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The 75K Broker Bond – Is it about preventing fraud or something else?

Jan
30,
2014
1
AIPBA PRESIDENT JAMES LAMB

AIPBA PRESIDENT JAMES LAMB

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.

 

FMCSAYou can read more, including comments, on the FMCSA website via:


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?

We invite all to join us in this discussion on Thursday 1/30/14 on Truth About Trucking “Live” at 7PM ET.

Mr James Lamb of the AIPBA and DOTAuthority.com will be our guest and the phone lines will be open for all discussion and debate regarding the possible repercussions of the 75K Broker Bond .

The call in number to either listen or join in the discussion is 347-826-9170:
http://www.blogtalkradio.com/truthabouttrucking/2014/01/31/repealing-the-75k-broker-bond

Listen to the show from here also:

The chat room will also be open for online discussion, Link posting is allowed in the chat  room.
We suggest that you open a Blog Talk Radio account to join in the discussion (matter of login and password), otherwise you will be in a guest mode of READ ONLY.

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By: Allen Smith

Allen Smith is a 37 year veteran who started at an early age in a household goods family moving business. He began driving straight trucks in 1977 and moved to the big rigs in 1982. His experience within the industry includes; owner operator, company driver, operations manager, and owner of a long distance HHG moving business, taking many of the long haul moves himself when needed. Allen Smith, a truck driver advocate who is driven by the desire to help others succeed within an industry where injustice, unrewarded sacrifice, and lack of respect and recognition exists. Allen and his wife Donna are hosts of Truth About Trucking ”Live” on Blog Talk Radio. Other websites include AskTheTrucker, TruckingSocialMedia, NorthAmericanTruckingALerts, TruthAboutTrucking, and many Social Media websites. In 2011 Allen and Donna hosted the first Truck Driver Social Media Convention, designed to create unity and solutions for the trucking industry. This is now being extended through the North American Trucking Alerts network as those within the industry join forces for the betterment of the industry. Allen strongly supports other industry advocates who are also stepping up to the plate to help those who share honesty, guidance and direction. He believes that all those involved in trucking need to be accountable for their part within the industry, including drivers, carriers, brokers, shippers, receivers, etc… The list of supporters and likeminded people grow daily, networking together and sharing thoughts and ideas for the betterment of trucking. He has coined the popular phrase "Raising the standards of the trucking industry"

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One Response to The 75K Broker Bond – Is it about preventing fraud or something else?. - Post a Comment

  1. Chris

    Great article, and there are flaws — but those smaller brokerages that are being driven away by the 75k broker bonds are exactly the ones who are stealing from the truckers, and are also the ones making huge margins on the loads where they actually DO pay the carriers — these ‘mega brokers’ you refer to are the ones with reasonable margins and a large enough network of shippers to actually be valuable to the truckers, IMO.

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