I support the proposal to raise the broker bond from $10,000, in order to ensure the financial integrity of freight brokers. The current bond level of $10,000 is not high enough to cover losses incurred in the event a broker is not fiscally responsible. Owner operators need a way to know that they are doing business with reputable brokers, especially since they are the ones assuming the insurance cost and taking on the liability for the shipments.

In our freight broker training school at Brooke Training, many of the students who currently go through the course are former owner operators who desire to get off the road, or carriers who want to open up a brokerage division. The students from these backgrounds understand the owner operator, and communicate their plight to the class daily. This can mean the difference of survival for them, and the owner operator cannot afford to absorb the costs of a broker who does not pay. One of the primary things that we teach prospective brokers in the class is that respect for the driver should be of utmost importance – to treat the driver as they desire to be treated.

One of our goals is to raise the standard of the freight brokerage industry, and this bond petition is a step in that direction. We teach prospective brokers who do not have sufficient funds to pay on a timely basis that they should become an agent for a company rather than setting up their own brokerage. A broker needs to pay fair and in a timely manner – let’s keep the trucks and cash flow rolling as quickly as we can.

There are also other steps that the owner operator should take to protect himself. He should ask for references from the broker (from carriers, owner operators and shippers). He can also run a credit report on the brokerage to determine their level of responsibility.

It’s also a good idea for the carrier to start out with a set credit limit for the brokerage.

I agree with Jim Johnston, President of OOIDA, who states that “Obviously, when brokers run up debts of $100,000 or more with truckers, the $10,000 bond does not come close to providing the type of protection intended by Congress.” There are a lot of variable that determine what the magic number should be for the bond, but $10,000 isn’t enough. I believe that by requiring a substantially larger bond for freight brokers, this will help raise the bar for the industry and help further control unnecessary losses for both the carrier and owner operator. It will also give an advantage to the brokers who pay their carriers and reduce fraud.

(BIO: Jeff Roach is president of Brooke Transportation Services, Inc. Roach, a 17-year veteran of the transportation industry, started Brooke Group a decade ago, and it has built up into one of the leading U.S. transportation firms.

Recent expansions include Brooke Transportation Training Solutions, a freight broker training school, and Ashely Transportation. Find out more about Brooke at www.justintimefreight.com and www.brooketraining.com. Email Jeff at jroach@transportationtraining.com or call (214) 206-1169.