Bill targets ‘fly-by-night’ brokers, boosts bond to $100K
The Snowe-Klobuchar initiative establishes stricter requirements for those seeking broker/forwarder authority as well as specific guidelines from FMCSA’s review of authority applicants and applications.
The Trucker Staff
6/15/2010
WASHINGTON — U.S. Senators Olympia J. Snowe (R-Maine) and Amy Klobuchar (D-Minn.) on Tuesday announced the Motor Carrier Protection Act, bipartisan legislation designed to strengthen and improve regulations for motor vehicle operators in order to prevent brokers and intermediaries from abusing the system and defrauding motor carrier operators.
“All too often motor vehicle operators fall victim to the deceitful behavior of fly-by-night brokers and freight forwarders who engage in preposterous criminal activities, such as financial fraud,” said Snowe, a member of the surface transportation subcommittee which has jurisdiction over the legislation. “By updating current regulations, this legislation will give trucking operators peace of mind that they will, indeed, receive payment for a job well done.”
Small businesses truckers who are victims of corrupt brokers and freight forwarders, have little to no legal recourse to recoup losses imposed on them by fraudulent organizations, according to the bill’s authors. The Snowe-Klobuchar initiative would provide motor vehicle operators with the tools they need to protect themselves and their company from abuse.
The Senators worked closely with the Owner-Operator Independent Drivers Association and the Transportation Intermediaries Association to develop their legislation.
“If passed, this law would put a stop to a system that allows rogue brokers and scam artists to operate unchecked,” says Todd Spencer, executive vice president of OOIDA. “Too often, we’ve seen bad brokers get away with collecting payment from shippers but leaving truckers holding the bag.”
Among its major provisions, the bill:
• Increases the broker bond from $10,000 to $100,000 and applies the bonding requirement to freight forwarders.
• Establishes stricter requirements for those seeking broker/forwarder authority as well as specific guidelines from FMCSA’s review of authority applicants and applications.
• Establishes strict penalties for violations including unlimited liability for freight charges for brokerage activities without a license or bond, and authorizes private damages remedies against companies who violate FMCSA regulations.
• Creates a requirement for brokers and freight forwarders to renew their operating authority annually and requires FMCSA to revoke operating authority that is not renewed annually. Revenue generated from the renewal fees will be dedicated to FMCSA’s oversight and enforcement of broker regulations.
• Establishes strict regulations on bond providers and the manner in which bonds are administered.
• Clarifies that motor carriers must have a brokers or forwarders license and bond to put freight on another carrier for compensation, and
• Requires separate registration numbers per authority, and that whatever authority is used in a transaction must be stated in writing.
Kevin Jones of The Trucker staff can be reached for comment at kevinj@thetrucker.com.
Find more news and analysis from The Trucker, and share your thoughts, on Facebook.