A few years ago, President Obama signed the Moving Ahead for Progress in the 21st Century Act (MAP-21), which authorized federal funds for transportation spending and made changes to existing federal requirements for many entities throughout the transportation system. One of these changes included an increase in the surety bond amount required for freight brokers and forwarders to obtain their license. The act increased the bond amount from $10,000 to $75,000, which drew the ire of many brokers throughout the industry. The new requirement was challenged, but the significant increase was upheld. Brokers and forwarders were required to file these $75,000 bonds by October 1, 2013 meaning a large portion of the freight broker industry will be up for renewals.
5 Facts to Know Before Renewing Your Freight Broker Bond
- If you are a broker who has been in the business for a couple years without any claims filed against your bond, you can likely net a better rate than your initial bond rate two years ago.
- If you are unhappy with the rates your current surety provider is offering you, other surety companies work hard to search for better rates for their clients.
- Bond rates vary according to several factors. Your credit report certainly has a significant impact, but more years of experience and a clean work history can also help reduce your rate. Your rate could also vary according to which market you are located, as surety companies may calculate rates differently based on the broker’s state of business.
- Freight broker bonds are valid for one year, effective from their issue date.
- You must renew your freight broker bond prior to the your policy’s end date.
The authority for freight brokers and freight forwarders is the Federal Motor Carrier Safety Administration. Their website contains more insight and information regarding industry-related requirements, forms and documentation. SuretyBonds.com also developed a more comprehensive guide on the registration and bonding requirements for freight brokers and forwarders.
Make sure to contact a reliable surety provider for your freight broker bond renewals. The last thing you want to do is overpay for a bond you can file for much less. SuretyBonds.com has been delivering rates for these renewal bonds as low as 1.25%, or less than $1,000. Although there are several different factors that impact your bond rate, SuretyBonds.com works hard to find you the best rates as fast as possible. Interested brokers and forwarders can fill out a quick bond request online or call 1 (800) 308-4358 for a free, no-obligation quote.
Additional Freight Broker Bond Resources
Photo Courtesy SounderBruce (CC BY-SA 2.0)