SDDC Freight Carrier Bonds
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What Is an SDDC Freight Carrier Bond?
The Military Surface Deployment and Distribution Command (SDDC) is the transportation division of the U.S. Department of Defense (DoD). SDDC freight carrier bonds are required for all transportation service providers moving cargo for the DoD.
This bond, also known as a DoD performance bond, ensures that freight carriers will deliver goods according to contract terms or repay the SDDC for failure to do so.
How Do SDDC Freight Carrier Bonds Work?
Like all surety bonds, DoD performance bonds are legally-binding contracts between three parties:
- Principal: The transportation service provider moving freight for the DoD
- Surety: The provider who underwrites the bond
- Obligee: The Military Surface Deployment and Distribution Command (SDDC)
If a transportation service provider (TSP) defaults, misses deliveries or goes bankrupt, the SDDC can file a claim against the bond to recoup financial damages.
Who Needs a SDDC Freight Carrier Bond?
Any TSP carrying freight for the DoD must file a surety bond including:
- Freight Carriers
- Freight Forwarders
- Freight Brokers
- Logistics Companies
Local drayage, commercial zone, barge, rail, sealift and pipeline carriers are exempt from the bond requirement.
What Are the DoD Performance Bond Requirements?
Bond coverage varies between $25,000 and $100,000. Surface freight forwarders, shipper agents, brokers and air freight forwarders typically need a $100,000 performance bond.
Freight carriers with 3+ years of experience with the DoD must file a bond for 2.5% of their total DoD revenue for the prior 12 months. Coverage must be at least $25,000 and is capped at $100,0000.
SBA-registered carriers require the following performance bond coverage depending on how many states they operate within:
- 1–3 states: $25,000 coverage
- 4–10 states: $50,000 coverage
- 11+ states: $100,000 coverage
Verify your exact requirement with the SDDC before purchasing your surety bond.
How Much Do SDDC Freight Carrier Bonds Cost?
The cost of a SDDC freight carrier bond varies per applicant. Factors determining pricing include credit score, personal financials, business financials, type of carrier, operating region and more.
Qualified applicants may pay as low as 2% for their SDDC performance bond premium with SuretyBonds.com. Apply now for an exact quote.
How to Become a SDDC-Registered Freight Carrier
There are several steps you need to take to become an SDDC-registered freight carrier:
- Apply for a Standard Carrier Alpha Code (SCAC) with the National Motor Freight Traffic Association
- Get certified for e-payments with the U.S. Bank Syndaca
- Maintain a valid DOT operating certificate for three consecutive years
- Complete a CBA license application
- Purchase a DoD performance bond from SuretyBonds.com
- Get $150,000 cargo insurance coverage ($25,000 for bulk fuel carriers)
- Become HAZMAT certified with the PHMSA
- Confirm compliance with the FY2019 National Defense Authorization Act Section 899(a)(1)(B)
- Submit registration materials to the SDDC
View the full registration checklist for more detail.
How Do I Get a SDDC Freight Carrier Bond?
Although the registration process can be quite intensive, we make the bonding process quick and easy for DoD freight carriers and forwarders. Just follow these three steps:
- Apply for your bond online
- Provide your SCAC code and financial documentation as needed
- Pay your invoice using our convenient payment options
You’ll receive an instant digital copy of your bond after checkout. Apply now to get started!
Have Questions?
Call 1 (800) 308-4358 to talk with a Surety Expert today.
