A new regulation set by the Department of Defense (DoD) via the Military Surface Deployment and Distribution Command (SDDC) requires freight carriers transporting military freight to post a performance bond. The “open enrollment” window is only from 1/9/2017 – 2/28/2017. Please see the information below taken directly from the SDDC regulations guide below:
NOTICE: SDDC will conduct a domestic motor carrier registration “open season” effective 09 Jan 17 thru 28 Feb 17. This will affect domestic motor Transportation Service Providers (TSPs) only. TSPs will be required to be registered in the Federal Motor Carrier Safety Administration and have valid DOT authority for 3 consecutive years (without a break) prior to the Open Season. New TSPs will notify SDDC of small business status via the Freight Carrier Registration Program (FCRP) during registration. Registration for other modes will continue to be accepted (barge, ocean, pipeline, and international carriers).
The word “carrier” used in these instructions refers to all Transportation Service Providers (TSPs), including Brokers, Logistic Companies, and Freight Forwarders. Carriers and individuals may not conduct business with the government if they are listed on the Excluded Parties List (EPLS). The list is published by the General Services Administration (GSA) and contains the names of Contractors debarred, suspended, proposed for debarment, or declared ineligible by any agency of the Federal Government. The list can be accessed at https://www.epls.gov. Newly registered TSPs will not be approved if they are affiliated with a TSP who is currently in a disqualified status.
The Performance Bond secures performance and fulfillment of carrier obligations to deliver
DOD freight. It will cover any instance where a carrier cannot or will not deliver DOD freight
tendered to them. This includes default, abandoned shipments, and bankruptcy by the carrier.
The bond will not be utilized for operational problems such as late pickup or delivery, excessive
transit times, refusals, no shows, improper/inadequate equipment, payment of subcontractors,
or claims for lost or damaged cargo. Local drayage, commercial zone, barge, rail, sealift and
pipeline carriers are exempt from the Performance Bond requirements.
The amount of the Performance Bond is based on the size of the company and the number of states intended to service. Large companies may select one (1) state for bond amount of $25,000; two (2) to three (3) states for bond amount of $50,000; four (4) or more states for bond amount of $100,000.
Carriers registered with the Small Business Administration (SBA), http://www.sba.gov, or http://www.ccr.gov, may select up to three (3) states with a Performance Bond of $25,000, up to10 states with a Performance Bond of $50,000 and 11 or more states for $100,000. To utilize these bond amounts, when submitting your bond information, you must provide supporting 5 documentation that you are registered with the SBA. When registering, ensure you select the states for movement in accordance with the appropriate Performance Bond amounts. Movements must begin and end in one of the selected states.
Carriers that have conducted business in their own name with DOD for 3 or more years will be required to submit a Performance Bond in the amount of 2.5% of their total DOD revenue for the previous 12 months, not to exceed $100,000 and not less than $25,000.
Bulk fuel carriers are only required to submit a $25,000 Performance Bond.
The Performance Bond amount is set at $100,000 for Surface Freight Forwarders, Shipper Agents, Brokers, and Air Freight Forwarders due to the volume of traffic handled by these modes.
If you’re in need of the performance bond mentioned above, you’re in luck. Our company handles them and you can apply for it on our website.
Get Your DOD Performance Bond Now!]]>
JW Surety Bonds will close at 12:00 p.m. EST Friday, December 30th and will remain closed through Monday, January 2nd to observe the New Year’s Day holiday. We will reopen Tuesday, January 3rd at 9:00 a.m. EST.
Happy New Year! We wish you a healthy and prosperous 2017!]]>
Be careful with home office deductions. Excessive or unwarranted deductions can raise red flags. In addition, large deductions in proportion to your income can raise the ire of the IRS as well.
For example, if you earned $50,000 as a Freight-Broker (operating from home), home-office related deductions totaling $30,000 will raise more than a few eyebrows. Trying to write off the value of a new bedroom set as office equipment could also draw unwanted attention.
Deduct only items that were used in the course of your business. Okay, that said, consider the following to make sure you can avoid the nightmares of the home office deductions that may trigger an audit..
How Can I Make My Home Business Space more Audit-proof?
If the IRS decides to visit your home-based business, and they may very well decide to do just that for a Freight-Broker. Maybe they think you are low hanging fruit… easy pickings.
The IRS agent will be looking to see if you comply with the “regular and exclusive” use test for your home office, as your principal place of business. That is, you must use your office regularly for business and your use of the area must be exclusive to the business. You can do nothing else in that area and you can’t have anything personal there.
How serious does the IRS take the “exclusive” use test… very seriously.
How about personal photos, wall décor, things of a personal nature?
Such things sound innocent enough, but be careful. If the decoration is a putting green or a dart board, it can mean that you are doing something personal in your office space. You can argue that you might be allowed to have a putting green or dart board in a regular corporate office but it is viewed differently in a home office. Any personal use of the space even for just a few minutes during a day or week disqualifies the entire deduction.
This next one might cause you to blow a gasket. The IRS may ask to review the contents of your filing cabinets. Why on earth would that be important? Its personal. If you have business files mixed in with personal files in any storage facility could be a problem. The safe thing to do is to move personal files to your personal part of the house. The law states that there can be no other use of the declared business space. Same rule goes for books, business books are fine; just nothing personal that does not relate specifically to business process and management.
This one will blow a few valuable brain cells, watch how you use your printer. The safe thing to do is never print anything kids homework or personal items on the printer located in the home office area. Be safe, get another printer. In order to deduct 100% of the printer, it has to be used 100% of the time for business.
How about entertainment devices in the home office area?
After all, its nice to be able to keep up with the news of the day and maybe even watch a rerun of your favorite sports team. Seems reasonable and fair, right? Not so clear-cut. Here’s the skinny…under a 1994 Tax Court case, a home office deduction was denied for failure to provide evidence that an office containing a television and a VCR had no personal use. Ask yourself… How are you going to prove that you don’t watch an occasional TV show or movie on this equipment? Don’t risk this convenience which probably in no way impedes your business performance, but will certainly kill your home office deduction.
When the work day is done, lock the door to your home office! What? You will be denied the home office deduction for that portion of your residence if the space is used after hours for any other purpose. While your residence is, in fact, the principal place of your freight-brokerage business, any space or portion used after hours for any personal use by you or anyone in your family after business hours and presumably on weekends and holidays kills the home office deduction. Ouch! Wait… it gets even worse.
The Family pet, your beloved hunting dog! Dogs sleeping in your home office space at night would disqualify the home office deduction. No personal use; same thing as allowing a kid to sleep there at night. A kid, a dog, uncle Harry… it’s all personal.
Gotta love the folks at the IRS. As you begin your business or just need to conduct your own personal-use audit before the “big guys” show up, consider the aforementioned advice and save yourself the pain of losing the valuable home-office deduction for your brokerage business.]]>
Are you trying to make a go of being a Freight-Broker on your own, no help, no network? Good luck with that approach. You need a network of colleagues to share information and leverage one another’s skills and contacts. You might consider your network… your Broker buddies.
A broker buddy is basically an agreement among similar home-based brokers that you should not work alone in the beginning or even if you’re a seasoned professional with a few years under your belt. Why? Being a successful broker is not easy, but for those who try to do it completely alone, you will never make it.
Moving freight is about networking with others similar to your business setup. A person who wants to move freight and a lot of it, then you must have some freight broker buddy’s working with you. The more connections you have the more easily it is to move freight and make a fair profit. You should spend as much time as possible networking daily with three or four compatible brokers, growing your freight broker’s black book. That list of colleagues becomes your lifeline to planning future business and being prepared to take on big opportunities.
The successful freight broker is not only a logistics expert but a service provider who moves valuable goods all over the country and the world. You may want to utilize a logistical assistant who can help nurture the next load, and the next. They can help develop new clients and prepare for long-term relationships for repeating business. You want consecutive loads on a consistent basis. The right people in your network can move anything, anywhere. This would not be possible without building a network of mutual benefit and reliability.
Making a living brokering freight starts with building your network and sharing what you can and can’t do. If you want more information on how to get started, I can send you a Freight-Broker Starter Kit. The information guides you through the basics of getting started in the Brokerage business. Remember, a solid foundation in the beginning is key to your success as a freight-broker.
If you’d like to get in touch with the author, please connect on LinkedIn or send him an email.]]>
JW Surety Bonds will be closing at noon on Friday, September 2, 2016 and will remain closed through Monday, September 5, 2016 to observe Labor Day. We will reopen Tuesday, September 6, 2016 at 9:00 a.m. EST.
Have a safe and happy holiday weekend!]]>
JW Surety Bonds will be closing at noon on Friday, July 1, 2016 and will remain closed through Monday, July 4, 2016 to observe Independence Day. We will reopen Tuesday, July 5, 2016 at 9:00 a.m. EST.
Have a safe and happy holiday weekend!]]>