Trucking companies are a critical component to successful commerce in the United States. Manufacturers and suppliers depend heavily on the trucking industry to move products from point A to point B in order to continue trade. According to a 2011 study published by American Transportation Research Inc., there are approximately 500,000 trucking companies throughout the United States. Of those 96% have 28 trucks or fewer, and 82% operate with less than 6 trucks. This is an industry of small, independent operators and carriers.
The carriers depend on the services of thousands of independent transportation or freight brokers whose job is to secure loads from suppliers for them. Brokers streamline the process by establishing relationships with shippers and the truckers, providing peace-of-mind to both. “We keep the shipments moving in a safe and reliable manner,” said Jennifer Boycourt, a broker with All Systems Go Transport, Inc in Barefoot Bay, FL and Stephens City, VA. “We make sure to screen our carriers to assure shippers that the trucking companies hauling the freight are reliable and utilizing the correct equipment for the load. We also screen the shippers to assure carriers are hauling for reputable companies. We as the broker assume the responsibility of paying the carriers and collecting payment from the shipper. The expense associated with hauling a load from Florida to California can create financial hardship for a small carrier or independent operator if there are delays in payment. Our service keeps the process running smoothly.”
Section 32918 of Map 21 requires the Federal Motor Carrier Safety Administration (FMCSA) to raise the bond requirement for freight brokers from the traditional $10,000 amount to at least $75,000. Under the new rule, small business owners must put down $75,000 in cash collateral, the same as international conglomerates, or otherwise secure credit-based bonding. If not, they will lose their operating licenses. This was scheduled to be enforced starting December 1st, 2013 so any transportation broker who has not complied with the new bond requirement may be operating against the law.
Many of these brokers are family businesses who will no longer be able to compete with big multinational brokers that can easily secure the $75,000 bond to stay in business. Others employ numerous agents, making this “jobs bill” a potential job killer for tens of thousands of Americans. James Lamb, president of the Association of Independent Property Brokers & Agents, says, “The new $75,000 bond requirement will force the overwhelming majority of these small companies out of business. With fewer competitors, big brokers will be able to dictate higher shipping costs. As the cost of shipping rises, consumers will see higher prices for just about everything sold.”
“This has been very difficult,” said Sandy Bent, owner of All Systems Go Transport. “We are a very small company that has been blessed with great clients and operators for the past 8 years, but taking our bond from $10,000 to $75,000 in one jump took a lot of creative resource gathering. Fortunately I was able to comply, but now with this additional requirement, I’m being forced to take a new look at how we operate. I must add new business to cover the added cost.”
All Systems Go Transport (ASGT) is one of many small family businesses this bill has affected. Ms. Bent added Terri Porter, a new broker to her Florida office to assist new suppliers that may have already lost their previous broker, but like the bond, it’s an added expense without the additional revenue. “We are doing what we must do to stay in business,” said Bent. “I know it’s the cost of doing business, but there are many good, reliable brokers out there that this is forcing out. It’s not the way I wanted to see my business grow, but hopefully there will be enough to off-set the added cost.”
If you are supplier looking for a new broker because of Map 21 or an operator whose broker has been forced out of business, fortunately there are some small companies like ASGT that are surviving this legislation. Make sure when changing brokers that the new broker has met the bond requirements and has the expertise necessary to keep the loads safely moving.
For additional information about All Systems Go Transport, Inc or Map 21 do not hesitate to contact ASGT at 866-581-2748 or visit their website www.allsystemsgotransport.com.
Distributed by Shenandoah Business Solutions
Company Name: All Systems Go Transport, Inc
Contact Person: Jennifer Boycourt
Address:303 Berwick Lane
City: Stephens City
Country: United States