The $75,000.00 Broker Bond (Trust) was inserted in the Highway Bill, Map21, in the 11th hour right before signing into law. Who was responsible for this? Was it to prevent Broker fraud or was there another motive?
James Lamb, President of the Association of Independent Property Brokers and Agents, filed with the FMCSA for an application for exemption for all property brokers from the broker bond or trust requirement.
Registration and Financial Security Requirements for Brokers of Property and Freight Forwarders; Association of Independent Property Brokers and Agents’ Exemption Application.
We are all aware of the fact that many have been burned in the trucking industry due to Broker fraud. Simply put, the broker arranges the load between the shipper and the driver/carrier and then does not pay the carrier. ( The shipper is not responsible for non payment).
There are many questions we need to ask ourselves about Freight Brokers, but most specifically, their purpose and the required 75K dollar bond stated by law.
What is the purpose of the Freight Broker Bond and who does it protect, if anyone?
The question to me is, as I’m sure it is to many, is was the 75K bond law in Map21 designed to prevent broker fraud or used to fight competition resulting in: a Mega Broker monopoly, reduction in the supply of small brokers, creating more middle men, lowering rates to truckers and possible predatory pricing?
If increasing the Bond is NOT the answer to preventing fraud, then what is?
Criminal charges and jail time? Something else?
What is the real purpose of a Broker? Many owner operators say they deal directly with the shipper and they do not need a broker. Do we?
Have all Freight Brokers been stereotyped as “bad apples” just as truckers have also been negatively stereotyped in the eyes of the public?
Finally, would the application for exemption have the effect of permitting all brokers to operate without a broker bond or trust of any amount, including the previous $10,000 bond or trust statute?
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