FMCSA rejects exemptions from 'anticompetitive' broker bond requirement

AIPBA contends $75k mandate shuttered 10,000 small businesses

The Federal Motor Carrier Safety Administration has denied a freight broker group an exemption for all brokers and freight forwarders from the $75,000 bond provision included in MAP-21.

The application, from the Assn. of Independent Property Brokers and Agents (AIPBA), was denied on the basis that U.S. code does not give FMCSA the authority “to essentially nullify” a statutory provision by exempting the entire class of persons subject to the provision, according to a March 31 notice in the Federal Register.

And, the notice states, even if the agency had the authority to issue such a blanket exemption, AIPBA's application does not meet the factors provided in the federal law because:

  1. the new $75,000 bond requirement is necessary to carry out the Title 49 National Transportation Policy
  2. there has been no showing that the $75,000 requirement “is not needed to protect shippers from the abuse of market power” and
  3. the requested exemption is not in the public interest.

In a statement, AIPBA said it is “disappointed” in the FMCSA ruling and finds the decision “totally devoid of sensitivity.”

“We believe we made a good case for why the exemption should have been granted by FMCSA and that our arguments on how the three statutory criteria were, in fact, met,” the group said.

AIPBA contends that the brokerage authority of nearly 10,000 small business intermediaries—and especially members of the minority brokerage community—was revoked in the first two weeks of December 2013.

AIPBA cited “the anticompetitive obstacles to entry currently in place due to a bond obviously set too high for over 40% of the brokerage industry to handle.”

“Furthermore, we believe that the small business segment of the trucking industry should take notice that FMCSA is next on track to adversely affect small business truckers with respect to a significant insurance increase in order to appease big trucking, personal injury attorneys, and safety advocates,” the AIPBA statement reads.

The complete statement is here.

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