Pentagon Logistics

loaders said:
So there does seem to be value in dealing with a properly registered and licensed freight broker. Of course, dealing with a properly run, well financed broker who doesn’t run their operation into the ground, is even better. Good news for you Johnny Chicken!
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Loaders can I ask a bit of a personal question. How many weeks work would that 75k bond cover if you where to be a dick and take the money and run? 3-5 days is my guess. Yes the bond works but usually at pennies on the dollar so a loss. Needs to be a million. It is not a good system sorry it has no teeth.
 
You're right Rob, for a sizeable operation this could represent a few days or a week worth of business. Remember this bond used to be $10k? $75k is too low, but it's better than nothing and it's also better than the $10k it used to be!

Happy Friday!
Mike
 
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Fr8Guru said:
I am far from a "big shot" but 75k wouldn't even cover a day from my book alone... It might cover an hour for the entire company here.
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Yep we are a 13 truck fleet and 75k would not cover off a week around here either. But I am supposed to feel all warm and fuzzy knowing the broker has 75k back up LMAO.. If brokers trully wanted to better their industry they would be onboard for a million or more bond = basement Betty that double brokers has another hurdle of entry maybe.
 
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I remember when I worked at Hub they took a leadership role in this, and to set an example they put up a $500K bond voluntarily. Granted, that is probably not much more than an hour in their minds on the truck brokerage side I would think.
 
Rob said:
Loaders can I ask a bit of a personal question. How many weeks work would that 75k bond cover if you where to be a dick and take the money and run? 3-5 days is my guess. Yes the bond works but usually at pennies on the dollar so a loss. Needs to be a million. It is not a good system sorry it has no teeth.
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Probably even less. No question, a higher limit would more accurately reflect the potential loss incurred if a broker goes bust. However, from what we read here on Inside Transport, most carriers who have claimed against a brokers surety bond, have been made whole, even with a 75k limit. I wonder as well, if the many carries who sell off their "excess freight" would bite the bullet and purchase a 1 million dollar bond? Or would they continue as they do now, and ignore the current regulations pertaining to cross border freight brokerage? More importantly, a level playing field is required.
 
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loaders said:
More importantly, a level playing field is required.
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Term used by the big guys too push crap regulation down the throat and try and curtail smaller operations. Carriers and brokers are never a level playing field we are different operations totally and too try and compare is ludicrous. Carriers overhead adding the insurance for a 1 mil bond just another added cost 1million bond on crook finks and mahonies will IMHO stop them from entry. Brokers have little to no overhead compared to a carrier. Also have way less capital investment hence then need for a bond with teeth to protect carriers Your part about 75k making carrier whole is also a silly post as one guy says he got paid how many hundreds on this site have been screwed over? I will answer for you not one of us carriers on here has not written off a bad debt at one time or another because the bond was empty withing hours of the broker going broke. Getting your panties in a wad over the fact a carrier with millions tied up in equipment etc does not have a 75 bond too sell off excess freight. Rate transparency is a requirement if asked as well want to follow that rule? Picking and choosing too suit a narrative sounds similar to what the news has to say.
 
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Rob said:
Term used by the big guys too push crap regulation down the throat and try and curtail smaller operations. Carriers and brokers are never a level playing field we are different operations totally and too try and compare is ludicrous. Carriers overhead adding the insurance for a 1 mil bond just another added cost 1million bond on crook finks and mahonies will IMHO stop them from entry. Brokers have little to no overhead compared to a carrier. Also have way less capital investment hence then need for a bond with teeth to protect carriers Your part about 75k making carrier whole is also a silly post as one guy says he got paid how many hundreds on this site have been screwed over? I will answer for you not one of us carriers on here has not written off a bad debt at one time or another because the bond was empty withing hours of the broker going broke. Getting your panties in a wad over the fact a carrier with millions tied up in equipment etc does not have a 75 bond too sell off excess freight. Rate transparency is a requirement if asked as well want to follow that rule? Picking and choosing too suit a narrative sounds similar to what the news has to say.
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I think the most important thing would be enforcement. Is 75K enough? Not near enough for most brokers as it was pointed out. The one nice thing about a broker having it is that someone has confirmed that, at the time of acquiring the bond, they were good to cover the risk for $75K. It's a low bar but one that has to be overcome.
My wish?
That Canada has the same requirement.
That carriers demand each and every broker have it.
That the FMCSA take enforcement on Canadians who broker without it.
That the FMCSA solidify the wording so that every piece of freight that is negotiated to be hauled by someone other than the original entity who negotiated it from the Beneficial Freight Owner(BFO) considers the freight to be brokered. (ie get rid of the interlining).

The rule was put in place to protect carriers, ensure payment, and shield BFO's from a carrier coming back on the BFO for payment (much like our Bill of Lading Act). In the market today, where freight is hard to come by, carriers are lowering their standards to get freight. Sometimes it's so low that there isn't a chance in hell the carrier was getting paid even before the freight was picked up. This website is proof that most carriers don't even look at the address of someone brokering freight. They get into a 'business relationship' with an email address and that's it. I'm all for making it harder to get into this business. Right now all it takes is a gmail address and a laptop to make up some crappy load confirmation sheet.

The tide will turn - it always does. When it does good carriers will request or demand that the broker have a bond or the freight doesn't move leaving the brokers who don't have the capabilities to get a bond in the dust.

Back to the OP. Pentagon had a bond and some people who understood how it works was able to get their money after a bit of work. It's not the worst thing in the world.
 
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That is exactly correct Jim L. A freight broker, who at least went to the trouble of registering with FMCSA and obtaining the required 75K, has some skin in the game and is serious about his operation. The level playing field I referred to is no different than carriers wanting all carriers to play by the same rules, no Driver Inc for example. A carrier who wants to be a “broker for the day” and sell of some extra freight is doing the same job that full time freight brokers do and as such, should play by the same rules and have the same licenses and registration. If a carrier gets burned by an unlicensed freight broker operating without a surety bond, does the carrier not share part of the blame for failing to properly vet his customer? Sure, requiring the surety bond to be 1 million would eliminate some brokers from the legal marketplace. However the illegally operating brokerages would still exist and would still be victimizing carriers the same as they are today.
 
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