Broker bond increase shuts down thousands of brokers as group appeals rule

dockThe Dec. 1 deadline for brokers to comply with the MAP-21-stipulated increase in the minimum bond requirement for freight brokers has already shut down 2,768 brokers, according to a broker trade association.

MAP-21 required that brokers must have a $75,000 bond, up from the previously required $10,000. The Association of Independent Property Brokers & Agents — a trade group representing brokers — filed Dec. 3 an appeal to the Federal Motor Carrier Safety Administration’s rule, arguing the agency violated the Administrative Procedure Act.

The agency’s rule, which required compliance by Oct. 1, gave a three-month grade period for brokers to up their surety bond minimums — Dec. 1. FMCSA said after that date it would revoke authority of brokers who did not have the required bond minimum.

The association of small-and-mid-sized brokers stated that as of Dec. 5, the agency listed 21,565 active brokers, which it says is 13 percent fewer brokers than last month. Surety bond provider JW Bond Consultants puts puts that number higher. The Pennsylvania-based company estimated about 3,800 broker authorities have been revoked by Dec. 3.

A three-judge panel denied Nov. 26 AIPBA’s request for a temporary stay of the rule. FMCSA said it did not have discretion over the amount required in the rule, because it had been set by Congress. It added federal law does not mandate a notice-and-comment period when agencies publish rules to comply with a statutory change and rulemaking procedure would be impractical or unnecessary.

The Transportation Intermediaries Association, the American Trucking Associations and the Owner-Operator Independent Drivers Association supported the increased bond requirement.