It has been a little over a year since MAP-21 increased the required Freight Broker bond from a $10,000 to a $75,000 BMC 84/85 broker bond/Trust. Although, when it first was implemented, there were many naysayers, it seems the change seems to have helped the industry.
One of the intended effects of MAP-21 was to push out those brokers who may have been engaging in fraudulent behavior and help to protect truckers, in particular, from falling victim to unethical business practices. Both the Owner-Operator Independent Drivers Association (OOIDA) and the Transportation Intermediaries Association (TIA) have been pushing for the bond to be raised for years. Although many expected this to cause a decrease in freight brokers, over the course of 2014 only one week saw a decrease in active licensed brokers compared with a significant drop off in the 4th quarter of 2013.
More Permissive Freight Bond Market
One year after the adoption of MAP-21, the bond market has become much more permissive. Through working with a variety of surety companies such as International Bond and Marine, a freight broker bond can be issued without requiring collateral or information about net worth, financial statements and business financials.
Overall, this increase has helped protect truckers and brokerage firms alike. Many options are now available to help smaller firms obtain a brokerage bond and re-join the industry. In addition, this legislation should serve to placate organizations that successfully built a case around the notion that Freight Brokers were not paying for the services that put bread on their table & can help put our leadership focus back on other major issues in this industry.