Compensate carriers
FMCSA has published a ruling that outlines requirements for brokers to ensure carriers are compensate. The agency has issued a final rule to ensure brokers have the money necessary to compensate carriers. Brokers and freight forwarders must maintain at least $75,000 in readily available assets for financial security.
This is in case a carrier claims that it has not received payment for services rendered. If a broker or freight forwarder’s available financial security falls below $75,000 and is not replenished within seven days after notice, FMCSA will suspend its operating authority.
A trust fund, federally insured letter of credit, or treasury bond may be used if it can be liquidated within seven days. If the broker or freight forwarder cures the default, and the surety company or financial institution reinstates the bond or trust or issues a new one, FMCSA will lift the suspension.
Financial institutions and surety providers acting as broker trustees must notify FMCSA within two business days. If the security falls below $75,000 or determines that it will inevitably be due to submitted claims. Trust companies must notify FMCSA to improve enforcement.
3PLs and brokers are in the midst of a fraud epidemic, and a significant aspect of that fraudulent activity centers around trust fund providers and fraudulent entities in the marketplace. This is a step in the right direction to enhance oversight of broker financial responsibilities as we continue to work with partners to fight for increased broker transparency and the elimination of broker fraud.
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