while your new to the business of trucking is hard to endure. Maintenance issues.come up and longer intervals occur in making the needed repairs. Safety is affected. Brokers have no grounds to stand on when requesting a lower bond amount. Mitigation must occur when working with a diverse group of brokers…ethics are not all the same, some brokers are aware of the time delays and little oversight by State Regulators that occurs when brokers withhold money. Then the issue to have enuff money to sue a broker in civil court. being a new Common Carrier you find the worst in brokers.

  • g

    Eliminate Brokers is a better idea…they are the Scum of the earth Leaching Vermin….Maggots.

  • g

    Sure..brokers answer to Nobody…they are CROOKS..most are Ex Cons…They need to be certified and Vetted by Cop agencies and held accountable..for running legit Business?? No…they only Steal and Leach…they are Parasites, Crooks, Liars, Thieves, Dirtbags….what a filthy stinking industry trucking is…

  • guest

    Freight Broker is just a polite word for P.O.S. LEACH. Bloodsucker. Parsite. Worthless Turd.

  • Kendall Oakleaf

    Not all Brokers are bad ALOT of mom and pop brokers are honest people they are out here trying to make a living just as you and I are. But I do believe that there are a handful of bad ones as well, But if all the small brokers are out of the picture guess what happens to rates with no competition all the big chop houses move in and monopolize it. Don’t be blinded by ignorance this could help Owner Operators as well as hurt them. The ATA,FMCSA,DOT,and State Police are the ones to be looking out for they are out to ruin your business buy putting trucks out of service false or untrue violations, FTSMFERS

  • Superior

    Your recourse would be against the shipper. Even if they paid the broker they are liable to the trucking company for payment.

  • Stretch

    Jerry,
    You are pitiful. I am a trucking company and broker. I have been screwed over by more drivers than brokers in the last 10 years. At least with a broker there is a mean to get your money. When a driver cuts you the only action you really have is small claims court for non-payment. I wish they would set up the broker rates based on company size and also force drivers to maintain minimum bonds for the broker side on my company.

  • Stretch

    Like them or hate them brokers are a necessary evil just as truckers. There are good ones and bad ones. I’ve had both in my business. If you push out all the small brokers like myself all that is left are the big corporate raider types that have never run a trucking company and have no idea how pay truckers properly. You want to make things better quit taking cheap freight. As long as you do then the scam companies will continue to flourish. As was stated earlier VET the brokers, I agree but also VET the truckers. There are just as many crooks as you say and criminals out there also. From the broker side of my company there is little protection for my money. Even the customers have become so suspect of the drivers and the brokers that negotiating payment is an every revolving business.

    I apologize to Jerry earlier the pitiful comment was meant for g replying to Jerry.

  • g

    YOU are the “small” hick and foreigner broker that NEEDS to LEAVE trucking. You not Only could Not address this communique to the right person…ME…you’re Literacy is in question as illustrated in your Paragraph/Diatribe. How could YOU possibly be deemed as ACCOUNTABLE for your Actions?? You seem like a 1950′s back woods clown…POSING as a MODERN Day businessman?? I would NEVER do business in this day and age with an Incompetent illiterate like YOU. Please quit the industry today.

  • g

    Trucking is a MODERN regulated industry..we have Hours of Service Laws to follow today and tons of new crippling regulations and “data bases” that cops crucify truckers with. The LAST thing we need is Old Time brokers like Old Stretch (below in comments) and his questionable “bidness practices”. He probably operates out of his bedroom or maybe a shed near his single wide…in the Boondocks. He will expect a trucker to run Overweight if neccessary, dodge the scales, speed, and dummy up paper logs…to be “one of His regulars”….anybody else is not profitable for the Shoot from the Hip old time broker….who may or may Not pay the trucker……Truckers need MODERN intelligent established and knowledgeable brokers who PAY quickly without hesitation and hemming and hawing and haggling. Truckers TODAY have zero time to fight for PAYMENT or to deal with an OLD TIME JACKASS who is Not familiar with The new LAWS heaped on the Trucker and CONSTRAINTS that cop agencies have placed on his OPERATION.

  • g

    Strech..you are the pitiful one..I cant imagine what mickey mouse “brokerage” you run or WHO in their right mind would haul one of yer loads..you seem rediculous…and who needs you? Modern quick paying, priced right “brokers” who are ACCOUNTABLE…efficiency and prompt Payment is what is needed..not back woods clowns like you….time will wash dopes like you down the sewer where you belong…YOU are part of the PROBLEM….quit trucking today and do the world a favor….your old time ways are no longer needed..this is Not 1955. Learn to spell too.

  • g

    Gippo Brokers….need to be monitored, supervised, held accountable….by the GOVERNMENT just like the Trucker….instead they lie, cheat, swindle, break the law, expect the Trucker to break the law……ON TIME PAYMENT in FULL is what is due the Trucker….any volating broker should be Visited by FMCSA just like truckers are….and they need to be SHUT DOWN and hauled off to PRISON…they are crooks and need to be MONITORED by cop agencies just like truckers are….they have been RIPPIN OFF truckers since the wheel was invented.

  • g

    NEVER trust a”broker”…if his lips are moving..he is LYING. They are Crooked lying thieves and NEED desperately to be REGULATED and FORCED to PAY promptly…they need to be under a Microscope just like truckers are…they hide in the shadows and lie, cheat, swindle..to their CoalBlack hearts content……Cop agencies need to put their operation in a ViceGrip hold and Force them to COMPLY, OBEY, CONFORM…just like truckers are Forced to do in todays “modern trucking”.

  • Grrr

    If you broker a load to a o/o trucker, what exactly do you expect the trucker to pay you? The trucker hands you the pod and expects to be payed while you the brokers play the nasty game of 15, 30, 40, 60 days to payment and in many cases never ever pay. Most brokers run their business on someone’s else money for weeks to months on end, while the trucker incurs immediate operating expenses like equipment, maintenance, licensing/running rights and insurance, fuel, on the road expenses or driver pay, etc. As an o/o I go in the hole running your load/s while I’m waiting to get my pay, if I ever get payed at all and you the brokers hiding in your skippies in the basement of your house with a phone line, internet service, a computer and a multifunction printer/fax/copier you buy from walmart for $1oo, have the audacity to bitch and moan about your harsh situation? I’m the one that has to insure the cargo besides everything else and has the responsibility and the obligation to move and deliver the freight in good condition and timely fashion, and what do you do? Collect $$$ upon the completion of my work and then play games with me? Get the hell outa here you frigging schmucks!
    There is absolutely no need for “middleman” schmucks out here!
    If you butch about truckers, then I’ve got the solution for all y’all scumbags brokers: Buy your own trucks, maintain them, license and insure them, put up with all gov. red tape involving trucks, hire drivers, pay them weekly, and move your own darn freight the way you like it and keep all the darn money you collect!
    Otherwise, shut yer frigging stinking trap and pay the man that actually does the work!

  • Grrr

    What a bunch of bellyaching bastards! They have a fraction of overhead cost compared to the overhead costs incurred by an o/o trucker and they bellyache for having to post a reasonable bond? Most of these shady brokers will rent a cheap room in some crappy building, get a phone line, internet service, an old $400 computer and a $100 copy/fax/printer from walmart, an old desk, chair and filer cabinet from a garage sale, post a $10,000 bond and act like they deserve all the money in the world. In retrospect, o/o trucker goes in the hole for $200,000 buying equipment which he has to maintain with more $$$, license, insure the equipment, cargo and liability with more $$$, has to purchase the fuel for deadheading and running a load with more $$$, do all the work of loading and unloading, transporting the load from point A to point B in a safe, good and timely fashion, put up with all the gov. bull and all the hazards of the road, attitudes from law enforcement, shippers. receivers, LOAD BROKERS and idiots of all kinds, all this and he’s at the bottom of the barrel when it comes to get payed?
    Am I supposed to shed a tear for the load brokers?
    Get outta here!
    If I had my way about it, I’d get rid of all these scumbag middleman garbage all together.
    You book a load from a customer, the you haul it! If you don’t have the means of hauling a load, then you ain’t got no business being in trucking! Simple as that!

  • g

    Exactly…Very Well Said!! Brokers are merely a pimple on a truckers Ass. Unnecessary MOOCHES.

  • g

    Well Said!! Middlemen are the PROBLEM…they need to be eliminated…..Parasites is allthey are and usually CROOKED. They have a HORRIBLE reputation in trucking and that speaks for itself.

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  • g

    They allow the “Mickey Mouse Club” of “brokers” to operate in their pajamas with a laptop and phone and printer….total B.S. rediculous Anus industry….floods of illegal aliens hop over the fence and end up driving truck for Crooked irresponsible “brokers”/logisitics companies….industry is a NIGHTMARE….beyond belief what is happening in trucking today…..

  • g

    Yep..let GIPPO be yer “broker” of choice….the first choice of the illegal alien! Hurry on down…..their “shippers” warehouse is filled with illegals too! Feel right at Home! We speaky Espanol!!! JOSE GIPPO LOGISTICS…..classes on how to Hit and Run effectively too!

  • Jerry

    To Stretch: From Jerry- I’ll voice my Case to the Brokers Group petition with Regulations.gov, as a voice against the bond increase. I have real world experience, and I believe, if my life experience is heard as well as other independents the Regulators will want to see Truckers find growth and focus more money to maintenance versus increasing our Tax write offs by decreasing our gross revenue thru non-payment of a freight bill of lading. (you got under my skin, I work thru a lot of questions for you to hand wring about a few dollars increase on a bond, to a total bond cost that is less than my single freight bill pymt. How many loads did you broker in just that single day? Baseless

  • James P. Lamb

    Have you experienced a problem getting paid by a broker who was put out
    of business by MAP-21′s new bond law? (Only carriers or independent
    truckers with an MC Number should answer this question)…

    VOTE HERE: http://www.linkedin.com/groupItem?view&gid=121014&type=member&item=5829315826909474817&trk=groups%2Finclude%2Fitem_snippet-0-b-ttl

  • James P. Lamb

    In OOIDA’s World, Two Middle Men are Better than One?

    I posted this broker bond related comment on another thread but its worth being posted here:

    Simply stated, this is a matter of classic supply and demand economics.

    The theory, here, is… if you reduce the supply of brokers and the demand for loads stays constant, then the rates offered to brokers by the remaining brokers will decrease because the truckers have less options and choice and are at the mercy of the mega brokerages. That’s a tough pill to swallow for the trucker who doesn’t like brokers to begin with but it’s now the reality in his world. This is the same theory that causes you to pay $6 for a hot dog at a baseball game in New York or Miami. They can charge $6 because the vendor has a monopoly and there is no competition to keep them in check. Where else are you going to get a hot dog in the middle of the game. And where else are you going to get a load now that nearly 10,000 intermediaries or 40% of the industry are gone?

    The theory is being proven right now as in December, according to the Consumer Price Index, prices went up. And according to the TransCore DAT Trendlines stats, rates for truckers in December went down for all types: standard vans, reefers and flatbeds. Whether you know it or not yet, YOU are the secondary victim of the $75,000 if you are a trucker. But eventually, you will see the light.

    What has happened, here, is some formerly independent brokers that were making 100% of the transaction have gone to work for the bigger brokerages and now earn 60% of the commission. And whereas those same people could offer a trucker a high rate as the broker (with a 15% commission going to them), they are now selling the load at a lower rate as an agent so that the brokerage they work for can realize its ideal 22.5% commission rate. That means, for every $1,000 load, whereas this guy working in the brokerage industry used to walk away with say $150 in commission as an independent broker and $850 went to the truck; now, the brokerage takes $225, the trucker gets $775. And the guy doing the brokering (now an agent of a mega brokerage) gets $135. In fact, he is now actually motivated to try and place the load at a rate even lower so that he can get back to his original $150. All you have done in this equation is add a second middle man. Now instead of there being just a broker, there is now both a broker and an agent dipping into the trucker’s pocket.

    GREAT JOB, OOIDA!

    It sounds like some of you truckers and carriers just have a problem with the existence of non-asset based intermediaries and you need to get over it already for your own sake. Trucking and freight transportation arrangement as tracked by the Department of Labor are uniquely different businesses. And when it comes to those $11.4 billion companies operating out there, you will never get rid of the middle man. But you might just make him more powerful at your own expense. If that is your goal then sit back and do nothing this weekend and try and let the status quo be. Which brings us full circle back to what I told OOIDA in 2010: “Be careful what you wish for… because you just might get it.”

    I can’t wait for Todd Spencer to start getting all those calls when truckers realize they cut off their nose to spite their face and shot themselves in the foot with this $75,000 bond. And we will be more than happy to help them understand what an unwise move this truly was.

    Last Call for Comments in Support of the AIPBA Broker Bond Exemption Application before your Rates Go Down Even Further, Truckers!

    There is still time to fix this and put the big and elitist brokers in their place. But you have to act fast. You truckers have just one business day left to get your comments in to support the AIPBA exemption application to help reverse this before its too late.

    http://www.exemptionapplication.com

    And when you write your comment in support, tell FMCSA that you are a trucker or carrier and that you have not been fooled by TIA and the mega brokers. Because you are smarter than that.

  • Ai Pba

    Click here to learn about TIA’s Dirty Little SECRET:
    The $75K Broker Bond was really to stop TRANSPARENCY, not Fraud.See:
    http://clt.bmetrack.com/c/v?e=4F18CF&c=37059&t=1&l=88F073A&email=NjIs2zPPf%2BwcIw8YVUhFKsP4m19V0u%2BD&relid=less

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