Channel 19

Todd Dills

Small brokers reload on $75K bond

| August 23, 2012

The Association of Independent Property Brokers and Agents, founded by former DOT officer James Lamb and which I’ve written about in the context of the issue the organization was founded to fight — the boost from $10,000 to $75,000 in minimum surety bond requirements for brokers that was in the highway bill package passed in June — is calling that measure “inconsistent with the Federal Transportation Policy set forth in 49 USC § 13101” of the U.S. Code, which assures the federal government doesn’t get involved statutorily in promoting one mode of transportation over the other and ensures equal opportunity to operators in transportation.

I know we’ve been through this debate before, and Congress ultimately felt they had authority to include the bond in the highway bill, but I’m interested in hearing from those among who broker some loads throughout the year as part of your trucking business. Have you looked into what would you’d need to go through to obtain a $75,000 surety? Will it be feasible for you to do so? Following find code language AIBPA included in a press release delivered this week to media:

…it is the policy of the United States Government to oversee the modes of transportation and — (1) in overseeing those modes — (A) to recognize and preserve the inherent advantage of each mode of transportation; (B) to promote safe, adequate, economical, and efficient transportation; (C) to encourage sound economic conditions in transportation, including sound economic conditions among carriers; (D) to encourage the establishment and maintenance of reasonable rates for transportation, without unreasonable discrimination or unfair or destructive competitive practices; (E) to cooperate with each State and the officials of each State on transportation matters; and (F) to encourage fair wages and working conditions in the transportation industry; and (2) in overseeing transportation by motor carrier, to promote competitive and efficient transportation services in order to—(A) encourage fair competition, and reasonable rates for transportation by motor carriers of property; (B) promote efficiency in the motor carrier transportation system and to require fair and expeditious decisions when required; (C) meet the needs of shippers, receivers, passengers, and consumers; (D) allow a variety of quality and price options to meet changing market demands and the diverse requirements of the shipping and traveling public; (E) allow the most productive use of equipment and energy resources; (F) enable efficient and well-managed carriers to earn adequate profits, attract capital, and maintain fair wages and working conditions; (G) provide and maintain service to small communities and small shippers and intrastate bus services; (H) provide and maintain commuter bus operations; (I) improve and maintain a sound, safe, and competitive privately owned motor carrier system; (J) promote greater participation by minorities in the motor carrier system; (K) promote intermodal transportation.

According to the AIBPA President Lamb, the bond “does virtually everything the law promises Americans their government will not do,” adding: “This is what happens when politicians in Congress allow high paid lobbyists to slip an anti-competitive provision into major highway legislation as an amendment at the 11th hour without debating the impact such changes will have on the industry and consumers. We believe this legislation, drafted by the Transportation Intermediaries Association (TIA), was specifically written with the intent to eliminate small brokers from the market so that big brokers can take control of the market, form oligopolies, charge shippers and consumers more, and pay owner-operators less.”

Tell me what you think here in the comments or get in touch direct via Twitter.

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