UPDATED -- Nearly 10% of the nation’s freight brokers no longer have their licenses following new federal regulations that took effect requiring a higher bonding amount, while another source says the number is even higher.
Some 2,000 brokers have been affected, according to DC Velocity, after the Federal Motor Carrier Safety Administration began the broker license revocation process just after the start of December. It is unclear how many brokers voluntarily surrendered their licenses versus how many had their authority revoked.
The number is even higher, according to one of the nation's largest surety bond sellers, JW Surety Bonds. In the first three days, about 3,800 broker authorities have been revoked.
"It is expected the number of authority revocations will only increase, as some industry professionals estimate that about half of the 21,000 plus freight brokers within the U.S. are still not $75,000 compliant," the company said on its webiste.
Legislation passed last year by Congress and signed into law, requires brokers to post a $75,000 surety bond to guarantee payment to motor carriers if the broker fails to make good. The previous bond amount had been $10,000.
According to one estimate there are more than 21,000 freight brokers in the U.S..
Enforcement of the higher broker bond amount took effect the first of October, but enforcement didn’t start until the first of December. A group of brokers opposed to the hike, The Association of Independent Property Brokers & Agents, lost a last minute court challenge to delay enforcement.
Those in favor of the higher bonding amount include another broker group, the Transportation Intermediaries Association, along with the trucking groups the Owner-Operator Independent Drivers Association and the American Trucking Associations.
More details are available from DC Velocity.
Update adds information from JW Surety.