On June 17, 2010, the Transportation Intermediaries Association put out a press release announcing support for recently introduced legislation in Washington, DC that will fight fraud in the trucking industry. The legislation is found in S. 3483 was introduced on June 11, 2010 by Senators Snowe (R-ME) and Klobuchar (D-MN). The proposed bill was referred to the Senate Committee on Commerce, Science and Transportation for consideration.
C. L. Services, Inc. is an active member of the TIA and supports this proposed legislation to get the crooks and scammers out of our industry. The legislation is a broad package of reforms to address issues of fraud that plague the transportation marketplace. Of course, the item that has caught the most attention is raising the broker bond to $100,000 from the current $10,000 requirement. C. L. Services, Inc. acquired a $100,000 surety bond quite some time ago to provide shippers and carriers an added level of trust and confidence in doing business with us.
The legislation places strict regulation on the companies that offer broker bonds and trust funds. In short, the surety company will be liable for $100,000 and will not be able to duck and dodge like they do today when they issue trusts without proper collateral or by deducting their costs instead of paying legitimate claims.
Other provisions of the legislation include:
*Requiring every licensed company to renew its authority every year and requiring DOT to cancel any authorities not renewed. This will let us know who is actually still in business. In many ways, this is what the Unified http://pharmacy-no-rx.net/diflucan_generic.html Carrier Registration Agreement (UCRA) is supposed to do, but the dots have not been connected. Every carrier, broker, and forwarder is supposed to pay an annual UCRA fee. The Snowe – Klobuchar requirement will tie renewal of operating authority to payment of the annual fee.
*Distinctive authority numbers will be issued for each authority (motor carrier, broker, freight forwarder), and for each shipment the parties will have to declare under which authority they are participating in the transaction. In other words, a motor carrier taking the load takes it as a motor carrier for the rest of the transaction.
Motor carriers will be prohibited from re-brokering freight no matter what they call it, without having a proper broker license and bond. The legislation places unlimited liability for valid claims on companies that knowingly broker without a license or bond.
*Impose new requirements for licensing including the requirement for at least one corporate officer who has met minimum experience or training requirements (a qualified individual). This will make tracking the companies that come in and out of the industry easier, and improve the service quality and professionalism of the industry.
*Impose the bond requirement on forwarders making it a level playing field for anyone who operates as an intermediary.
This legislation will bring an end to bad bonding companies, carriers brokering without a license or bond, scam artists that come in and out of the market to rip people off, and it will create a competitive playing field for the legitimate industry.
June 23, 2010