Network FOB - Two Harbors, MN

The man, it's one of those things where a person can rightfully argue about the merits or usefulness of any law or regulation, but there is no arguement that this law/regulation exists. The case was closed on this months and months ago. Even the Canadian Trucking Association advised their members who engaged in freight brokering, that they needed a separate brokers license and surety bond. A healthy discussion about it's value or importance should always be encouraged, but let's move on about the fact that it is here and applies to any entity, regardless of where you hang your hat. That part of the discussion is past.
 
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Loaders, totally agree with you. I was only pointing out the rationale that I would have with it, trying to look at it from a buyer's standpoint. So even if it wasn't the law ... I'd still do it unless my business model was to market only to local companies who don't have multinational presence. Why would you buy a Chevy when a Cadillac is the same price?
 
Exactly. It is always better to be able to answer the questions of a potential new customer with "yes we do", than "oh, we don't have that". We regard the whole licensing, bond, insurance, trust account thing as marketing tools, that separate our firm from others in the industry. Yes, from a carrier's perspective, 75K is a drop in the bucket when a firm declares bankruptcy or defaults on an invoice, but still better than a completely empty bucket.
 
Loader to say 75K is a drop in the bucket for a carrier is a little far fetched, in today market place with the different regulations placed on the carrier and the cost associated with them, for example Electronic log books, it is the carries responsibility to purchase, install and maintain them. When it becomes mandatory a year December I believe a lot of the smaller carriers will fall off with the expense.
A 75K bond is an insurance policy of $1300 annually, I know because I have one. If basement brokers want to play in the big pool play by the big pool rules!
 
FreightFax said:
Loader to say 75K is a drop in the bucket for a carrier is a little far fetched, in today market place with the different regulations placed on the carrier and the cost associated with them, for example Electronic log books, it is the carries responsibility to purchase, install and maintain them. When it becomes mandatory a year December I believe a lot of the smaller carriers will fall off with the expense.
A 75K bond is an insurance policy of $1300 annually, I know because I have one. If basement brokers want to play in the big pool play by the big pool rules!
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75 K is a drop in the bucket to a carrier as an insurance policy from a broker going broke. Any broker that is not working in his basement would move that kind of money a week through his books.
 
That is the point I was making Rob. Thanks for clarifying it. Also, freightFax, please let the rest of us know where you are obtaining your 75K surety bond for $1300.00 annually. From what I hear and from what we pay, the average premium seems to be closer to 3000-3500.
 
Ouch... here we go against basement brokers again. I'm one of those and happen to have the bond. Also made the Profit 500 a couple of times over the years. The basement is often better than the seedy digs some people lease out in strip malls. Some brokers have swanky offices I guess.. but I haven't seen that too much in this industry.
 
I think it isn't where you conduct your business that's important, but how you conduct your business! Too be honest, I am not overly proud of the office space we rent, but we don't often entertain our clients here.
 
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It's a matter of being $75K capitalized. If you're not capitalized, you are uninsurable to the bond companies ... the whole idea is if that a person is willing to put $75K into a business they won't be so quick to walk away from it. Just because a broker may do over $75K in business per week it doesn't mean it has capital.
 
theman - I guess you are a little confused on this, it is not a capital out lay, it is an insurance policy
Basically insuring your receivables so the carrier get paid at the end of the day.
 
This is just a humble suggestion...maybe we should move this discussion to another thread. The reason being that now any information about Network FOB-Two Harbors MN is so far down the thread that many won't take the time to read it and find out about the actual warnings about them. It sort of turned out to be a thread about the bond and that is great for Network FOB...no one else will find out about them... :)
 
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Yes ... but the premium is not the same for everyone. If you are a high risk to the insurer, the premium reflects it. There are large companies out there running a $500K bond out there as a measure of goodwill to the carrier base at large but they're not paying $20K for it. For well capitalized player, the mill rate is low enough that it's not a very big expense at all. That's why the OOIDA stepped in to offer an option on this a while ago.
 
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The bond is a mechanism that transfers some of the broker's liabilities onto the broker's principal owner's i.e. the signatories to the bond. If something happens to my business I can't simply fold it up and walk away. The bond makes me personally liable to the tune of 75K US.
 
It is not just an " insurance policy". You have to show to the bonding company that you have the financial wherewithal, to support their risk of supplying the bond in the first place. This can include such things as providing them your company's financial statements, and if that isn't enough to set their minds at ease, the principals of the brokerage firm must supply personal financial statements. So, no, theman isn't the one a little confused about this.
 
That's right.. not out of pocket. However, should my business go south I would quickly find myself short 75K as the bonding outfit comes after me and my personal guarantee. And some bonding companies require 100% collateralization.. so people who are asset light or have a sketchy credit history, they would be required to come up with some or all of the 75K up front.
 
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