What Freight Broker Bond Amount Do You Need?
What Are the FMCSA Requirements?
As of October 1st, 2013, the FMCSA requires all freight brokers and forwarders to get a $75,000 freight broker bond in order to get their license. The required bond amount was increased from $10,000 to $75,000 to discourage fly-by-night brokers from trying to enter the freight broker industry and aims to protect shippers and motor carriers from not getting paid according to their contracts. The large increase in the bond required of freight brokers means a higher cost, so be sure to check out these tips to cut your freight broker bond costs in half.
Stand Out From Your Competitors
The freight broker industry is incredibly competitive. Although it's not required by the FMCSA, highly qualified freight brokers have the option of getting an extra $25,000 in bond coverage to provide additional protection for their shippers and motor carriers. Why would freight brokers want to spend more money on getting more coverage that's not required?
It's simple: having additional coverage shows that you're an elite broker who wants to build trust with your shippers and brokers by providing additional protection. Also, the excess protection is often required by the larger companies such as US Foods or Tyson Foods, and will only work with freight brokers that have the extra coverage. Learn more about how you can stand out from the freight broker crowd.
Author: Eric Weisbrot
Eric is an industry expert that specializes in taking complex surety concepts and explaining them in terms that make sense to the general public. He also manages the JW Surety Bonds website and works with various partners to help further educate the public on suretyship using various mediums.
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