Brokers set for regulatory hit

School has started, October is right around the corner, leaves will be changing colors, and sure enough, FMCSA’s plans for raising the minimum bond level for brokers and freight for­warders will take effect on Oct. 1. That’s right. As of Oct. 1, the bond level for brokers and freight forwarders will be raised from its current level of $10,000 to $75,000—and even I have been asked several questions regarding this issue by brokers and carriers alike in the weeks leading up to the compliance date.

As such, with any legislative or regulatory rulemaking, the challenge has been set. As brokers, freight forwarders and carriers with a brokerage division get set to comply with the $75,000 bond, an association representing smaller brokers and agents has filed suit to protect the bond as it currently stands and maintain a market status quo on the current broker bond level. As the truck­ing industry knows too well, waiting on a decision from the Court of Appeals is a fruitless endeavor, as we experienced with our very own hours-of-service litigation. In fact, the compliance date on the new HOS provisions came and went before the court even issued its decision, so perhaps it would behoove the brokers and freight forwarders to prepare for the new bond bill to proceed as written.

This piece of legislation is about financial responsibility. It’s about protect­ing the folks who have actually done the work and allowing them to be paid for their services. And it’s about the prevention of fraud. Unfortunately, the broker industry does have those proverbial bad apples that seem to leave lasting effects on the rest of the industry—and trucking knows something about that.

Legislative and regulatory platforms have often been built around the ac­tions of a few bad apples. CSA was developed to weed out the bad apples and get them to leave the industry. In fact, many of the rules today were designed to combat the people who look for ways to get around the rules. Unfortunately, safe, responsible and compliant carriers that take active leadership roles to promote safety at the state and federal levels are the casualties of the regula­tions needed to rid the industry of those bad apples. These carriers have had to change the way they perform their daily business as a direct result of CSA.

As an industry comprised almost entirely of small businesses, trucking is all too familiar with that very principle. Certainly, there are big players out there in the industry, but the majority of motor carriers operating on today’s highways are small businesses whose lives are also affected when a broker fails to make due on what is promised to them. In our association, our members, large and small, band together to represent the industry with one voice in an effort to pro­duce mandates that level the playing field for all. In other words, instead of fil­ing a lawsuit against an increase in broker bonds or trying to stop the initiative with an injunction, perhaps policing your own may be the best way to go.

Large and small brokers that work together to stop the bad apples from proliferating might actually go farther than trying to stop a mandate that would aid in that fight and thus create a level playing field for all broker and freight forwarders in the business.