|The US Department of Transportation's Federal Motor Carrier Safety Administration (FMCSA) will be able to fine Freight Forwarders up to $10,000 if they are not compliant
with new regulations from the Moving Ahead for Progress in the 21st Century Act (MAP-21). Freight Forwarders that are subject to FMCSA jurisdiction need to obtain and file
with FMCSA a surety bond or trust agreement in the amount of $75,000 by December first to stay compliant.
The new regulations have actually been in effect since October 1, 2013. The FMCSA has provided a 60-day phase-in period beginning October 1, 2013, to allow the industry
to complete all necessary filings. The head of Safety for the FMCSA recently told one our employees that several Freight Forwarders have still not registered. By now, they
should have received warning letters.
The Moving Ahead for Progress in the 21st Century Act (MAP-21) was signed into law on July 6, 2012 by the President. MAP-21 (Pub. L. 112-141, 126 Stat. 405 (2012))
included a number of mandatory, non-discretionary changes to FMCSA programs. Some of these changes amended the financial security requirements applicable to
property brokers and freight forwarders operating under FMCSA's jurisdiction.
Original Notice Questions and Answers
The original notice can be found in the September 5, 2013 Federal Register (FR DOC #: 2013-21539). It has a list of common questions and responses about the
regulation. Here are some interesting excerpts:
Question: Are freight forwarders and brokers required to register with FMCSA?
Answer: Yes. Freight forwarders and brokers that are involved in interstate commerce and subject to FMCSA jurisdiction are required to register with FMCSA. Freight
forwarders that perform both freight forwarder services and motor carrier services (beyond the scope of their freight forwarding operations) must register both as freight
forwarders and as motor carriers. Additionally, as noted in Q1 above, MAP-21 requires motor carriers that broker loads, even occasionally, to register both as motor carriers
and as brokers.
Question: What is the civil penalty for a broker or freight forwarder who engages in interstate operations without the required operating authority (registration)?
Answer: A broker or freight forwarder who knowingly engages in interstate brokerage or freight forwarding operations without the required operating authority is liable to the
United States for a civil penalty not to exceed $10,000 and can be liable to any injured third party for all valid claims regardless of the amount (49 U.S.C. 14916(c)). The
penalties and liability to injured parties apply jointly and severally to all corporations or partnerships involved in the transportation and individually to all officers, directors,
and principals of these business forms (49 U.S.C. 14916(d)). Under 49 U.S.C. 14901(d)(3), a broker of household goods (HHG) who engages in interstate operations
without the required operating authority is liable to the United States for a civil penalty of not less than $25,000 for each violation.
Question: May I use group surety bonds or trust funds to satisfy FMCSA's financial responsibility requirement?
Answer: No. Although FMCSA is authorized, pursuant to 49 U.S.C. 13906(b) and (c), to accept group financial security products to meet property broker and freight forwarder
financial responsibility requirements on the condition that those products otherwise meet the requirements set forth in 49 U.S.C. 13906 and 49 CFR part 387, the Agency is
not required to accept these group financial security products. At this time, FMCSA is considering the enforcement implications of group sureties as well as the effect on
small entities and new entrants. FMCSA is committed to reexamining this issue as part of its enforcement phase-in plan described under section C, FMCSA
Implementation and Enforcement Timelines, below.
Question: If my surety bonding company or trustee previously filed Forms BMC-84 or BMC-85, do I need to file a new one reflecting the new $75,000 minimum financial
Answer: Yes. All brokers and freight forwarders subject to FMCSA jurisdiction must file new BMC-84 or BMC-85 forms reflecting the new minimum financial security amount
of $75,000 as of October 1, 2013. FMCSA will develop new BMC forms for use by surety bonding companies and trust fund institutions in advance of the October 1, 2013,
Question: My company has both broker and freight forwarder authority. Is one $75,000 bond or trust fund sufficient or do I need 2 separate bonds/trust funds?
Answer: One $75,000 bond or trust fund is sufficient as long as the legal entity holding the authorities is the same. Your company will need to file separate BMC-84/BMC-85
forms for the broker and freight forwarder operations. However, the underlying bond or trust fund can be the same for both operations. If your broker and freight forwarder
operations are conducted under separate but affiliated companies, each entity must have a separate bond or trust fund.
Question: MAP-21 says that I have to use a surety bond company that is approved by the U.S. Treasury Department. How do I know whether my surety bond company is
approved by the Treasury Department?
Answer: The Treasury Department's Financial Management Service maintains a list of certified surety bond companies at http://fms.treas.gov/c570/index.html. This and
other information about certified surety bond companies can be obtained from the U.S. Department of the Treasury, Financial Management Service, Surety Bond Branch,
3700 East West Highway, Room 6F01, Hyattsville, MD 20782, Telephone (202) 874-6850 or Fax (202) 874-9978.
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