Highway bill compromise raises broker bond to $75,000
Part of the tentative highway reauthorization deal that the House and Senate conference committee ironed out increases minimum bond required of transportation brokers to legally operate. Language in the tentative agreement raises the surety bond minimum to $75,000 from $10,000, where it had been since the deregulation era. Freight forwarders are likewise be subject to the surety requirements.
The bill also stipulates that surety providers must notify the U.S. Department of Transportation of any surety cancellation, to be posted to the DOT website, and must pay uncontested claims within 30 days. In the event of broker or forwarder business failure, providers are required to publicly advertise for claims for sixty days following notification of business failure and surety cancellation.
The Owner-Operator Independent Drivers Association and the Transportation Intermediaries Association, a brokers’ group, jointly supported an increase in the bond minimum level to $100,000, but opposition from smaller brokerages, organized around the Association of Independent Property Brokers and Agents, helped bring the level down a bit. AIPBA had favored a bond minimum level of $25,000.
For more on the debate that led up to the increase, see the “Beefing up the bond” feature in Overdrive’s June 2012 magazine.