In a continuing effort to communicate information we believe to be of impact to your industry, please find below information affecting domestic freight forwarders and property brokers.

 

On June 29, Congress passed MAP 21, (http://www.gpo.gov/fdsys/pkg/BILLS-112hr4348enr/pdf/BILLS-112hr4348enr.pdf) and it was signed into law July 6, 2012. While the news headlines mention this law reduces student loan interest rates and authorizes billions to be spent on roads and bridges, part of this nearly 600-page bill includes changes to how the Federal Motor Carrier Safety Administration (FMCSA) regulates many aspects of the US domestic logistics industry.

 

With regard to property broker and domestic freight forwarder bonds and cargo insurance, the significant changes are:  

1. Financial Responsibility:
1. The required minimum $10,000 Property Broker Bond will increase.
2. The domestic freight forwarder will be required to maintain a bond (or similar instrument) to guarantee the payment of freight charges.
3. The domestic freight forwarder will be required to maintain insurance for bodily injury and property damage on moves it arranges or controls.
4. The domestic freight forwarder will be required to maintain cargo insurance.
2. Amount: The minimum amount of financial responsibility for items in 1 above will be "not less than $75,000" but could be higher if established by the FMCSA through rulemaking.
3. Exceptions: Carrying forward today's practice, certain entities are not subject to the FMCSA regulation when conducting affairs typically regulated by other US government agencies:
1. The OTI-FF and OTI-NVOCC when arranging for inland movement of goods otherwise regulated by the FMC (moving on a through ocean bill of lading).
2. The indirect air carrier "holding a Standard Security Program approved by the Transportation Security Administration" when engaging certain limited activities.
3. The customs broker, to the extent the customs broker is engaged in "Customs business" or engaged in a "movement under a Customs Bond."
4. Effective Dates: The changes for items in 1 above will occur on or before October 1, 2013 (one year from the enactment date of these portions of the legislation).

Additionally, there will be a new class of business that may need the property broker bond. Any trucking company that brokers freight cannot do so unless they have property broker authority and a bond.

 

Finally, the amount of financial responsibility for regulated entities will be the subject of future reports issued periodically to Congress by the FMCSA.

 

Roanoke Trade is dedicated to keeping you informed on circumstances which will have an impact on your business. Please contact your Roanoke account representative with any questions you have.