Brokers Shutting Down Due to Bond Increase
by Apex Capital | December 19, 2013
Recently we wrote about the changes in MAP-21 highway funding act that increased the required broker’s bond from $10,000 to $75,000. All freight brokers who did not comply December 1 would have their bond revoked.
According to the Association of Independent Property Brokers and Agents (AIPBA), a trade group representing brokers, 38% of freight brokers have had their bonds revoked.
Norita Taylor, spokesperson for the Owner-Operator Independent Drivers Association (OOIDA), countered that the revocations are not entirely due to the bond increase, and could include brokers who had their licenses revoked for other reasons. Transportation Intermediaries Association member, Chris Burroughs, also countered that the number of registered brokers is dropping because the Federal Motor Carrier Safety Administration (FMCSA) database was out of date.
But some industry professionals disagree and feel that the bond increase is pushing out smaller brokers. AIPBA is taking action and fighting the increase. AIPBA filed an appeal with the FMCSA rule on Dec. 3, arguing the Agency violated the Administrative Procedure Act.
OOIDA supported the increase, saying it better protects owner-operators who otherwise may not be paid by over-extended brokers. In addition, the American Trucking Associations (ATA) and the Transportation Intermediaries Association (TIA) supported the increase.
What do you think of the broker bond increase? Are you a broker who’s been affected? Let us know your thoughts. Sound off on our Apex Capital Facebook and Twitter account. We want to hear from you!