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khammond on DSKJM1Z7X2PROD with NOTICES

Federal Register / Vol. 86, No. 239 / Thursday, December 16, 2021 / Notices Brian Klink stated: Having worked in the industry when the bond requirement was only $10,000, there was rampant abuse of the system that had an adverse effect primarily on small, non-fleet trucking companies. The MAP21
protections which required among other things the bond face amount be increased to $75,000 was a positive step in limiting the here today, gone tomorrow freight broker market. There are adequate resources available online to determine the financial stability of Property Brokers and Freight Forwarders which is yet another step in the right direction. Enforcement of the current regulations against those scamming the system needs to be enhanced rather than opening the door leaving little or no protection for the trucking industry as is being proposed here.
Patricia Newkirk said, We are STRONGLY AGAINST ANY exemptions from the Broker Surety Bond. As a small carrier and a small broker we understand the importance of having a fail safe against disreputable brokers failing to pay. Our premium for our bond is $1,600 per year. When you calculate that on a daily cost of operation, 261 working days per calendar year, its $6.13 per day. It is not an unreasonable burden when you look at the cost to small carriers when brokers open, double broker and close the doors in a few months. We have filed against broker bonds 3 times in the past 10 years, once declined because it was inTRAstate commerce, once paid by bond and finally paid by the broker at 140 days past due AFTER we contacted their bonding agent. If any changes are brought to the Surety bond, an increase would actually be more fitting.
Stephen Oatley commented, As far as the mention of dispatchers, I agree there is a need for enforcement of these truck dispatchers as many are working as illegal brokers, under the mask of being load finders for trucking. With that said, removing the bonding requirement for a freight broker authority will do very little to help the industry. Saying that the bonding requirement is a barrier to entry is correct and it should be. If an aspiring broker can not afford the $1,200$5,000
yearly cost of the bond, they really have no business being a broker. A broker has a fiduciary duty to pay their carriers, and it is not cheap.
Opposition to the Bond An anonymous commenter wrote, The trucking industry has become more complex than it really needs to be which in turn adds wasted funds. Bonds such as this force small, honest brokers
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to close doors whose hearts are typically sic after seeing the truck make adequate revenue and providing good service to their customer.
Don Juan commented, Prior to the 75K requirement that dollar figure would be $5,000 to $7,500 in valid claims to trigger a cancellation. Now with the 75K requirement, that valid claim amount rises to $35,000 to nearly $60,000 BEFORE a cancellation is made.
By increasing the financial requirement to 75K, in essence crooked brokers can now rack up almost $40,000 in claims BEFORE their authority is even jeopardized! Then, when a cancellation IS made on the bond or trust, they still are LEGALLY allowed to operate for another 30 days before they have their broker authority revoked. MAP21
stipulated insurance limits to be reviewed every 5 years. Seven years later it has yet to be reviewed. In the meantime, dispatch services continue to operate illegally and crooks post loads for $8 a mile with no intention of paying the carrier. The shipper is ultimately responsible for freight charges. Let them post the financial requirement!
VII. Agency Decision The Agency has thoroughly reviewed SBTCs request as well as the public comments. The Agency is denying SBTCs request as it does not meet the three-part test for issuance of an exemption pursuant to 49 U.S.C. 13541.
In its request, SBTC does not present a clear argument as to why its 2019
request for a 5- year exemption for brokers and freight forwarders with annual revenues below $15.01 million should be granted pursuant to section 13541. Instead, its argument appears to be limited to indicating that FMCSA, in its 2015 decision denying AIPBAs request for an exemption, did not offer any rationale or explanation besides conclusory statements as to why the granting of an exemption was not appropriate under section 13541.25
SBTCs argument is factually incorrect.
In its 2015 decision, FMCSA provided extensive analysis showing 1 why AIPBAs application was not in the public interest, 2 that AIPBA did not show that regulation was not necessary to protect shippers from the abuse of market power, and 3 that regulation was necessary to implement the National Transportation Policy NTP of 49 U.S.C. 13101. 80 FR at 1714617147.
Moreover, even if FMCSA had not carefully analyzed the statutory factors in 2015, SBTCs arguments related to AIPBAs 2013 exemption request are time barred. As noted above, AIPBA did 25 SBTC

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not appeal FMCSAs 2015 decision in a timely manner, nor did it seek any administrative reconsideration of the Agencys decision for over 4 years.
Instead, SBTC sought an exemption for a more limited group of entities. SBTCs application fails to address the section 13541 requirements for granting an exemption, which on its own is grounds for denying the application. FMCSA
nevertheless provides a merit analysis of SBTCs request and concludes that, while the Agency has authority to grant SBTCs request, unlike in 2015 when AIPBA sought an exemption for all brokers and freight forwarders from the bond requirement, the Agency nevertheless will deny the request, for the reasons discussed below.26
First, in order for FMCSA to grant SBTCs exemption request, it would need to find that, for the next 5 years, the $75,000 bond requirement, as applied to brokers and freight forwarders with annual revenues under $15.01 million, is not necessary to carry out the transportation policy of section 13101. 49 U.S.C. 13541a1.
As noted above, aside from unsupported arguments challenging FMCSAs 2015
treatment of this issue, SBTC makes no current arguments why regulation is not necessary to advance the NTP.
To the contrary, and as evidenced by the comments opposing SBTCs request, the bond is necessary to implement the NTP. The NTP states that, in overseeing the motor carrier industry, it is the policy of the federal government to meet the needs of shippers and to enable efficient and well-managed carriers to earn adequate profits and attract adequate capital. . . . 49 U.S.C.
13101 a2C,F. By providing financial recovery for motor carriers and shippers in the event of broker or freight forwarder non-payment, the $75,000 bond serves to strengthen the finances of motor carriers and shippers.
An exemption, even a temporary one, from the bond requirement for a wide swath of the broker and freight forwarder industry, as SBTC requests, would harm congressional goals.
Moreover, as described above, numerous public comments in the docket support FMCSAs determination that the $75,000 bond benefits motor carriers.27
26 In its 2015 Decision, FMCSA indicated that it did not have the authority to effectively nullify a statute by exempting the entire class of persons subject to the bond requirement. 80 FR at 17145.
While ATA questions the Agencys authority to entertain this request, ATA Comments at 2, TIA
believes the Agency is authorized to consider SBTCs exemption request. TIA comments, at 3.
27 Comments of the Transportation Intermediaries Association, at 45; comments of the Surety &

Application, at 12.

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