Tuesday, September 4, 2012

Freight Broker Cost Hurdle


This summer a new 600 page bi-partisan highway bill (MAP21) was passed.  I’ve done a little reading about it since it could greatly impact our business.  The bill, as all bills, is loaded with lots of stuff.  One of the cost increases called for in the bill is the freight broker bond requirement from $10,000 to $75,000.  When I first read about the increase I was concerned about all the new freight brokers we train each month.  Their cost to do business will increase enough to keep many would be brokers out of the game.   The small guy may once again get the shaft.  Large freight brokers will easily be able to continue on.  They can spread this new cost out over all their loads.  But new start-ups will have this hurdle of money to jump.   They don't have loads of loads to spread out this cost.   New graduates usually become agents for other freight brokers (which I recommend) but some really want to start their own thing.  That just got harder.   Ponying up an extra $65,000.00 is no small chunk of change.  

The good news is the cost increase may not be enforced for a while. On the government FMCSA website the bond is still $10,000.00 

http://www.fmcsa.dot.gov/rules-regulations/administration/fmcsr/fmcsrruletext.aspx?reg=387.307

Since it is an election year, enforcing new government regulation is not a popular thing  for the current administration to do. 

I will try to keep up with this moving train and keep you informed.  So for now the bond is still $10,000.00 but likely to change.  Regardless freight brokering is a great business, always needed and never boring. 

Moving forward,

Jeff Roach

www.pajamalearning.biz