AIBPA Appeals $75,000 Bond Requirement for Freight Brokers
Thousands of small freight brokerage companies might have to shut down Dec. 1 due to the "Moving Ahead for Progress in the 21st Century" Act, according to an appeal filed by the Association of Independent Property Brokers & Agents (AIPBA) in the U.S. Court of Appeals for the 11th Circuit. It said one provision of the 600-page transportation bill, Section 32918, requires the Federal Motor Carrier Safety Administration to raise the bond requirement for freight brokers from $10,000 to at least $75,000. FMCSA issued a new rule Oct. 1 to implement the provision, without public participation, AIPBA said. The appeal said FMCSA's manner of enforcing the new bond amount was done improperly, and FMCSA should have to go through proper rulemaking and fact-finding before FMCSA enforces a new bond amount.
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Many of the brokers are family businesses who will no longer be able to compete with large companies that can easily secure the $75,000 bond to stay in business, AIPBA said. James Lamb, president of AIPBA, said: "The new $75,000 bond requirement will force the overwhelming majority of these small companies out of business on the eve of the holiday retail rush. With fewer competitors, big brokers will be able to dictate higher shipping costs. As the cost of shipping rises, consumers will see higher prices for just about everything sold in the U.S."