In The News

Oct. 1st $75K Freight Broker Bond Increase Still Stands

The Federal Motor Carrier Safety Administration (FMCSA) recently confirmed the $75,000 bond requirement for freight brokers and forwarders remains slated for October 1, 2013. 

Controversy surrounding provisions of the new highway law, Moving Ahead for Progress in the 21st Century (MAP-21) that increases the financial security required has resulted in confusion and delays in bonding for many brokers.  Some brokers unfortunately are unaware the new regulation even exists.   

Like any matter where prior planning is involved, to treat this increase like it’s not going to happen could leave you high and dry come deadline time.  There are over 20,000 freight brokers alone – add to that freight forwarders who need to be bonded and there will surely be a crunch on October 1.  And without the appropriate financial security in place, you are putting your authority, and your business, at risk.

Freight Broker Financial Security Requirement

Currently, freight brokers must maintain a $10,000 surety bond or trust fund agreement, proof of which must be filed with the FMCSA on Forms BMC-84 and BMC-85 respectively.  Under federal regulations passed last year, freight forwarders must also obtain the bond or trust and the required financial security has been increased to $75,000.

Implementation of the Increase

Bonding companies will issue notices of cancellation with termination dates of October 31.  If a broker is able to remain with their current surety and purchases the $75,000 bond, there will be likely no lapse in coverage as long as they act upon receiving this notice.
 
Initially, hopes were that a rider could be used to increase the bond to $75,000.  However, the FMCSA has clearly indicated Form BMC-84 will be replaced to include the new financial security requirement as well as language to include freight forwarders.  The agency plans to have this form available on the FMCSA website by October 1.

There are also plans in place to post a Federal Register notice that will provide further details concerning the bond requirement, which will include a “Frequently Asked Questions” section.  The date of this notice has not been announced.

What if You Are Not Bonded on Time?

Those who do not file proof of the $75,000 bond or trust will be receiving letters from the FMCSA defining a period to get the required security in place.  At this point, it will be crucial to get your bond or trust immediately.  Why not examine the options available now for confidence there will be no lapse in your ability to perform as a broker or forwarder?

As is often the case, solutions arise where a need exists.  JW Surety Bonds has announced a competitive $75,000 freight broker bond program with a 99% approval rate.  Apply directly on the agency’s website to get an instant online approval.

Lowest rates No collateral Bad credit? No problem No business financials required No experience required Instant online approvals






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