Bond Fallout Could Mean One-Third Fewer Brokers in 2014
The FMCSA has revoked the operating authority of 8,180 brokers since Dec. 2, the date the federal agency began revoking authority from brokers without a $75,000 bond.
by Michele Greene, DAT
December 12, 2013
2 min to read
The FMCSA has revoked the operating authority of 8,180 brokers since Dec. 2, the date the federal agency began revoking authority from brokers without a $75,000 bond. That’s a whopping 38% of the 21,700 brokers that had operating authority at the beginning of the month.
The story is different at DAT. Even though the vast majority of brokers on the DAT network are small businesses, only a few have had their authority revoked and many of these will continue to operate as carriers without a brokerage. And despite the new bond requirement, load posting volume on DAT load boards is at an all-time high for this season.
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While the percentage of brokers losing authority is certainly high, the impact on the industry is likely to be less significant. It’s long been clear that a sizable chunk of brokers registered with the FMCSA were what you might call “casual” brokers. These are companies for whom brokerage was never a major source of income. The amount of freight moved by these brokers was only a small percentage of the overall freight moved nationwide each year. That said, it is regrettable that such a large number of small brokerages are leaving the industry and we hope they will come back reasonably soon.
At the same time that the industry is losing some brokers, new brokers are being added. Since Jan. 1 of this year, the FMCSA added about 2,000 brokers. Many of those are carriers who occasionally broker freight. MAP-21 requires that they, too, have freight broker operating authority and possess a $75,000 bond. The number of authorized brokerages in the U.S. peaked in March 2013 at a little shy of 22,000, but we are likely to end the year with fewer than 14,000.
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