Making sense of the broker bond

Lots of talk lately about the fallout from the FMCSA revoking the operating authority of 7,545 load brokers who failed to put up the $75,000 surety bond required under MAP-21. That’s 35% of the 21,700 brokers that had operating authority at the beginning of the month. 

Michele Greene of DAT adds good perspective:

While the percentage of brokers losing authority seems high, the actual effect on the industry is likely to be less significant. It’s long been clear that a sizable chunk of brokers registered with the FMCSA were what you might call “casual” brokers. These are companies for whom brokerage was never a major source of income. The amount of freight moved by these brokers was only a small percentage of the overall freight moved nationwide each year. That said, it is regrettable that such a large number of small brokerages are leaving the industry and we hope they will come back reasonably soon.

She adds that fewer than 4% of brokers on the DAT network have had their authority revoked, and many of these will continue to operate as carriers without a brokerage. 

Greene says that while the industry is losing brokers, new ones are being added—roughly 2,000 since Jan. 1, 2013. Many of these are carriers who occasionally broker freight. MAP-21 requires that they, too, have freight broker operating authority and possess a $75,000 bond.