Freight Brokers Would Accept Higher Bond

The head of the Transportation Intermediaries Association says the group could accept a 10-fold increase in bonds required for licensed freight brokers in exchange for stronger regulation of the licensing system.

The agreement, aimed at breaking an impasse with trucking groups that are asking Congress to impose tougher financial rules on freight brokers, would raise the bond required of brokers from the current $10,000 to $100,000.

“We’d be willing to accept an increase in the bond as long as it came with changes in the way bonding companies are now regulated,” said Robert Voltmann, president and CEO of the TIA.

That would include tighter rules on how bonds, posted by carriers and used to pay out legal claims, are collected and claims paid out.

It would also stave off attempts by some trucking groups such as the Owner-Operator Independent Drivers Association to require freight brokers to open their financial records to scrutiny so that companies using the brokers could determine the financial health of the broker.

The OOIDA has said it wants the requirement because many independent truckers have been stung by the fraud or failure of brokers that collect payments from shippers and then go out of business, leaving big debts behind.

Voltmann says he has taken his plan to Rep. Peter DeFazio, D-Ore., chairman of the House Highways and Transit Subcommittee, along with a request that the bonding process be more tightly regulated, from the way funds are posted through bonding companies to the way payments are made.

He also wants the regulations to clarify that motor carriers cannot broker freight to other carriers without themselves posting the $100,000 bond.