Ken Lund: 75K broker bond no ‘large broker’ move
Following the last I wrote about the $75,000 broker minimum bond — an increase from $10,000 that the Association for Independent Property Brokers and Agents contended constituted an anticompetitive move that would force many out of brokering freight, Ken Lund of the Allen Lund Company reached out to me on what he feels is AIPBA’s unwarranted criticism of the Transportation Intermediaries Association. (Click through the cover image above for my June story on the debate over the original $100,000 bond measure.)
AIPBA’s James Lamb has been vocal here and elsewhere with an assertion that the TIA, by supporting the bond increase measure, is actively attempting to remove small-broker competition from the industry. “I don’t get why TIA is taking all the shots from this guy,” Lund told me. The American Trucking Associations as well as the Owner-Operator Independent Drivers Association, he added, “would have loved [the bond minimum] to be $500,000 or more…. Then when the great compromise comes out, the organization that was fighting for the lowest-possible bond” took all the rhetorical hits.
As Lund, who sits on TIA’s board of directors, notes, “TIA has more small member brokers than anybody and is trying to expand” such membership.
Lund noted TIA’s new bond offer as “trying to create a $75,000 bond that’s reasonably priced.”
TIA head Robert Voltmann detailed in a recent letter to membership a bond offer structured to meet the minimum requirements that is available to members with three years or more of TIA membership behind them. The premium: less than or equal to $3,600 a year, and “it could be as low as $1,600.” For members who joined within the past three years, the “offer is a premium not to exceed $5,600, and could be as low as $1,600.”
Reasonable? Lamb has called potential new bond business the reason TIA wanted the higher bond, but Lund disagrees categorically: ”TIA is trying to create a bond that allows the small broker to get one. James Lamb’s not doing that.”
Lund traces the final compromise on a higher bond to pressure from Congress on the organization to work with OOIDA and ATA to hash out a compromise after many long years of the trucking organizations’ attempts to push legislation of an even higher bond minimum. “OOIDA has tremendous clout on Capitol Hill,” Lund noted, and after near-success on higher bonds, he added, ultimately “Congress said, ‘Look, you guys work together.’ ATA, TIA and OOIDA worked on the grand compromise — and there are really good things in that regulation that will beat back a lot of the fraud. I don’t know why TIA takes all the hits – I think $75,000 is a good number, and a lot of us thought even lower would be good as well.”
As for those owner-operators who do some part-time brokering, Lund admitted the higher bond may well make that business tough to continue. He sees 10 loads a week as about as small as a broker can get and stay viable, citing the difference in shippers’ payment models as chief in the small-brokerage difficulty today. His father started the brokerage business where Lund works today getting two checks from shippers — a small one for the broker, the other to deliver to the carrier. “Today,” he said, “we pay the truckers” what they’re due and “we wait for the shipper to pay us,” however long it takes.
All the same, Lund added, “We don’t want to stop the next Allen Lund Company,” which was launched to begin with as a part-time brokerage itself. “We fought hard against [the above-$75K bond efforts], because we don’t want the next Allen Lund Company to be stopped by us.”
Thoughts? Tell me in the comments.