"$100,000 Broker Bond Soon Required?"
Article published on Monday, June 27, 2011
The "Fighting Fraud in Transportation Act 2011," which specifically addresses the required broker bond limit, has been introduced by Congressmen Carnhan and Guinta last week in Congress. The "Fighting Fraud in Transportation Act 2011" has the support of TIA, OOIDA, and the ATA.
Although the main provision of this bill includes raising the required broker bond limit from $10,000 to $100,000, the bill contains other significant provisions that will impact the entire transportation industry. Other highlights of this Act include: 1) Requiring all licensed transportation companies (broker, forwarder, and carrier) to register their authority each year with DOT and authorizing the DOT to cancel authorities not re-registered, 2) Requiring the DOT to compile an accurate listing of all active authorities and mandating that transportation entities have unique authority numbers, 3) Requring freight forwarders to get a bond (currently they are not required by law to have a bond), 4) Establishing clarification on liability and "authority of record" for carriers involved with interline freight transactions, 5) Establishing performance standards for sureties and bonding companies, and 6) Establishing fines and penalties for unauthorized brokering of freight.
Should the bill become law, existing motor carriers, brokers and freight forwarders will have four years to come into compliance with the new regulation. New entrants will have to comply immediately. The status of this bill passing is uncertain. A similar bill introduced last year by Senators Snowe and Klobuchar died in the last Congressional Session.
