Brokers who have made a good living ripping off truckers on their skimpy $10,000 bond may very well have seen the end of their run.
The Federal Motor Carrier Safety Administration will issue an advance notice of proposed rulemaking as a step toward possibly raising broker bonds from $10,000 to as much as $500,000 at the urging of the Owner-Operator Independent Drivers' Association.
In January 2004, OOIDA petitioned the U.S. Department of Transportation to initiate a rulemaking to create regulations raising the amount of the required property broker surety bond or trust fund from it's now $10,000 level to at least $300,000 and as high as $500,000.
On Jan. 3 FMCSA Administrator Annette Sandberg told OOIDA that FMCSA had reviewed the association's request and she had accepted the agency's recommendation to open an advance notice of proposed rulemaking.
"While we still have a lot of work ahead of us, both in making the case for this much-needed change and in countering the strong opposition expected from many in the brokerage industry," said OOIDA President and CEO Jim Johnston. "This decision will finally start that process moving. We are hopeful that those honest brokers who do conduct their business ethically will join us in this effort to build in the necessary protections against those who give the entire broker industry a bad name."
Sandberg said that the issuance of an advance notice of the proposed rulemaking "will allow the public to comment on the general need for changing the broker financial responsibility requirements and what level of increase would be appropriate."
The bonds are required to ensure the fiscal integrity of brokers. The broker bond was set at its current $10,000 limit in 1977 - the same year you could buy a new car for less than $5,000 and put a gallon of gas in it for 62 cents. At that time, there were only 70 registered brokers. Today there are more than 15,000 brokers.
Based on information received from bonding companies, OOIDA officials believe that a bond of at least $300,000 to $500,000 would be necessary to cover the amounts of unpaid transportation charges incurred by brokers today. The exact amount of the potential increased bond would be set based on the data provided by the public during the rule making process.
According to Sandberg, FMCSA hopes to publish the advance notice of proposed rulemaking in the near future.
-- Jami Jones
Land Line staff