aged the operational flexibility of many trucking companies,” he said. Nancy O’Liddy, director of government
affairs for the Transportation Intermediaries Association, says the provi- sion was part of a compromise agreed upon by the American Trucking Associations, OOIDA, and the TIA. The individual con- ferences now complaining about it are “a little late to the game,” she said. The purpose of the bond increase was to
reduce fraud, which she said occurs not just between brokers and carriers but also between carriers and carriers. In fact, the TIA publishes a 58-page document that instructs its members how to select a carri- er properly. O’Liddy said that the brokerage industry
is far more than salespeople with tele- phones. Sixty (60) percent of TIA’s mem- bership is asset-based, and was so before the passage of the MAP-21 provision. Many major carriers have logistics companies that operate with carrier authority. Brokers
operate on tight margins and have costs like other businesses, such as paying for insurance. “We feel without the brokerage industry, most of the owner-operators would have no freight to move,” O’Liddy said. “That’s 100 percent our market, which is why we care that they get paid, and which is why we agreed to the language.” Sean McNally, ATA spokesman, con-
firmed that the ATA had supported the compromise and is staying out of the cur- rent controversy. “OOIDA and TIA had been in talks for
some time to enact legislation that increased the bond amount,” McNally said. “ATA supported an increase in the bond amount and negotiated some changes to the legislative language to continue to allow interlining. The legislative language was a compromise that ATA supported. However, there are a number of state trucking associations and two ATA confer- ences that object to the prohibition on motor carriers subcontracting to other
motor carriers without having broker authority. Those entities are pursuing a fix, and ATA is neither opposing nor support- ing their efforts.” Saylor, the partner with the Scopelitis
legal firm, said the change hasn’t seemed to have had too big of an effect on his clients. Many of which already have broker author- ity, and most of those that don’t have not sought it. He said there’s a lot of bad infor- mation being spread about the rule, such as the incorrect assertion by some that a car- rier must form two companies: one to carry freight and another to broker it, though such a move might be advantageous. FMCSA has not been enforcing the rule,
but Saylor hasn’t heard of any widespread disobedience. Naturally, he’s advising his clients to purchase the bond rather than break the law. The penalty for performing brokerage services without the proper authority is $10,000 per violation, and if the company doesn’t pay, the officers and principals are liable. BTW
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