New $75,000 bond?

There you go, its up to you, the carrier to do your homework, not the government. What guarantee does a shop have that they will get paid? A lumber yard? A concrete guy?

Run your business as a business and stop looking at others for your failures. Without risk there is no reward.

 

The raising of the bond is just a feel good law. It's going to accomplish nothing. At first I thought it maybe a good law but then reality set in. But hey, I hope you guys feel all warm and fuzzy inside.

 

Wow, my faith in O/O's is being restored. Seems there are a few that are running a business vs just owning a truck.

You are not comparing apples to oranges. What you are describing is a safety function. Something that should fall within the limited scope of the government.

Can't understand why they would regulate a business practice but not require a broker to have any knowledge of HOS, hazmat regs, securement, etc.

Just OOIDA and TIA getting in bed together to sell more insurance while selling out the O/O and small broker.

 

Oh the other hand, I very well remember when anyone could call themselves a broker. I have seen many times the same people open under several different names in the same building after leaving O/Os holding the bag. Close on Friday, open with a new name Monday. "Oh, you are owed for a load from ABC brokerage, I'm sorry, they went out of business. This is XYZ brokerage, and we happen to have a load that's just what you're looking for."

Saw that way too many times. Lots of times you got loads with total info to the broker that was maybe your name, company name, and tag number, but not always that much. It was go here and load, then call me when you're empty. Regulated freight, non-regulated freight, it didn't make any difference. If it would fit, put it on and go. Paper placards to tape onto the door sometimes. I always threw those in the sleeper.

If a higher bond is not the answer for non-paying brokers, what is?. A bond doesn't cost very much per year. I am required to carry a 50k bond with my business. If I buy it for three years instead of one, I can get the whole three years for $450.00 total.

The thing about a bond that will make someone think twice, is you are charged back for any payouts on the bond. It's not like insurance. They pay out 10k, they're coming after you for that 10k. Your business and personal assets are put up unless you have plenty of assets on the business side to more than cover the bond. Your credit takes a hit, you are filed on and collected, or many other things, will make it much harder to get a bond, and the prices will go up greatly.

If someone that is moving many thousands of dollars of freight, and is handling that kind of money, with only a promise they will pay the carrier, and can't come up with 10k, or 75k in net worth, they don't need to be a broker. The bond isn't a 100% deterrent on a broker to skip paying, but it sure helps when they know after a few filings no bonding company will touch them. And yes, there are always the crooks that work the system and can get away with things.

I do like the idea of a sliding scale bond requirements dependant upon dollar amount brokered the previous year. It could work like a new entrant IRP. You estimate the first year, and get anywhere from the minimum bond on up according to your estimates, with each year after that going on last years sales. The high volume guys would think twice about shafting someone if they had a 1 million bond.

Just some thoughts.

 

I was under the impression that a $10,000 bond means you have to actually take $10,000 cash and give it to the bond company to be bonded, and the money was put in some escrow account...and thought that $75,000 meant that brokers would now have to take that much more cash from their own pockets.

Sorry for my ignorance!!!

Do brokers have DOT #s if they are not also a carrier, just a brokerage?

 

On a bond you have to have a net worth of what the bond is, say 10k-75k ect. The bonding company will check your credit and holdings to make sure you are able to come up with whatever they have to pay out. If you have enough cash, you can put your money in an interest bearing account that is specified for the bond and earn money on that cash, instead of paying for a bond where your posessions are at stake instead of the sure thing of cash.

 

So for all of you that feel the bond being raised is just a terrible idea, as I said before, when I had my bond it cost me nothing, zip, zilch, nada. So I checked into what it would cost to get a 75,000 bond with a bonding agent, it works out to about 500.00 a month. (IF I didn't have as good of credit as I have).

That is peanuts for someone that gets up to a third of what the load pays, has almost NO insurance obligations, has NO IFTA tax, has NO truck payment, has NO trailer payment, has NO fuel cost, NO workers Comp, NO property tax, NO ad valor um tax,and has NO driver to pay!

IF they can not afford that, they should NOT be in business, PERIOD! It is a business expense, NO more NO less, quit crying me a river, do I believe in more government intervention, absolute not, do I believe that every Tom, Dick, and Harry that gets a wet dream some night and what's to be a pseudo trucker should get to "practice" on people that have a hundred times more invested and at risk than they do, absolute not?

Is this a cure all for all of the scam artist out there? NO, but it might just make it more difficult for some.

JMHO,

Stan

 

Kansas, would love to see a link to a company that is charging $500 for good credit to be bonded. It will cost me $300 with a secured CD placed as collateral.

Great credit, history in the business, $150K in assets is running more than $5k per year. Several brokers that have been in business for years, a credit score you would not think twice about hauling for but because they are not large enough they can't get bonded without putting up cash.

And regardless if it cost $1 or $100, it is a matter of principle. This is not the roll of the government. Plus, this was push by the TIA who sells these bonds. And it will force smaller brokers, typically not members of TIA, out of business and force them to become agents of larger brokers, that are members of the TIA and the bond doesn't effect them.

How does all this not strike every single business owner on this forum as wrong?

 

This is not an accurate statement.

 

Yes it is an accurate statement with the type bond I have, and probably most/all others. Every bond I have had, or know of, the person needs a net worth of the amount of the bond. A bond is not an insurance policy, they don't just pay out and go up on your preminum. They pay out, and come after the bond holder for what they paid. Why would they give you a bond if you didn't have the means to recover their payouts. I would assume excellent credit and bond history may give some leeway, but you won't get a bond unless you have money in the bank or property whose curent free and clear worth is able to be recovered by the bonding company. Try to get a bond if you don't own your home or business property.

They may not tell you this up front, but that's why they want your complete history, run credit and some background on you, before they approve the bond. Read the fine print. I have to go to refresher school every year, and bonds are one of the things we get pretty deep into.