$100,000 Broker Bond

A driver that becomes an o/o with less than 10 grand is a fool, Insurance alone can want several months in advance, figure $1,000-$1,500, another $500-$1,000 for authority and paperwork, so you're talking about buying a truck and a trailer for 8 grand including taxes, and running with no maintenance fund, no fuel money, and no backup cash for slow freight times and emergencies. And I'm sure I'm missing a lot of little costs as well.

A broker needs a computer, a phone, and an internet connection.

The broker bond is not cash only, and a driver is not handling other peoples money. You want no broker bond? No problem. Have all payments from shippers to brokers go into an escrow account which the broker cannot touch until load has been delivered and contract with rates has been presented, then the escrow account pays the broker and the driver. This could also be a boon to brokers by forcing shippers to put the money in the escrow account for the loads in advance.

It's just a thought and would never happen because it makes sense.

 

I understand what your saying but im asking you to look past the smoke and mirrors.That large bond is not going to help you as an o/o it will only help the big brokers to drive the little guys out.with out the little brokers the big ones will have all control and believe me you dont want that.I still dont understand how you cant see how it will hurt you and me.Think about those big brokers getting freight for 3.00 and offering it for 1.20. What do you think is gonna happen to the small broker who gets it for 3.00 and offers it for 2.50.If They go out of business you and me are screwed .If you dont haul it for 1.20 they will let their trucks move it,and the more owner ops that go out of business the more trucks the big boyz buy.

 

If that's all that is needed then why does anyone use a broker? They should just do it themselves. Far more involved than just those three things.

 

I said those are the tools needed, not all that's involved. Think about it, a shady broker can just use the computer to double broker loads without even contacting a shipper personally. These are the same sort who would stiff drivers for a pile of cash, disappear, then reappear with a new name and mc#.

If escrow were used it would not be an added cost, it would replace the cost involved with a bond, possibly be cheaper. Yeah there's a lot of little details that would need worked out and it would never happen, but it COULD be made to work and work better than the current system.

Sadly the last person to get paid usually is the one that doesn't when things go wrong, and that is the carrier, who also happens to be the one usually fronting the most expense and risk.

 

There was someone on here trying to justify an escrow account. No shipper(that does any volume) is going to put money in an account before the load is picked up and the fee's the guy was talking about were as high as factoring.
Main thing is to check credit before you take a load. Things can still happen with that. The higher bond means that someone may get paid a few cents more on the dollars if the broker goes out.

 

Update from TIA if anyone wants to read it.
http://www.tianet.org/staticcontent/staticpages/Letter_to_Members_August_15,%202012.pdf

I think you will see more and more "dispatch" services pop up. When you are talking about escrows and this bond. The service could run on the O/O's authority and basically factor the payment to itself. Or another company setup for funds only. Will allow "brokers" (dispatchers), to work around the bond. A little tricky to run if you want to dispatch lets say 10 single unit O/O's, that would be 10 contracts to each shipper/broker.

 

Being new to this business this post is very informative. I am coming over from the Federal commercial construction side of the world and after 15 years and watching the way big companys are acting I have pretty much left that world. Having no experience with broker bonds I have a question for those that have had dealings with trying to get money from them. Has anyone been able to make a claim on a broker bond and got paid? I ask based on the world I have come from that just because a company has a bond, is in no way guaranteed that you will get paid. I have been stonewalled a few times in the past for non-payment from companyies. I have had to resort to lawsuits to try to get my money. I currently have one that has been going for over a year, and then feedback from the other company is that they have enough money to wait me out, based on the fact that they are using my money to pay their law firm.

 

It is nearly pointless. I know that my family filed on a few. You might get a few pennies on the dollar. A single broker can whip through $200k in a month. By the time the credit looks bad, it might be 90 days. At 4 months, you have $800k filed (as an example) on a $10k bond. Your time and resources are better spent on pulling credit and making sure that the broker is established. Transcredit and Compunet credit are two resources that also coincide with load board credit ratings. They will sell you packages to lower the amount of each credit request. When in doubt, just look for another load. Or if it pays way to good for a certain lane, it probably is to good to be true.

 

FourCircles, Thank you for the information. Seems to be the same issues with where I can from. At least I know going in not to drink the koolaid.