Letters: Surety Bonds, Road Safety

Surety Bonds

I am writing regarding my opposition to the recent bill in Congress to raise broker surety bonds to $100,000 (“Bill Would Mandate Bond of $100,000 for Brokers,” 7-4, p. 3).

We have been in business for more than 26 years and have always been fair with our carriers. We know that we cannot survive without good relationships with our carrier partners and value them highly. We pay, in many cases, before we are paid by our shippers, and we also have paid our carriers when shippers have gone out of business because it is our responsibility, as we chose the shipper.

We presently pay more to move our freight than ever before, and our net profits have fallen for the past several years. Raising surety bonds to $100,000 will create just another financial problem for 90% of brokers — and will probably put some out of business.

The best practice to help carriers avoid brokers defaulting is the proper follow-up before taking loads to make sure the broker has good references, good credit and good payment history and has stood the test of time.

In our 26 years in business, we have had our share of carriers who caused us to lose business because of their service problems. But we do not, as a result, bash all carriers. We realize that there are always some bad apples in every business; thus, you should not bash all brokers because most are doing the right thing.

I hope that the present bill before Congress meets with the same fate as last year’s, in that it fails.

I am surprised that the Transportation Intermediaries Association also is in favor of increasing the surety requirement. I thought they were supporters of brokers, but I have to assume they are only supportive of the giant brokers who will become even bigger, and thus be able to affect rates if many smaller brokers are put out of business.

I have no problem with the bill requiring disclosures and toughening penalties for bad brokers — as well as a smaller increase to $25,000. But $100,000 is totally unreasonable and will be harmful to our industry.

I agree with Dan Larson, chief operating officer of Pacific Financial, whose company provides surety bonds. Larson said in your article that an increase in the surety will not reduce fraud and would hurt the transportation industry and force many good brokers out of business — as well as small carriers who would be forced to buy surety bonds under this bill.

Keep the present surety bond and get our legal system to quickly prosecute and jail bad brokers. And, carriers, do your due diligence, and our industry will be better off.

Ben Ahern

President

Laser Transportation Systems Inc.

East Windsor, N.J.

Road Safety

How disappointing it was to read the article “FMCSA Says It Can Improve Road Safety by Regulating Shippers, Freight Brokers” (7-11, p. 2). What an amazing amount of nonsense — and to top it off, it is supported by American Trucking Associations, according to Rob Abbott, ATA’s vice president of safety policy, as quoted in the article.

Never mind that highway accidents continue to decline on an annual basis.

Never mind that the Federal Motor Carrier Safety Administration’s new Compliance, Safety, Accountability program now dominates the actions of motor carriers.

Never mind that electronic onboard recorders are moving into the motor-carrier mainstream.

Never mind that responsible motor carriers take safety seriously.

As a motor carrier, if you don’t like the treatment you are receiving from a shipper/receiver or broker, do something about it. Don’t ask the government to do what you can and should be doing yourself.

At least there was some comic relief in the article. One of the three principles noted was “raising the bar to enter the motor carrier industry.” As a start-up carrier, I got a real laugh at that one.

Of course, I haven’t had to worry about getting bank credit without having been in business for three years to purchase a truck with 1,000,000-plus miles that needs a $1,000 repair every week.

Or to prepay insurance for the whole year while having enough cash to finance 30 to 45 days of receivables while fuel is $3.90 to $4.10 per gallon.

Of course it’s a breeze to file all the paperwork to set up a company with the involvement of the Internal Revenue Service, the secretary of state, state taxing authorities for withholding, unemployment.

And it is so easy to go to the department of motor vehicles and pay for a license as long as you have the title work, loan documentation, vehicle inspection number verification, vehicle weight, emissions inspection, insurance cards.

If it hadn’t been for the hundreds of shippers who call me at all hours of the day and night to get into the trucking business, I might have chosen a different line of work.

There is always a bigger and meaner ox. ATA has chosen to get in the corral with the biggest ox of them all. The ox that gets gored may be your own.

Roger Edwards

Logistics Solutions

Frontier Leasing Inc.

Highlands Ranch, Colo.