BOND, BROKER BOND Food haulers, intermodal face brunt of increased bond challenges
BY STEVE BRAWNER Contributing Writer
& LOUIS CAMPION Executive Editor
Let’s say your company is expecting to
haul 12 truckloads, but when it’s time to actually pick it up, there are 15 truckloads. The haul cannot wait, but you don’t have 15 trucks. In the past, you’ve called on your fel- low trucking association member to subhaul the other three loads. Maybe you’ll pay him, or maybe you’ll just owe him a favor. That’s called an “interchange of convenience.” It’s not as convenient anymore.
8 BEHIND THE WHEEL ~ Q3 Fall 2014
Under the terms of the MAP-21 surface
transportation bill, that activity is now considered to be brokering and requires a $75,000 bond. If a motor carrier isn’t paid, it can make a claim against that bond. The provision affects only the practice
known as “subhauling” – when a carrier transports freight across an entire journey. Bonding authority is not required when carriers engage in “interlining,” where a carrier might carry a load part of the way for another. Interlining is a common prac- tice in less-than-truckload hauling, where a larger carrier might contract with a small- er, regional carrier for the last leg. In some
cases, one carrier can carry a load to anoth- er carrier’s lot. However, that won’t always make sense, particularly for short hauls. Under the old law, brokers were required
to maintain a $10,000 bond or trust fund agreement, while brokers of household goods were required to maintain a $25,000 bond. Now all brokers must post a $75,000 bond. MAP-21 requires FMCSA to review the sufficiency of the bond amount every five years. The Transportation Intermediaries
Association (TIA), which represents the brokerage industry, points out that the pro- vision was part of a compromise worked
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