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Sal Banuelos

MAP-21: Through the back door

I would like to comment that after analyzing in detail the new law MAP-21, I noticed, what I consider to be a loophole in the legislation. This bill will allow freight brokers who do not have the resources to get their Surety Bond or Trust Fund on their own to adhere to other freight intermediaries so that they can purchase a Group Surety Bond. This is a situation of which many bond companies are already taking advantage.


USE OF A GROUP SURETY BOND, TRUST FUND, OR OTHER SURETY.—In implementing the standards established by subparagraph (A), the Secretary may authorize the use of a group surety bond, trust fund, or other financial security, or a combination thereof, that meets the requirements of this subsection.

The purpose of increasing the bond was to raise the bar in order to protect the carriers of unscrupulous intermediaries (either a Freight Broker or Freight Forwarder), but because this legislation allows any Freight Broker or Forwarder to obtain their own Surety Bond through a Group Surety Bond, in which the freight intermediary may operate under their own authority, many freight forwarders are now able to sneak in new legislation through the “back door”.

We can all understand that the surety companies do not want to lose any income; but for some, it seems that this new legislation will be a new opportunity to increase their income. An example, if they normally charged $950 dollars a year for the bond, now are charging $ 3,500 a year.

I believe that this inclusion could be a huge loophole in the new legislation at the time to implement it. Why bother to increase the amount of the bond and requirements, if freight brokers and forwarders have the choice to renew their bond by only paying a greater annuity?

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