Varies based on credit and how you are funding it. Considering for average credit it was 7-8% of the bond I would suspect we are looking at about $5-6K difference. TIA was pushing a garbage, fear bond last month at $3,600 but that was the minimum fee and still no guarantee you would be issued a bond or that you would get that money back.
Performance bonds are different than this. This is the government telling truckers they are going to protect them. Guess we are all bumbling idiots that need to be protected by the nanny state.
How does this sound? You conduct credit on the people you do business with and set the standards and terms based on your own standards. Adding additional expense to a business I am doing business with for ZERO good reason other than the TIA and ATA want to limit access to the market of the smaller guy is crap.
And the argument that if some can't afford something then they shouldn't be in business is BS.
By that logic then we could easily say that if an O/O can't afford the cost of an EOBR then they shouldn't be in business is a valid justification.
Broker $10,000 bond petition
Discussion in 'Freight Broker Forum' started by MSTEECEE, Sep 29, 2012.
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A broker needs a phone line, fax machine, and a bond. If they can't afford that, then no...they shouldn't be in business because if they can't afford to keep a phone line, fax machine, and a bond, how can they afford to pay you to haul their freight? It takes money to make money. If you don't have money, you need to sell your time and skills to somebody who needs a helping hand so that you can earn some money. Save up, invest wisely, and someday you'll have the money to go into business for yourself. Or, you can find people with money who believe in your ability to make their money grow and they can fund your start-up.
When I put a load on my truck I want to be 100% sure I'll be paid for the service I'm providing. I'm not saying credit checks are not important...but the bond acts as an insurance policy against a broker failing to pay. That failure may not always be the broker's fault...perhaps the shipper never paid the broker, but that isn't MY problem. I already moved the freight, and I need to be paid. If the broker can't afford to front the money for the shipment in order to pay me in a timely manner while they go after the shipper for payment, there needs to be an easy way for me to collect. Suing a broker isn't practical, because you've got to file the lawsuit in a court with jurisdiction in the matter...which is most likely going to be local to the broker, which means you'll have to take time off work and take a road trip (unless you're lucky enough to schedule a run that allows you to appear in court) in order to argue your case. The broker, on the other hand, is probably working with local shippers to his region...which means if he's got to sue to get paid, it's going to be conveniently handled in his local court.
Like I said, I just want a mechanism in place to guarantee that I'll be paid for the work I've done. Just like I've got to carry insurance, brokers have to have that bond.VisionLogistics, aiwiron and Lilbit Thank this. -
A bond is not a guarantee you will get paid. And if this was the intention of this act then they would have created a bond structure that was based on the volume of business that the broker is doing. But that would go directly against the intent of this bond - to make it even harder for new brokers to enter the market and give more control to the mega carriers and brokers.
Again, what makes the trucker so special that they need to be protected? Very few business are afforded this type of protection.
But if you want it are you willing to also get a bond so that the broker knows you are going to show up and deliver the product? Let's be real about all this. A couple groups that are only interested in helping grow market share for their members push this and we have all these people that bought a job blindly nodding their heads about how great it is that competition in an industry they have issues with is reduced.
Can't say I am surprised but it still is amazing that so many truckers are supporting the growth of TQL, CHR, England, etc. You would think you all would be supporting creating more competition for these types and not less.
But since you are for the government having more say in your business and life. And feel they need to protect you and everyone else then you will be for EOBRs, stricter HOS regulations, dash and cab cams, speed limiters - the list goes on.
Bunch of BS - "Oh, protect me. I'm special." Pssst. What makes the trucker so special they should have the false and costly protection but the broker doesn't get protection from you and the customer that owes them?LSAgentOZR and G/MAN Thank this. -
or do you mean you have to have that much in assets.
and i have had a broker bond before, it didnt put me in dutch anywhere near that amount.
and fact is the sword cuts both ways , one can do due diligence on a broker and still get ripped off, or you can not check anything and get ripped off. i dealt with brokers in the past who had excellent ratings, always paid on time and boom , the guy gets in the middle of a divorce, gets caught dui , and next thing he all goes all to hell.
i always(even when i had a broker bond) felt it was low. but with that being said getting paid off of a bond is a real pain. it isnt as easy as most think. -
Take out an insurance policy on the loads that you don't have that 100% warm fuzzy feeling on. Nobody is offering insurance like that? Perhaps the market place has a need for it then, in which case find a venture capitalist do the research and all the other blah, blah, blah to determine if there is profit in starting a business doing just that. Now you are protecting yourself and your business interests, rather than some cost increasing government regulation. Compare it to the old days of buying an insurance policy out of a vending machine in the airport. Buy the policy, plane crashes, whomever you named as beneficiary receives *insert dollar amount of policy you bought here*. Buying the insurance policy was not a guarantee that the plane would or would not crash. The bond requirement no matter the dollar amount is the same. NO guarantee.
The mechanism is in place already, it is you, taking the time to do the absolute best you can do in every situation. Over the years people forget things, for example. There are no guarantees in life, none, zip, nada. No matter the amount of regulation or lack of regulation, nothing is guaranteed, with one exception, death, we will all die eventually, guaranteed.BigBadBill Thanks this. -
I don't know whether I support this or not yet, but I do have a few questions.
There are some claims in this thread that the cost would be passed to truckers. I don't think this holds muster. IF this bill would force out 10 or 20% of brokers (which I don't believe it would do) How is this bad for truckers ? I don't have a hard time finding brokers, I have a hard time finding ones with loads worth pulling. I think less brokers would create less bidding wars on freight raising freight rates. So do you think the cost would be raised on shippers, lower rates for truckers, both, or neither ?
There are also some claims about our responsibility to "check out" brokers. I've been doing this, I always check that their MC is valid, and I look at their credit score. now if the MC wasn't valid, that would be an obvious no-go for me. But this idea that credit score is a measure of a good broker, I don't know if that holds muster. Some of my favorite brokers have 90-95 credit rating and some of my least favorite are 100. Is this really any measure of who I want to deal with ? Is there any better ways of "checking out" brokers available ? -
G/MAN Thanks this.
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It's not about special treatment or begging the government for help. The trucking business model is unique. When you hire a plumber or carpenter, you don't call a broker to arrange it. And although you may recieve an estimate, you do not know what it will really cost you until the job is done.
It is also due to the nature of our business of delivering shipments all over the country really puts truckers in a vulnerable position, making it difficult for us to collect payment compared to a landlord or some other type of business.
Furthermore, if all brokers paid on time we wouldn't be having this conversation, so don't point the finger at the truck driver !! This whole business model has been in constant change since the 50's and those that have benefited most are the consumers, shippers, and recievers. Saying that supporting one regulation means you support all regulation is false. I'm sure we all agree that murder should be illegal and enforceable. That is good, sensible regulation. And that's what we should want. Good, sensible, well-thought out regulation that works.Lilbit Thanks this. -
There are a number of businesses where there are intermediaries that don't require a bond. Having a bond in this business is offering a false sense of security. I don't offer open account terms to any broker who doesn't have at least a 95% credit score. I check out their authority and references as well. That is my responsibility as someone offering extended credit terms to a company or individual. If you want a business where there is NO risk, then you better not start any business. When you offer credit terms you are taking a risk. It is risk takers who have built this country. And most businesses have customers who don't pay within 30 days or whatever the agreed terms. That doesn't mean that having a bond will protect them. While there are some things unique to this industry, the basics are the same as with any business. It isn't any more difficult to collect money in trucking as it is with any other industry. If you have concerns then you could always factor your receivables with a non recourse factor and eat the extra fee. That takes the trucking company off the hook and keeps your cash flow going. When you offer credit terms you take a risk of not being paid. The type of business doesn't really matter. One reason some don't go into business is because they don't want to accept the risks. The higher the potential gains, the greater the risks. Those who are not prepared to accept the risks should remain a company driver or find a profession where you work for someone else and they accept the risks.
BigBadBill, LSAgentOZR and Lilbit Thank this.
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