In October 2013 Freight Brokers will be required to obtain a $75,000 surety bond. Bonding Solutions has prepared for this increase and has rolled out several new programs to address any challenges in underwriting this bond at the higher amount.
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In order to operate legally as a transportation broker, a freight broker bond is required by the FMCSA (Federal Motor Carrier Safety Administration). Also known as a Property Brokers Surety Bond, BMC-84, or a ICC Bond.
Bonding companies have deemed this type of bond higher risk due to high claim volume. Bonding Solutions still has access to several specialty bond programs that offer low, standard rates.
Please fill out our sixty second application or feel free to give one of our Bond Managers a call.
These Terms refer technically to the Licensed Property Broker, outlined in Federal Regulations, 49 CFR 370 et seq. The process is best described as "travel Agency" of cargoes instead of passengers. Shippers and motor carriers use the Licensed broker instead of a travel agent, and though them, get together in an $880 Billion/year marketplace. The Freight Broker, as it is most commonly described, match shippers cargo with the most economical trucker and exchange about $1000 per transaction at the moment the cargo needs to move. The trucking market place is 10,000 times more complex than an an airline reservation system. Instead of 29 airlines exchanging information with 500,000 passengers, about movement between 600 or so airports, trucking is 300,000 motor carriers, exchanging information with 5 million shippers and other purchasers of transportation, between every Zip code available, not 600 airports. That is why there is no airline reservation system equivalent in trucking.
Freight brokers sell shippers their market matching expertise, for finding the best available truck for the least cost for the freight movement. The government issues a License, backed by a Surety Bond to provide financial responsibility in the transaction. Virtually all successful trucking companies have a License, not all are successful in separating their carrier liability from the brokered transaction, like a travel agent separates themselves from a loss, in the event of an accident. Brokering means "make a market" between a willing buyer and a willing seller, you know them as shippers (buyers) and motor carriers (sellers). Buyers demand and sellers capacity availability set the price for the movement that day, and that market is responsible for up to 40% of the $880 Billion/year. This marketplace is truly an "open" market, where no one player has more than 3% market share.
This stupendous daily complexity requires the presence of a skilled trained professional broker. The transaction size requires fiscal responsibility coupled with logistics contracting expertise. Training is provided by people skilled in the process like www.LoadTraining.com, America's first broker training school. Today there is a whole industry dedicated to improving the marketplace, eliminating liability for the travel agent type transaction, while maintaining sound fiscal responsibility. The marketplace is just beyond fledgling stage, and has not reached the sophistication of the NYSE. The marketplace is limited to those who have MC numbers, by those who have a License, and is not yet an "open" market, where shippers may enter and purchase transportation direct from those who own the trucks. The speed of the commerce in the transportation marketplace is a reflection of a lack of sophistication. An open market with a "free" information exchange is not yet available. There is no "ticker tape" in this marketplace. New free and open market advanced systems like www.LoadsHome.com dedicated to a risk free open market information exchange proposition and will eventually supplant the antiquated electronic bulletin boards that now serve as the internet information exchange process.
Brokering requires the prompt payment skill set, aging a payable as well as a receivable. Section 8 of the United States Constitution requires that the Federal Government "regulate the commerce between the States, Indian Tribes and foreign nations". Without sound regulatory capabilities it is quite possible that those who take the risk of providing the transportation service might not do so, if there is a risk that they would not be paid for that service. America's claim to the most powerful country in the world is due to the speed of its trucks. Every other trading block is dedicated to improve the speed of their trucks and the marketplace. It is now possible for a trucker to take a load of lemons from Lisbon, and deliver them to Moscow, without commercial interruption, as the EU is copying Section 8 of our Constitution. The Chinese spend $1 Billion/day building roads and infrastructure to catch up the speed of our trucking system so they can deliver 45,000 lbs of commerce 3,000 miles in 70 hours instead of months the Chinese currently experience. America would be the world's largest pasture without the speed of our trucks over the most sophisticated arterial road system ever devised by mankind. Freight brokers facilitate this speed and efficiency.
Freight brokers then are 40% responsible for bringing efficiency to American logistics. Sound cash management processes are required. There is an entire industry of companies dedicated to the fiscal sanity of the transportation process, from factoring companies, to broker/agent networks. Surety Bonding brings fiscal security to the transportation brokering process - all parties working to make America the safest place in the world to transact commerce.
Our ultimate goal is to provide our customers with an easy, fast, and professional experience, thus ensuring their statisfaction. Our performance is guaranteed!