RFX Blog

Implementation Of Increased Bond Goes Into Effect October 1st, Is Your Brokerage Prepared?

July 17th, 2013

Changes Are Coming

As most in the transportation industry are aware the re-authorization bill known as the Moving Ahead for Progress Act (MAP 21) was signed into law on July 6th, 2012. Several provisions within the law, including the increased broker bond requirement become effective on October 1st, 2013. Since deregulation in the 80’s the bond requirement has remained at $10,000. In an effort to modernize and provide more fraud protection from unscrupulous brokers and scam artists the Federal Motor Carrier Safety Administration (FMCSA) will now require brokers to file a $75,000 surety bond or trust fund agreement, over 7 times the current bond requirement.

• What Does The Bond Increase Hope To Accomplish


Supporters of Map-21 suggest that the increased bond will drastically reduce instances of fraud, non-payment and will cut back on the number of unscrupulous here-today-gone-tomorrow businesses. They also maintain that the added bond will increase the protection for the carrier and shipper alike and will defend against slow and non-payment by adding an extra level of financial security.

• Possible Negative Outcomes From Raising Bond Amounts


Whenever we are faced with new regulations and laws there is bound to be trepidation and speculation on how these changes will affect the way we conduct our business. With that said several dedicated, hard-working brokers will be put in a very difficult and unwanted financial situation and could face tough decisions about how to move forward. Do you take the steps necessary to become compliant with the new regulations by purchasing or acquiring the increased $75,000 bond or consider other possibilities?
 

• Increasing Your Bond


One consideration is going out and purchasing a $75,000 bond on your own. Standard Surety bond rates range from 1-10% of the bond amount for very qualified individuals/companies, to as much as 20% of the bond for those less qualified, while others bonding companies may also require collateral. The process for acquiring and maintaining these bonds will inevitably become more difficult because the increased minimum amount and escalation in risk in the underwriting & qualification process.

• Partnering with an established Brokerage Agency


As a professional in the transportation industry, it’s discouraging to see changes in legislation that could have a negative impact on your business or even cause you to close the doors in a worst case scenario. However in the midst of uncertainty, there is possibility for great gains if you partner with an established provider, and that’s where we come in.

• The RFX Difference
A $250,000 Surety Bond, financially stable business with a strong reputation since 1952. We take the approach that “You are the customer” and offer a partnership that allows you to seamlessly transfer your customers while maintaining the same entrepreneurial lifestyle that inspired you to get into business in the first place. By partnering with RFX, you will have the advantage of the best support system, technology, and marketing resources in the industry. Changes are fluid and RFX has positioned itself at the forefront by offering service and integrity that is unsurpassed nationwide. As the marketplace continues to change, we’d like you to consider growing with us. If you’d like to learn more about the exciting agency opportunities please call P-800-342-8822 ext. 206 or go to our website https://www.rfxinc.com/freight-agents.php to see the difference of “running on trust!”

Posted on July 17th, 2013 in Freight Agent Broker, Freight Logistics, Inc. News, Independant Contractor Trucking, LTL Freight Shipping, RFX, RFX News, Trucking Industry, Trucking Tips, Uncategorized