Freight brokers are expressing frustration over a recently implemented provision of the Moving Ahead for Progress in the 21st Century legislation (MAP-21) that raised the surety bond from $10,000 to $75,000, a hike that could threaten many brokers’ ability to continue operations.
While MAP-21 took effect on October 1, the FMCSA delayed enforcement of the surety bond provision until December 1. Brokers who failed to comply by that date will be required by the FMCSA to cease operations and will need to have a backdated bond if they pay later.
The Association of Independent Property Brokers & Agents filed to stop the bond increase after President Obama signed the law in July, but a federal court denied the motion this week. Brokers nationwide argued that the higher bond, required as a guarantee of payment and fair dealing, would either put them out of business or force them to integrate with larger brokerages to cover the cost.
Canadian carriers are also left unsure about how MAP-21 will apply to them. The Canadian Trucking Alliance has asked the FMCSA for clarification about the law’s impact on Canadian operators and awaits an answer.
If a higher bond threatens your ability to remain in operation, EZ Invoice Factoring’s freight broker factoring program can help. EZ Invoice Factoring has a number of factoring partners that deal extensively in the trucking industry – by selling your open freight bills you can gain immediate access to cash to keep your brokerage compliant.
Learn more about the benefits of freight broker factoring, and contact EZ Invoice Factoring to receive a proposal today.
