Ya that has worked out well lol. I would venture a guess maybe 10 brokers in Canada have the trust account if that many. They go broke or disappear the carriers is on the hook and gets nada usually.Correct, the brokerage industry was de regulated many years ago, but the trade off made at the insistence of carriers through the work of the OTA, was to have the Trust Account provision included in the Ontario Highway Traffic Act. It was meant to force freight brokers to place funds received from their customers into an account held in “trust” for the carries who actually perform the transport. Similar in a way to lawyers and real estate trust accounts. In the event of a broker bankruptcy, these funds would be separate and available to the carrier debtors, and not subject to seizure by other parties.
So true Rob. I really don’t know what the answer is other than for carriers to make doubly sure the people they are dealing with are completely legit. We have operated a trust account for years and it really is nothing more than words on the account. I could walk into our bank branch today and withdraw every nickel, drive to the airport and fly off into the sunset. However, it does supply a small, increased level of security for a carrier in the event of a brokerage bankruptcy .Ya that has worked out well lol. I would venture a guess maybe 10 brokers in Canada have the trust account if that many. They go broke or disappear the carriers is on the hook and gets nada usually.
However, it is better than zero and it does demonstrate a certain level of professionalism on the part of the broker. I guess as a carrier, one has to ask themselves, if everything else is equal and given the choice, should I deal with a broker that holds a bond, or one that doesn’t?75k usd brokers bond wont cover more than 1 weeks worth of freight invoices