Property brokers and freight forwarders will have 60 days from Oct. 1 to comply with a controversial new $75,000 surety bond requirement, the Federal Motor Carrier Safety Administration said in a Federal Register notice today.
Last year’s transportation spending law set an Oct. 1 deadline for brokers and forwarders to obtain a $75,000 surety bond or trust fund agreement and for motor carriers that occasionally broker loads to register as brokers with the FMCSA.
The phased-in enforcement period gives brokers, forwarders and trucking companies that broker loads until Dec. 1 to register and file proof of their $75,000 bonds or trust fund agreements with the federal trucking safety agency.
The transportation spending law, known as MAP-21, raised the financial responsibility requirement for brokers from $10,000 to $75,000, infuriating small brokerage operators that claim the requirement will force them out of business.
The FMCSA will not accept group surety bonds — one option some smaller companies said might help them meet the higher bonding requirement. The agency said it is considering the “enforcement implications of group sureties.”
In July, the Association of Independent Property Brokers and Agents filed a lawsuit challenging the $75,000 bond requirement in the U.S. District Court in Florida. The group claims the requirement is at odds with transportation policy and law.
The requirement is backed by the Transportation Intermediaries Association and Owner-Operator Independent Drivers Association, which for years battled over the appropriate bonding level for truck freight brokers.
TIA claims the higher financial responsibility requirement and attempts to end "double-brokering" by requiring motor carriers to register their brokerage operations will reduce transportation fraud.
Companies that waited for FMCSA guidance to secure a higher bond or trust fund agreement have less than three months to do so. The agency will send out warning notices Nov. 1 to brokers and forwarders that haven’t registered or re-registered.
Motor carriers that “occasionally” broker loads also must register as brokers, though the FMCSA admitted enforcing that requirement won’t be easy. The agency said it will monitor consumer complaints and develop an enforcement program.
“FMCSA will work with industry groups to use this complaint information and other data to ascertain the extent of the unlicensed broker population subset within the motor carrier industry,” the agency said in its Federal Register notice.
“FMCSA strongly encourages all motor carriers not to accept loads from unregistered brokers or freight forwarders, as these entities might not have the financial security mandated by MAP–21,” the agency said.