This is a good thing and a long time coming. More needs to be done.

would existing brokers need to come up 100k ?

What about all the carriers that illegally broker freight and screw us all over and don't pay their bills.  Is there anything for that?  Or how about these companies that close their doors and then just reopen as another company.  Anything for that?

This is not good at all. This is VERY BAD FOR THE CARRIER. The brokers will just pay less for the carriers to be able to cover the higher bond. The good small brokers will go out of business. It will only leave the big brokers that push down the rates on the owner operators.

This is another example of the government putting the nail in the coffins of small business in favor of big business.

Has anyone considered the small legitimate brokerages that are just scraping by? I know of MANY small brokers that try to do the right thing. They act as service oriented "freight management departments" for small companies that aren't large enough to afford their own "in house" freight management.

Unfortunately, this legislation applies the same clerical and financial burdens (bond, licensing and fees) to companies that broker 5 loads per week as it does for companies that broker 5000 loads per week and that is just wrong.

Mandatory annual licensing SHOULD be required. But don't put an extraordinary burden on small business through licensing fees, required bonds, and insurance requirements. Fees should be imposed on a sliding scale based on the brokerage companies gross income. This at least gives a small brokerage a fighting chance.

IN SHORT, This legislation solves nothing. I can think of 100 ways a con man can get around it. The frauds and scammers are STILL going use the loopholes. If you think it through anyone can see that the only ones that are going to get hurt are the small legitimate businesses, brokerages and truckers.

Just use "Due Diligence" with Carrier and Broker. What business guarantees payment?

These two Senators know nothing of the Trucking Industry. Time better spent on a bond from the Shipper to guarantee payment. Do business with only Licensed Brokers with good credit and are members of the T.I.A. and also check the Carrier. Just another plan for Big Government to stop entrepreneurial success.

EL, that's what the unlimited liability clause is in there for, and also why the higher bond to stop people from just "closing the doors." Here is an idea: READ what it's says before you post, or actually COMPREHEND what you are reading.

I also agree with Mark. The FMCSA is just using this as a way to generate income by charging the renewal fees, and the higher bond is more than most small companies could afford to have. It's not hard to credit check companies before you do buisness with them, and unfortunately you will still get stuck with some bad freight bills, but that is literally the price of doing buisness.

Increasing the bond requirement does nothing to keep the market place from filing chapter 11 (There is legislation already in place to protect "financial handlers" from being financially responsible to the debtor's obligation) you don't see brokers paying for failed mortgages, there need to be stiffer penalties across the board for the whole of the industry in general, reapplying for authority annually is not required by carriers at this time.  I would have to say,don't force anything on someone you're not willing to quoke down yourself.

Most likely what will happen is the few big broker houses that can afford the bond will control the freight even more than they do now and and the small and mid-size carriers will go under like they are now and newer naive carriers will keep popping up and the cycle keeps repeating.

They are going to put the good brokers out of business!  We're a small company who has been in the transportation for 41yrs., brokering for 8yrs.  Right now we're struggling to stay alive.  The little guys can't afford this!  We do everything by the rules and are fair to the customers and carriers and so where do we find the extra money to be able to up our bond????  As always the good people get screwed!

loss of numerous jobs. Load Boards?? You will get your loads from the brokers website who will dictate the rate. Make the shippers carry a bond. Numerous honest hard working brokers have gone under because of shipper not paying, they want to pay carriers but are unable because the shipper defaults

Make the shipper get the bond!

It sounds like legitimate brokers will have no problems here. It will be the smaller brokers posing as carriers that will be isolated. Mark, I don't know how in tune you are with the current market, but the carriers are driving the market now as they should be. The last 4 years have been a great market for shippers and brokers, but being a person that moved from a small broker posing as a carrier to a large legitimate broker, I will have to say, my "large" company is fair and operates with strict integrity versus the small poser broker that I worked for before. Capacity is low and freight is rebounding, make the best of it.

"Establishes an annual registration requirement to renew broker/forwarder operating authority and generate revenue for FMCSA enforcement. Requires FMCSA to revoke operating authority that is not renewed annually."

What is the purpose of this?!?! Create more paperwork and federal jobs? These people have NO clue.

Another thing tat needs regulated is the number of agents on each bond. Some of these Brokers have hundreds of agents Sounds silly but really you could use one broker authority and everyone in the whole country be agents with one bond.

As a small freight broker operating out of my home, this requirement of a larger bond would put me out of business. Just another way for the big companies to eliminate the little guys and create a monopolistic environment. How about promoting the interests of the small guy and stop caving into the big wheels and their greedy policies.

There has to be some sort of Grandfather clause. I have been in business since 2000 and have never had anyone file on my bond. I could see having $100,000 bond for the 1st 2 years in business, and then be able to drop that down after you have become a proven company. Bottom line is that people need to pay more attention on who they do business with.

It is funny that Olympia Snowe is down for regulating an Industry that hasn't been regulated since the Carter Administration. She must have some family or friends in the trucking Industry.

The part I agree with is the $100,000 bond.  The worst thing that happens is all the fly by night brokers give everyone a bad rap.  Make it harder for crooks to cheat truckers out of hard earned money.  Make the surety bond mean something.  Yes this is coming from a small brokerage operation.

BS!!!!!!!!!!

Having had my brokerage authrity since Jan. 1991,  having maintained my bonding requirements (which used to be a challenge because the banks didn't understand it) and NEVER having had a claim on my bond I think the bonding increase is onorous to the small company.  As many of you have stated due dilligence is the best insurance.  You can't legislate business morality.  

We have been in the Brokerage business for over 25 years. The intent of the bill to clean up the freight brokerage business is honorable. Some parts of the bill (increased enforcement, penalties and oversight) are good and well intentioned. However I don’t feel that a $100,000 surety bond is the correct one.  I think there will be too much collateral damage and too much cost. Also how about the TIA promoting this!

get copy of bill here, read it for yourself:

http://thomas.gov/cgi-bin/query/z?c111:S.3483:

I have been a broker for over 30 years.....I am sick and tired of Uncle Sam putting another regulation on a small operation that can't afford it...Check out the references of the people you do business with.... Who do you really think this will benefit...When is the last time the *** **** government put in a regulation in our industry that really helped...the more they stick their nose in our business the more it will cost EVERYONE in the long run...Don't be lazy and expect everything will turn out good...there are plenty of good brokers out there...as there are bad...DUE DILIGENCE

I am a small reputable broker, the extra bonding could put me over the edge. I agree make the shippers post the bond. After having a very large shipper file bankruptcy. I was forced out of business and some carriers lost some of their money. Meanwhile the shipper stayed in business and when all was said and done, they determined that I was an insecure debt and I received nothing. The shipper owed us $90,000.00. I had to lay off 3 full time employees, where is the protection in that?

If I am to take $90,000.00 out of cash flow to increase my bond the carriers that are supposed to be protected by this bill will only see slower pay from the small brokers who pay fair rates.

Get the regulators out of my business.

I have been in business since 1990 and pay my bills in 14 to 21 days or less and have a great reputation for paying trucks a decent rate. I have shippers that take sometimes 45 or more days to pay, and have been stiffed by a few shippers who close up and re-open under a new name. I've won a judgment against a shipper in court and they closed up and stuck me and a lot of other brokers/truckers and yet they go on as business as usual under a new name. Who is regulating them? The truckers need to check credit better who they are doing business with like the factoring companies do. Here we go with Federal government being intrusive in the free enterprise system. I know of some bigger broker firms and "3pls" that pay crappy rates and take over 45-60 days to pay. I have a cash bond that has never been filed on in 18 years. This will put many a legitimate independent small broker out of business or make them sign on with larger firms.Hmmm...pay part of my hard earned profits to somebody who does nothing for me but collect a percentage for using their name. If I wanted to work for some jerk I would have been the last 20 years. If this comes to fruition I know the larger broker outfits will cut the rates to worse than they offer now. Good luck to this BS. Be careful what you wish for, those of you who see this as a good thing.

There are bad guys out there!

BUT THIS LEGISLATION IS THE EQUIVALENT OF NUKING THE FOREST TO GET RID OF A COUPLE OF WOLVES.

What is the government and TIA thinking?

BTW I agree with ROGER, RUSS, DAN, LORI, DON, DAVE and JL.

And I hope you are reading this BLOG Olympia Snowe.

The $100,000 surety bond is being pushed by the TIA that is now being led by the big brokers.  That's why I don't belong to the TIA anymore.  The big boys' profit margins are deteriorating and the TIA lobby in Washington is trying to help them "fix it".  The 2PL (broker and shipper) big broker philosophy eliminated alot of owner operators and small carriers over the last few years. I have a small trucking company and am amazed at the puppets I have to talk to with the "billion dollar" companies spouting rates under cost.  I hope the carrier growth is slow and the rates return to profitable levels for all.  That will only happen with small brokers and small carriers working with responsible shippers.  Wow..a 3PL.

Be sure to leave your comments on http://snowe.senate.gov/public/index.cfm?FuseAction=PressRoom.PressReleases&ContentRecord_id=3bf9e573-802a-23ad-43f2-737f42a55acc the website of the sponsor of this over reaching, not well thought out, new proposed regulation.  It is a small business killer, and will create less competition as only the largest brokers will be able to dictate to the carriers.

The upcoming legislation Motor Carrier Protection Act of 2010 is unfair to small business owners. I own my own Freight Brokerage Company and the new legislation that would increase the bond to $100,000 would put many other small freight brokerage companies out of business. This legislation is not being fair to small business owners and if passed would only make the big brokerage companies bigger and increase the cost of transportation because it would reduce competition. How would a $100,000 bond clean up the brokerage business are not the biggest criminals in this country "BIG BUSINESS", BP, Enron, Wall Street. The only thing that the $100,000 bond would do would be to put honest hard working small business owners out of business. The big would just get bigger.

Thanks DM, just left my comment on the Senator's web site. I think we should all do the same.

I believe that this legislation is not the answer.  There are many deceptive shippers, carriers, and brokers so if they want to legislate they need to look at the whole picture not just the brokers.  As many of you have said this will put many of the small and honest brokers out of business.  

The $10,000 bond is a joke and has been since day one.  That's about 7 loads.   The fly by by night brokers that go out of business nick carriers for 20 times that if not 50 times that.

Unfortunately we used to get $10,000 bonds by a signature guarantee.  Now bonding companies will likely demand $100,000 in collateral for a $100K bond.

What a mess.   The thought actually popped into my head that maybe the gov't can step in and guarantee these bonds for small businesses that are obviously healthy financially but still can not afford to take $100K out of cash flow.   Then the idea popped into my head a guarantee from an entity with the highest debt to income ratio in the history of civilization isn't worth much.

Did it for 30 years, looks like I got out at the right time.

The $10,000. bond goes back many many years. The reality in today's market is that it isn't enough to satisfy a week's worth of work in a very small brokerage doing $500,000. a year. This is long overdue. Many players have entered the market place undercapitalized and unable to pay until they are paid. We have seen banks crumble, mortgages foreclosed, and businesses shut down. This will protect carriers of all sizes by guaranteeing payment from credible companies who are willing to put their money where their mouth is. The annual registration will allow FMCSA to account for all players. Currently there are 57,000 licenses issued and no one knows how many are actually in business. This will give the industry added credibility. The fees are intended to enable FMCSA to enforce rules that have been ignored for years.

By Law, the carrier always has the option of going after the shipper for payment if not paid by the broker. The problem is that the SHIPPER is going out of business.

If you want to protect the carrier a more effective approach may be a law that states that:

A percentage of transportation cost MUST be paid upon pick up of the freight. Shipper, Broker, and Forwarder alike.

Sorry to disagree with JD but, You can't fix this problem by saying that only big business with deep pockets should be allowed to do business. But if you want to apply a 100,000 bond standard, EVERY SHIPPER as well should be required to post a bond to ensure that the carrier gets paid.

How many other businesses do you know of that have to post a bond just in case they cant pay their vendors? Hmmm, thats right, none.

And as far as the bond going up by 10 times the amount: Fuel prices have been fairly low for a very long time as well what do you think of $20.00 / Gallon fuel?

Once again this legislation is NOT going to help the small carrier but only push the small legitimate broker out of business.

It is unrealistic to think that the current climate in DC will reduce regulatory requirements especially with advocacy groups pounding legislators for more HOS restrictions, laws against distractive driving, and other laws aimed at safe driving.  Let’s face it, more rules and regulations are coming.   You either are well capitalized or not in business.

I have been in the business for over 25 years and am considered a small broker (about 10M in revenue).  I have a $100,000 bond in place now (AMTEX) and market it to my carriers.  AMTEX (through TIA) offers a $100,000 bond that cost as little as $2000 a year if the broker has good credit and non-following form contingent insurance.  

I disagree that TIA has sold out to the big brokers.  OOIDA had advocated a piece of legislation (TRUCC Act) in 2008 that would have completely regulated our industry which included brokers having to show their margins to the carrier.  TIA fought hard against it and because of their efforts the bill has been on the back burner still stuck in the House.  

The Snowe bill is the compromise that TIA and OOIDA came up with.  Yes, unfortunately it has the increase to $100,000 (OOIDA was pushing for $500,000) but it has many other parts to it that will help our industry.

TIA has always represented the whole industry including the little guys, and I applaud their efforts here.  I will continue to support the TIA PAC and would urge my fellow “small brokers” including BS to do the same.  It’s only going to get tougher in DC and you’re either in the fight to win or on the sidelines losing.  

The legislation is not about regulating anyone; it is about fighting fraud in trucking.  The legislation is also not about big companies v. small companies.  The bond increase was coming no matter what. Look what new regulations Washington is imposing on every other industry... The Chairman of the House Committee w/ oversight of the industry told TIA, "either you do something or I will."  Neither TIA nor OOIDA could get everything they wanted or didn't want.

The bond is affordable, TIA members can get it today for as little as $2K -- right now.

The registration requirement already exists. Every broker, forwarder, and motor carrier is supposed to register through the Uniform Carrier Registration System every year. Unfortunately, DOT doesn't connect the dots, so no one really knows who is in business. And, only some companies are registering.

DOT would be required to track a qualified individual with each authority. This plus the requirement that carriers would need a broker/forwarder license and bond to broker freight; should get to the un-authorized re-brokering problem.  Anyone caught brokering w/o a license and bond would face unlimited liability for payments -- that should interest some trial lawyers to go after the creeps that rip you off.  

In every transaction, each company would have to give an authority number and that number would govern the transaction.

The legislation would bring an end to un-funded broker trusts that don't pay legitimate claims. Broker trust companies would be responsible for $100K if a broker failed, and the trust company would not be able to deduct their own costs like some do now. Claims would be paid pro-rata. This requirement will cut down on under funded companies that enter the market ill prepared for the rigors of the modern industry.

There is a long way to go before this legislation becomes law. You have time to prepare, and time to speak out. TIA cares what you have to say, we have always been your industry association and your voice in Washington.

The $10k bond was established 30 years ago and $10k then is not worth $10k now. I am a long time TIA member and one of the smallest. The deal TIA struck is a compromise but far better than a $500k bond or escrow that some trucking organizations have long sought. It also diffuses the fuel surcharge and margin disclosure provisions OOIDA sought in the TRUC Act. Lastly, the new bill includes  provisions to reduce fraud in the market that plagues us all. At long last, we have legislation aimed at this nagging problem.

The $100k bond will not put a broker of any size out of business if they are in good financial condition. At a cost of roughly $2k/yr. the annual expense for the TIA $100k bond is reasonable. International ocean intermediaries have been required to post a $75k bond for years and that market is full of small players just like our domestic brokerage market. The bond has had no impact on new entrants to that market. I doubt it will in ours either.

   For those claiming TIA only looks out for the big brokers, get real. No other association or group of any kind is watching out for small brokers like TIA does. Stay engaged and informed and you can't  help but reach the same conclusion.

I think eliminating the bond altogether is a great idea but it's DOA in Washington. OOIDA and other trucking organizations spend tons of money and time lobbying congress. When is the last time you sent a PAC contribution to TIA?  

EVERYONE, Lets do the math, If a "small" broker is doing $10m per year with 30 days terms that would mean they would have about an $850,000 float. That $100,000 bond would mean the carrier would get about 11  cents on the dollar. that DOESN'T sound like problem solved to me.

Capitalized companies? Here is the short list of Chapter 11 companies... See if you recognize any of the names... I wonder how many vendors (carriers included) got the short end from these "capitalized" companies.

Linens and Things

Kmart

Lord and Taylor

Owens Corning

Franks Nursury and Craft

Federal-Mogul

Delta (chapter 11)

General Motors

Enron

Lehman Brothers

Chrysler

Frontier Airlines

Mesa Airlines

This IS about putting the SMALL BROKER OUT OF BUSINESS

Any regulation that makes it difficult or next to impossible for a "small" company to start up or compete is just wrong. LETS FIND A SOLUTION THAT SOLVES THE PROBLEM!

I don't want to appear as an individual who just gripes about a problem without offering solutions. To be clear I am not against eliminating fraud in the industry.

My gripe (and I am sure many others here) is that the same standard is being held for the company that grosses $400 thousand per year as those that gross $400 million.

It is the unfortunate fact that small "legitimate" and start-up companies are the ones that can least afford this bond and whatever other fees are associated with this legislation. But as you have read in my earlier post, larger businesses fail also, leaving much bigger problems in their wake.

This isn't rocket science. With all of the industry experience with those involved in the negotiations, hasn't someone considered bond amount based on gross revenue (expected float). This "exposure" is exactly how the insurance industry operates and for a reason.

Class I broker - $0 - $400,000 - Bond amount $20,000 (about one month's float)

Class II broker $400,000 - $800,000 Bond amount 50,000 (about one month's float)

Class III broker - $800,000 - $1,600,000 Bond amount  100,000 (about one month's float)

Class IV broker $1,600,000 - $10,000,000 Bond Amount $200,000 (about 2 weeks' float)

Class V broker $10,000,000 - $25,000,000 Bond Amount $300,000 (about 1 week's float)

etc...

This isn't an overly complicated concept and makes a million times more sense.

If you want to legislate a standard, do it fairly. It is the lack of proposals like this that leads people to believe that this legislation is an effort to wipe small brokers off the map.

If anyone from "TIA" is listening, it's very nice that you are offering to market your TIA sponsored bond, but how about working on what's fair and reasonable for the smaller transportation intermediaries.

Thank You

I have read and re read the blogs posted on this proposed legislation thus far.

For those convinced that this is selling out small brokers...Please know the facts!

THIS ABSOLUTELY IS NOT ABOUT PUTTING THE SMALL BROKER OUT OF BUSINESS

If your company has good credit you can raise your bond right now for as little as $2,000. TIA's Performance Certified program already has nearly 60 brokers with bonds of $100,000. or more  This is a fully funded bond that was created as an alternative to the un-funded bonds that many of you may not even know you have today. This adds credibility to our industry and YOU need to know what YOU have.

If you're getting your bond for nothing, doesn't it stand to reason it is probably worth nothing?

OOIDA and others have lobbied hard to impose harsh rules and regulations against our industry. The TRUCC Act? A $500,000. bond? TIA fought those fights and is still the only association that has brokers' backs, no matter how small. Many of the trucking associations have ten times the lobbying power of TIA. Yet they have created win after win for the broker industry.

I applaud TIA , and echo RS  When was the last time you supported the TIA PAC?    

Sounds like you know a little too much about these bonds.

The TIA has posted a statement and links to more information about this legislation, in the "Spotlight" section of the TIA home page: www.tianet.org.

What they need to look at is the monitoring of Brokers that start getting hinky. Having a $100,000 bond will make it more enticing for the crooks to get a really good chunk of money before getting shut down.   With $10,000 they usually didn't have a chance to get as much as they liked before going under.  The crooks will always prosper and the little guys that are honest will go under.

I am broker that does nothing but COD loads.  I make sure the carrier gets  his money up front and have never had anyone question my integrity when it comes to business.   None of that matters if I can't afford a higher bond.  I am just small potatoes compare to most brokers.  The part about making us "register" every year???????????    Figure it out.  IF brokers have to pay that $300 a year on top of the bond, does this mean carriers do, too?   At $300 each from all us, that should make a big dent in the deficit!

As a transportation attorney, I looked at the small print at the end of the proposed legislation. It has a very significant stick by adding Section 14916(b) "Civil Penalties and Private Cause of Action". For those leaving comments about their frustration with brokers who stiff the motor carriers or shippers by collecting transport charges then going out of business and reopening under a different name, there is significant relief.  A broker who violates the proposed registration and bonding rules will be liable for government penalties and civil law suits. Most significantly, the individual officers, directors, and principals of such brokerage operation will be PERSONALLY liable. Section 14916(b).  A court could determine that the owner of a defunct broker operation still is personally liable for any unpaid shipping charges.

The new Association of Independent Property Brokers & Agents ("AIPBA") opposes this bill. Read AIPBA President James Lamb's article on why a $100,000 property broker bond will actually hurt the Industry. Download the article at: http://dotauthority.vpweb.com/upload/treadlightlybrokerbond.pdf The AIPBA is offering a free webinar for the public on the proposed legislation on July 15th. Register at: https://www2.gotomeeting.com/register/313130370.

To listen to the AIPBA's $100,000 Broker Bond Webinar recorded on July 15th, visit:

http://www.IndependentPropertyBrokers.org