Illegal Brokerage Among Carriers Still Gray Area

 On October 1, the FMCSA issued a Final Rule that adopts regulations required by MAP-21. The rule includes the provision which sets a minimum financial security of $75,000 for brokers and freight forwarders, including carriers that occasionally broker loads.

In the Final Rule, the FMCSA states that compliance with the new rule will cost the industry $15.9 million initially. It has identified 2,212 freight forwarders that are impacted and estimates that the financial impact will be $1.69 million in the first year. For the 21,565 brokers on record the initial cost will be $14.21 million.

You’ll notice that there is no estimate for the carriers that need to obtain a $75K bond and broker authority to comply. That’s because the FMCSA admits that it has little information as to the extent of the unlicensed broker population within the motor carrier industry, which makes estimating the costs to this group difficult, if not impossible.

Since this population is difficult to identify, the FMCSA will initially work with industry groups to get complaint information on motor carriers that are acting as brokers illegally through its National Consumer Complaint Database.

The FMCSA also warns that carriers that act as unlicensed brokers may be subject to private civil actions.

So, unless you are moving every load on your own equipment and under your own carrier authority (for at least one leg of the journey), you need to obtain broker authority and the $75,000 bond that goes with it.

If you’re a DAT customer, learn more about a special bond offering for DAT customers through preferred solutions provider Integro.

As we’ve noted before, you must have active operating authority as a broker if you want to post your loads to DAT Load Boards.

For more information on how MAP-21 impacts carriers, read: Surprise! The Broker Bond Affects Carriers.

Image via Flickr





Comments

About DAT

DAT operates the largest truckload freight marketplace in North America. Transportation brokers, carriers, news organizations and industry analysts rely on DAT for market trends and data insights derived from 256 million freight matches and a database of $68 billion of market transactions.

The Original Load Board - Trusted Since 1978

The company was established in 1978 as the Dial-A-Truck (DAT) load finder service at Jubitz® truck stop in Portland, OR.

TIA
OOIDA
CSCMP
MATS