Page 33 - ATR 2 2014 web

To broker or Not to broker

Food haulers, intermodal face brunt of increased bond challenges

By Steve Brawner
Contributing Writer

Let’s say your carrier firm is expect-
ing to haul 12 truckloads, but when it’s
time to actually pick it up, there are 15
truckloads. For whatever reason, the
haul cannot wait, but you don’t have
15 trucks. In the past, you’ve called on
your fellow trucking association mem-
ber 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.
Under the terms of the MAP-21
surface transportation bill, that activ- requires FMCSA to review the sufficien- to $75,000, the carriers would be
ity is now considered to be brokering cy of the bond amount every five years. required to obtain bonding authority.
and requires a $75,000 bond. If a motor The Transportation Intermediaries But some trucking association offi-
carrier isn’t paid, it can make a claim Association (TIA), which represents cials say they thought the provision
against that bond. the brokerage industry, points out had been removed from the bill. Now
The provision affects only the prac- that the provision was part of a com- some trucking companies are having to
tice known as “subhauling” – when promise worked out over four years change the way they have done business
a carrier transports freight across an of negotiations that included the for decades.
entire journey. Bonding authority is full participation of the American The provision especially affects
not required when carriers engage in Trucking Associations (ATA) and the two groups of haulers – those that
“interlining,” where a carrier might Owner-Operator Independent Drivers haul food, and those that haul goods
carry a load part of the way for another. Association (OOIDA). Carriers and the from ports. In both cases, goods must
Interlining is a common practice in broker industry agreed that raising the be hauled immediately, and carriers
less-than-truckload hauling, where a bond from $10,000 to $75,000 would must be flexible. Not surprisingly, the
larger carrier might contract with a protect legitimate companies from fly- American Trucking Associations’ two
smaller, regional carrier for the last leg. by-night operations that didn’t pay. conferences representing those groups,
In some cases, one carrier can carry a The negotiations originally led to a the Agricultural and Food Transporters
load to another carrier’s lot. However, $100,000 bond amount for brokers that Conference and the Intermodal Motor
that won’t always make sense, particu- was included in the Fighting Fraud in Carriers Conference, are the most out-
larly for short hauls. Transportation Act of 2011, which was spoken in their opposition to a provi-
Under the old law, brokers were never passed into law. It was lowered sion their parent organization, the ATA,
required to maintain a $10,000 bond to $75,000 and included in MAP-21. negotiated.
or trust fund agreement, while brokers The ATA’s Policy Committee and the Jon Samson, head of the
of household goods were required to Executive Committee both voted to Agricultural and Food Transporters
maintain a $25,000 bond. Now all bro- endorse the proposal.
kers must post a $75,000 bond. MAP-21 In return for raising the bond 

aRkaNSaS tRuckiNg RepoRt | issue 2 2014 33