With the signature of the US President Barrack Obama on the MAP-21 legislation on July 6, 2012, a $75,000 surety bond was implemented as a requirement for companies operating as a freight broker.
A freight surety bond assures the shippers that authorized carriers would be paid by freight brokers to deliver their pallets and it won’t be used in any illegal matter.
Since then, the huge raise of the freight broker bond has been a big controversy in the US, for folks who are entering or continuing this type of business venture. Existing small freight businesses feared losing them for not being able to meet the financial requirements. While some filed lawsuits against this bill, there was no decrease in its cost. Freight brokerage business owners were given 2 months of grace period to meet the $75,000 freight surety bond requirement where usually, surety industries only give business owners a 30-day grace period.
The implementation of this bond has caused a huge impact on a few small and home-based freight brokerage businesses, causing them to stop their operations due to the lack of financial support. Only the larger, more established freight businesses could afford to renew their licenses.
There was also some confusion about this bond as to its availability but there are plenty of surety companies that are willing to help with this matter. Sometimes collateral is needed to comply with this requirement but that applies mostly for organizations considered more risky for the Bond Companies, such as companies with less-than-stellar financial status, insufficient credit, and so forth.
Action Transport Inc is proud to be fully compliant with Industry and Government requirements and we welcome your business with confidence. Get an Instant Freight Quote today through our website or by calling 800.820.2797.