Pipersville, PA (PRWEB) September 11, 2013
Freight brokers and freight forwarders alike have been bombarded with information regarding the FMCSA’s upcoming $75,000 bond or trust requirement. For the last 12 months they have been told they need a bond or trust no later than October 1st to be compliant or they will be put out of business. Recently the FMCSA stated they will, be providing a 60-day phase-in period beginning October 1, 2013, to allow the industry to complete all necessary filings. Some are interpreting this as an extra 60 days to be compliant, but this interpretation just may be the final nail in the coffin for many freight broker businesses throughout the country.
Prior to the $75,000 bond, freight brokers were required to have a $10,000 bond or trust in place. The new requirement is not just an increase to the current bond, but a new bond. That means all of the old bonds had to be cancelled. Cancellation notices on the $10K bond have been sent out by all bonding companies, meaning all $10K bonds will expire by October 1st.
The FMCSA has been clear that brokers must have a bond or trust in place on October 1, 2013 to remain compliant.
Michael Weisbrot, Vice-President of JW Surety Bonds said, “Brokers that use the 60 day grace period to procrastinate need to know that the surety industry does not backdate bonds more than 30 days. That means the bond is likely not an option for those that wait until 12/1 from any bond market, not just us. We’re advising all of our clients to get what they need to be compliant now. It is not worth risking your business to wait. If the bond is repealed, we’ll be offering full refunds so there is no reason to hold off.”
Until recently, many brokers had problems qualifying for the new $75,000 requirement. Those that did qualify had to post collateral. As of recent, any broker that is in need of a $75K bond can qualify for one without business financials and without the need to post collateral.