"I'm more excited about the supply chain enabler side of it, that's actually building some of that tech to help brokers get more efficient, help shippers get more efficient, and help carriers get more efficient."
FMCSA Tightens Up: Brokers Risk Shutdown for Unpaid Claims
To protect carriers, FMCSA's new rule targets broker fraud, enhancing financial responsibility in freight.
In a significant move, the Federal Motor Carrier Safety Administration (FMCSA) has introduced a Final Rule to bolster financial responsibility among brokers and freight forwarders. This comprehensive rule, set to take effect on January 16, 2024, aims to prevent fraud and ensure that motor carriers are adequately protected against unpaid claims.
The Final Rule issued by the FMCSA amends five key areas related to broker and freight forwarder financial responsibility:
- Assets Readily Available: Specifies the types of assets considered sufficiently liquid for broker/freight forwarder trust funds.
- Immediate Suspension of Broker/Forwarder Authority: Details the conditions under which operating authority can be suspended, especially when financial security falls below $75,000.
- Surety or Trust Fund Responsibilities: Addresses responsibilities in cases of broker/forwarder financial failure or insolvency.
- Enforcement Authority: Outlines the FMCSA's authority and the penalties in suspension scenarios.
- Entities Eligible to Provide Trust Funds: Defines which entities are qualified to serve as BMC-85 trustees, excluding certain financial institutions.
The Owner-Operator Independent Drivers Association (OOIDA) and the Transportation Intermediaries Association (TIA) have both welcomed this rule, acknowledging its potential to combat broker fraud and increase transparency in financial dealings.
TIA President & CEO Anne Reinke: TIA applauds the agency for moving forward on this long overdue rule...in the midst of a fraud epidemic...The FMCSA's efforts...will make it more challenging for criminals and scammers to establish a presence in the marketplace as easily. TIA has been a leader in combating fraud for over 12 years...Those provisions are now finally being implemented and enforced, which will have a tremendous impact on our industry".