Channel 19

Todd Dills

More on broker bond increase, highway bill

| June 26, 2012

“Fraud exists in both the brokerage and the motor carrier industries, and increasing the bond will have no effect on fraudulent operators. Those advocating raising the bond assume that a company’s intent on fraudulent activity will nonetheless meet the legal requirement of getting a higher bond. A company starting a new brokerage every Monday, for example, is unlikely to get any bond, let alone one worth $500,000.”

As Voltmann rightfully said in 2004 — before he sold out the little brokers — it is the illegal brokers who are the real problem. As for Jim Sanders, he is right on. The $100,000 bond would put up to 17,000 of the existing 20,000 brokers out of business, including most AIPBA members.

It is now the 11th Hour and a Highway Bill is expected this week. We are hoping lobbyists on our side will get the amount changed from $100,000 to $25,000, which would fairly adjust the current $10,000 bond last set in the late 1970s for inflation. However, if the $100,000 bond is passed the remaining 3,000 big brokers will be able to offer lower freight rates to carriers and owner-operators. TIA and the big brokers will not address the fact that the bonding companies will require $100,000 cash collateral because of the tenfold increase in their risk exposure. They mislead people into thinking this is just about coming up with a $5,000 annual bond premium.

This measure has failed twice before as stand-alone legislation in both chambers. The fact is that supporters of the bigger bond had to sneak this language into the massive highway bill as a footnote to the Reid amendment in order to get it through the Senate. This $100,000 bond measure is nothing more than an anti-competitive power play for the big brokers speciously being implemented under the guise of “fighting fraud.”  

Lastly, TIA has the nerve to collect $660 a year from small brokers, which they represent will be used to defend and promote their interests. In actuality, they spend that money on lobbyists to enact legislation that will eliminate small brokers. If Mr. Voltmann is looking for fraud, he might start by looking in the TIA Boardroom. 

James Lamb
President
Association of Independent Property Brokers and Agents
www.IndependentPropertyBrokers.org
Morristown, N.J.

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  • Stay Informed

    They should set the Broker limits by the percentage of monthly business. The more you’re brokering the more your Bond costs. This way a company might have a chance of recovering some money if the broker goes under. $25, 000 isn’t enough and people will still get screwed.

  • Phil Gates

    Both the House and the Senate need to debate this bill on it’s own. Not attached to anything else. The way the TIA was able to sneak this in to the Highway Bill is nothing but shit ass politics.

  • Steve Fiddler

    What your looking at the American dream of starting a company and you be the owner going away. All the TIA wants is small brokers going away and the big boys control the market. The oil industry is a perfect example of the big boys controlling the game and it has work great for our trucking industry. In a 10 year period fuel has gone from $1.50 gallon to $5.00 and right now at 3.65. Making a truckers cost for 250 mile fuel is at 38% of the cost. Competition is good. The bonds need to be adjusted according to inflation. Just dont knock the brokers out of the game.

  • Deborah McCoy

    The date is Saturday, 6/30/12 – our congress has approved the Transportation Bill which will increase our surety bond to $75,000. I don’t know how we’ll find the money to be able to continue doing business. I’m sure many of my fellow freight brokers are wondering the same thing. I’m very disappointed in our congress and in the TIA.

  • http://www.facebook.com/rod.lucas.71 Rod Lucas

    I think that these freight brokers are so great! They really do a good job for you and can get you good quality transportation of shipments.

  • Phillius Thomas

    Always ask an experienced freight broker agent first before this. They are very helpful in clarification.