Thursday, March 13, 2014

The $75,000 Bond is No Cure-All

The $75,000 Bond is No Cure-All
Henry E. Seaton, Esq.

MAP-21 requires any party which arranges for origin to destination shipments to hold either broker or freight forwarder authority and to post a $75,000 bond.  The new Act does not apply to exempt traffic, to shipments moving in intrastate commerce, or to joint line service in which a motor carrier either picks up or delivers the shipment in its own equipment.

The legislation was aimed at the transactional truckload market in which the majority of the intermediary abuse occurs.  Brokers and forwarders default on their payment obligations to carriers for two reasons: