When Congress recently passed the “Moving Ahead for Progress in the 21st Century, this sweeping legislation included extensive changes regulating the activities of Freight Brokers by the Federal Motor Carrier Safety Administration (FMSCA), including replacement of the former $10,000 ICC Broker Bond (BMC-84) with a new $75,000 Freight Broker Bond. In addition, Freight Forwarders, who were never subject to this requirement, must now also fulfill this $75,000 requirement.
The implementation date of October 1, 2013 is approaching fast, however, FMSCA will provide Freight Brokers and Freight Forwarders until October 31, 2013 to file the new bonds. On November 1, 2013, FMSCA will review its system to determine which Freight Brokers and Freight Forwarders have not yet filed the new bonds. FMSCA then will send letters to these entities, which will have 30 days from the date of the letter to file the new bond.
The new requirement will be effected by filing a new bond form (BMC-84) to replace the existing form. FMSCA is revising the form to reflect the new amount and to include Freight Forwarders. The new form will be posted to FMSCA’s website by October 1, 2013. A Freight Broker or Freight Forwarder that operates without registering could be fined as much as $10,000.
The new $75,000 Freight Broker / Freight Forwarder Bond will ensure compliance with the rules of the FMCSA, including timely payment. The law provides that the surety bond “shall be available” to pay any claims against a Freight Broker (or Freight Forwarder) for failure to pay freight charges if: 1) the broker consents; 2) the broker does not respond and the surety determines that the claim is valid; or 3) the claim is not resolved in a reasonable period of time and it is reduced to judgment against the broker.
Surety Bond Associates is a market for the new $75,000 Freight Broker / Freight Forwarder Bond. Apply now to avoid the $10,000 fine.
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