Compliance with US Rules for Load Brokers

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loaders

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The NTBA will be presenting a dinner meeting on Wednesday April 16th. The topic for this meeting is Compliance with US Rules for Load Brokers. The association recently commissioned a US law firm to review the current regulations and how they affect Canadian domiciled load brokers. A lawyer from this law firm will make a presentation and be available to answer questions. For those who are unsure of what their obligations are under US regulations, this event should be able to answer your questions and concerns. As the association is expecting a large turnout for this event, the location has yet to be determined. Further information and a registration form can be found on the association website, www.ntba-brokers.com. The information available to both carriers and brokers at this meeting should prove to be very valuable. Sounds like a must attend meeting to me.
 
For all members of this forum that broker freight, regardless if you are a stand alone broker, or a carrier that brokers their excess freight, this upcoming meeting will answer all of your questions regarding the new Surety Bond regulations for freight brokering to or from the US. Further information and a registration form can be found on the NTBA website, www.ntba_brokers.com. Here is a chance to get your questions answered and to find out if you are in compliance with the new regulations. I know we have already been asked by some of our US customers if we have the new surety bond limit of 75K (we do), and I would not be surprised if there will be more enquiries in the coming months. Definitely a meeting worth attending.
 
I understand that this is being held @ Le Treport Convention Centre. 1075 Queensway East, Mississauga ON. I received the updated invite yesterday 5:07PM.

I'll see you there!

Keep well,
Mike
 
I was just thinking about this compliance issue a few minutes ago..... We are a carrier but many of the Canadian load brokers we have dealt with in the past, as well as presently, do not have the new broker bond. In fact, some do not even have an MC number even though they ship freight across the border. One broker who does cross-border shipments told me that "since they are a Canadian broker, they do not need an MC number or bond." Additionally, many carriers who "broker out" their freight do not have the new bond either.
I was wondering what is actually happening here - Is it simply confusion about the requirements or are some brokers trying to get away with not complying at all with the new rules hoping they never get caught?
 
You should attend the April 16th NTBA function me thinks.

If not, wait until the 17th and I'm sure there will be enough posts here to answer any question people have.

Keep well,
Mike
 
Salma, it is probably a bit of both. Yes there has been some confusion regarding the "new" bond regulations, but that confusion is most likely the result of the new 75K limit, a dramatic increase from the previous 10K. There is no question or "gray" area regarding the need for a freight broker to be licensed if he/she arranges for freight movements that cross the border in either direction. If a broker tells you otherwise, they are trying to avoid compliance. Your place of business doesn't matter. A carrier who deals with an unlicensed broker is taking on unnecessary risk and has limited recourse in recovering his money if the broker goes bankrupt. A carrier who brokers freight without the required licensing and bond is also deemed to be non-compliant according to the FMCSA. This meeting should be able to clear-up any confusion you may have.
 
I sure hope so Loaders! We are in compliance with the new regs (and we were with the old ones!) but I am tired of hearing other brokers say they don't need it because they are in Canada. I am planning on attending and can't wait to hear what they say.
Happy Friday All!
PR
 
Correct PackRat! This game of competitive business is best played on a level playing field, where all the players adhere to the same standard set of rules. Trying to confuse a customer or a carrier with the line "oh, we don't need a license because we're in Canada" is cheating at this game. If you want to be a reputable professional in this business, or any business, know what is required to operate legally and pay the money to do so. Do carriers compete against other carriers who operate trucks without plates? I don't think so.
 
We're a Canadian brokerage as well and as soon as the surety bond increase happened, our bond carrier let us know right away. If they were in compliance with the old rules, I'm sure that somebody would have contacted them on the new policy. The new surety bond is not quite as easy or nearly as cheap to get for small brokers and is probably why they do not have it.
If someone is dealing with a broker or carrier brokerage without the bond/MC#, they should stop doing business with them and report them to the FMCSA. That will force them to close their doors or get up to speed with the polices.
 
the guys who don't have a bond should be removed, but then again with the new rules & regulations they are now fully liable since they are illegally brokering freight.

even carriers who broker freight need to separate their operations, you can no longer have an MC where you can be a broker & a carrier, they must be separate businesses with separate MC numbers
 
"Fully liable" doesn't mean much if the broker has closed-up shop and ran into the hills with all the carriers money. Sounds pretty, but like a charming smile, doesn't buy you a cup of Tim's. The new bond requirement does nothing to change or influence your obligation to pay your suppliers. The 75K surety bond just leaves more meat for unpaid creditors to fight over in the event the broker does a disappearing act.
 
Remember when the Ontario load broker's license was put into effect. The problem was there was no compliance, and there are some fools out there that think this will still be the case.

ANYONE who brokers freight, whether they classify themselves as a carrier or a broker, has to carry the bond. This should be part of the vetting process for brokers. You can actually see if your broker is compliant by looking in SAFER web.

If the broker isn't bonded, they shouldn't be in business, and you shouldn't be doing business with them period.
 
We no longer work with any brokers that do not have the new bond in place. Some try to play "dumb" but there is no way that a broker (big or small) does not know about the new laws. I agree with loaders that there has to be a level playing field. The non-compliant ones are just cheating and it's not fair.
 
yeah shippers shouldn't be trusting them with their freight and carriers shouldn't be extending credit to them.

with the new laws seems we can now brings these people to court, although I'd like to see the first court case and the results.
 
We;ve heard of one carrier telling all brokers they deal with, produce a bond or shipments would need to be prepaid by visa- no exceptions. We have the bond and feel it's just part or doing business.
 
The NTBA event is selling out quickly.
If you are interested in attending, you should probably confirm right away.
 
A very informative meeting last night. Any broker who arranges freight to or from the US, and has not registered with FMCSA including obtaining the 75K bond, is exposing themselves to unnecessary liability. A carrier who chooses to do business with a non-compliant broker is taking on unnecessary risk of non payment. As mentioned at the meeting, there is more to come in terms of enforcement, including encouraging brokers and carriers to identify non-compliant brokers and carriers who broker freight without proper registration, to the authorities. The days of sitting back and assuming that rules and regulations apply to the "other guys" are over. We're getting closer to a level playing field.
 
The penalties that one could face, include a 10K fine for each load arranged while non-compliant. In addition, the speaker also indicated that in the event of a civil case (personal injury, motor vehicle accident), a non-compliant broker could be found liable. Enforcement will be more re-active as opposed to pro-active. In other words, they will initiate enforcement upon receipt of a complaint, and they are encouraging complaints! Remember, theses provisions of MAP-21 only came into effect late last year and as such, there could be some adjustments in the future.
 
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