[Copperhead]

Pure and simple, it is just a ploy to knock out the competition, while giving the appearance of being beneficial.

[GMAN]

You are correct, copperhead, about it being about knocking out the competition. Yet, there are many owner operators who are touting the increased bond. They seem to expect that it will protect them from their lack of business accumen. I don't mean to knock anyone who has lost money by doing business with a bad broker, but if you take the time to check out brokers or shippers before taking a load then you are not very likely to get taken. I have spoken to many who probably have never even thought about checking credit of a broker before doing business with them. I wonder what they think those references are for that they usually include with their contracts? I have really been surprised that OOIDA has become so involved. It is my understanding that they have had a number of members who have lost money on bad brokers. From my standpoint, it isn't the bad brokers but the owner operator who took the load without checking credit who is to blame. No matter how well you check references or credit you can still lose money, but it will be much rarer.

[dle]

It all goes back to what the responsibilities are of all the parties.

The paying customer is supposed to check the broker to see if they are properly licensed - they have their authorization and bond amount. They should also check on what their credit status is.

The broker is supposed to check on the customer's credit status. Then once the carrier is found then the broker has to investigate whether or not carrier is properly licensed as well as their credit status.

The carrier is supposed to check on the broker's authorization and credit status.

Checking on the credit status involves checking all of the references, checking the other services that provide that information.

Couple of monkey wrenches - Double Brokering, Checking to see if their authorities are genuine, checking to see if their insurance information is genuine.

I wonder how many people know how to check to see if a broker's authority is valid? I've seen several brokerages continue to do their brokering even though they have been revoked.

[GMAN]

You don't need a bond to file against to get your money from a broker who hasn't paid you. You can go through small claims court, get a judgment and then go get your money. The $100,000 bond must be collateralized. That will eliminate many smaller brokers from the industry. That is part of the problem that I have with this bill. Most brokers will pay those with whom they do business. This bill punishes all brokers, regardless of their past history. I wonder how many small brokers have $100,000 sitting around that they can put up for collateral for this type of bond? Underwriters want to see cash that they can go after should the broker default. We all want to be paid for our effort. I can't help but wonder if this could escalate to the point where we only have a handful of mega brokers. As someone else mentioned, the way the bill is written, the bond can be increased to eliminate even more brokers and without congressional approval. I see this as a very dangerous piece of legislation where competitors can get rid of their competition by buying congress. This really does little to further protect mismanaged carriers.

[dle]

GMAN, out of curiousity are you aware of any way to get numbers on how many broker's bonds have had claims against them, how much and how frequently?

[GMAN]

Originally Posted by dle

GMAN, out of curiousity are you aware of any way to get numbers on how many broker's bonds have had claims against them, how much and how frequently?

I don't know if those figures are available. I believe that you can see if an individual broker has had his bond filed against, but I don't know if figures are available for all brokers as a group. OOIDA may have some numbers, but those would probably be for those whom members have filed against. Their trade association might have figures, but they may not be willing to share the numbers with you. My guess would be that there are few who have ever had their bond filed on. I think that if it were widespread then you would have heard much more about it

[dle]

Licensing & Insurance Carrier Search is the website so you can check the legal status of a brokerage.

I was hoping it would show something about claims, but it doesn't.