Help Defeat $100K Bond
"The argument in favor of a $100,000 bond is specious. It’s not about fraud. It’s about creating an oligopoly for big brokerages under the guise of fighting fraud. The true way to fight fraud is by cracking down on the illegal brokers and revoking the licenses of unscrupulous, licensed brokers.
TIA knows this (click here). It is bad public policy to punish all brokers because of the bad apples. The answer lies in assessing ongoing FITNESS through COMPLIANCE AUDIT & ENFORCEMENT. Simply stated, freight brokers who do not pay their carriers should be shut down."
--JAMES LAMB
AIPBA President
STB/FMC Practitioner
Former DOT Investigator
It's been dubbed the Motor Carrier Protection Act of 2010, the Fighting Fraud in Transportation Act and now it's just a line item in the Surface Transportation bill. The AIPBA believes no matter what euphemistic, Orwellian doublespeak words they use, the $100,000 property broker bond will put legitimate property brokers out of business... which, in turn, will reduce competition. Owner-operators will then have less opportunities to find loads and less negotiating power with the few remaining big brokerages offering loads.
While the AIPBA understands the need for the bond to go up to adjust for inflation, the AIPBA believes any and all proposals for $100,000 to $500,000 property broker bond amounts would have a devastating impact on the Industry. Instead, the AIPBA recommends either a reasonable, standard $25,000 bond to help protect Carriers and Independent Owner-Operators based on recent FMCSA rule-making for household goods brokers or the alternate plan below scaled to brokers' annual revenues...
ALTERNATE SOLUTION:
The bigger the broker, the bigger the bond...
Small Brokers:
Category Annual Revenue
Category A Property Broker $0 - $500,000
Suggested Bond Amount $10,000
Category B Property Broker $500,001 - $1,000,000
Suggested Bond Amount $25,000
Category C Property Broker $1,000,001 - $2,000,000
Suggested Bond Amount $50,000
Category D Property Broker $2,000,001 - $7,000,000
Suggested Bond Amount $75,000
Large Brokers:
Category Annual Revenue
Category E Property Broker $7,000,001 - $25,000,000
Suggested Bond Amount $100,000
Category F Property Broker Over $25,000,000
Suggested Bond Amount $250,000
Red indicates small brokerages based on the Small Business Administration’s 2008 Industry threshold for NAICS Code 488510 for “Freight Transportation Arrangement.”
To learn more:
in rebuttal to TIA's webinar.
MEMBERS: TAKE ACTION!
*Congressional staffers are watching the Internet.
Your Name
Your Address
Date:
The Honorable (Insert Senator's Full Name)
(Insert Senator's Address)
Dear Senator (Insert Senator's Last Name)
I am a licensed property broker under MC Number: (insert MC number).
As you know, property brokers must currently post a $10,000 surety bond before the Federal Motor Carrier Safety Administration will issue their license. I am writing to voice my opposition to H.R. 7 and S. 1813, which would increase the property broker bond to $100,000 and apply it to freight forwarders as well.
If the bond is drastically increased as proposed, then hundreds of small business owners like me will be adversely affected. Small property brokers will not be able to afford the premium and/or new cash collateral requirements. We expect many bond issuers will actually cease offering bonds because they could be on the hook for $100,000 without cash collateral on file.
A large bond would eliminate competition and would only serve the interests of the large brokerage companies. Without small brokers like me serving the Industry, independent truckers would be at the mercy of a small, powerful group of large property brokers to secure loads on the backhaul.
Our Association of Independent Property Brokers & Agents ("AIPBA") recommends a $25,000 bond as an alternative, which would properly adjust the 1979 $10,000 broker bond to inflation and fairly balance the interests of both carriers and brokers.
In any event, when considering the Highway Bill, please help us keep the bond reasonable and affordable for small business owners like me and help protect independent truckers against an oligopoly by the big brokerages.
Thank you.
Sincerely,
(Sign Your Name)
(Print Your Name)
Copyright 2010-2012 by the Association of Independent Property Brokers & Agents
