It’s been several years since the controversial $75K freight broker bond increase was enacted. Back then, the increase spurred a big debate, as the previous amount of $10,000 had been unchanged since the 1970s. Many small and independent freight brokers feared they may not be able to comply with the new requirement and would be forced to shut down.
Fortunately, most of these fears didn’t materialize and now it’s time for yet another renewal. Read on to understand when your freight broker bond renewal is due, what costs you can expect and how to choose the right bonding agency. You can also watch our video which outlines the most important steps of the process.
Freight Broker Bond Renewal Deadlines 2019
Your renewal deadline will depend on when you first obtained your freight broker bond.
Brokers who were in business in 2013
Freight broker bonds are valid for one year from the date they were issued. In 2013, the FMCSA announced that all freight broker bonds expire on Oct. 1 and must be renewed with the increased $75K amount. This means that if you were in business back then and you renewed your bond on time, your deadline this year is Oct. 1, 2019.
Note, though, that because of the public outcry about the decision back in 2013, the FMCSA extended the compliance period to Nov. 1 and started suspending licenses for brokers who hadn’t gotten a bond by Dec. 1. Thus, if you made use of the grace period, your deadline might also be during these two months this year.
New brokers and brokers in business after the increase
If you got licensed as a broker only after the increase or are planning on becoming a freight broker, this means that your deadline is exactly 1 year after the date listed on your bond.
Remember that it’s not a good idea to operate without a valid freight broker bond even for a day, as this can lead to your license suspension and even refusal on part of shippers and carriers to work with you. The FMCSA has made it easy for them to quickly check if you are licensed and bonded.
In fact, this year, the FMCSA introduced a special warning on brokers’, forwarders’ and carriers’ public pages which notifies everyone that this person’s bond or insurance is about to be cancelled, and their license will be revoked.
For this reason, we typically recommend starting the renewal process early as processing times are longer when a lot of brokers are applying for their surety bond at the same time.
Cost of Renewing Your Freight Broker Bond
Should you expect your renewal to be the same price as last year’s? Not necessarily.
Bonding companies will look into a variety of factors when they give you a renewal quote and these factors are subject to change. The most important determinants of your freight broker bond cost are you personal credit score as well as your business experience. Financial strength can also be considered. Changes in any of these factors can affect your premium, negatively and positively alike.
Last, but not least, the surety bond agency you choose to work with can also have a great impact on your renewal quote.
Use the calculator below to get a quick estimate of your renewal rate based on your credit score.
Surety Bond Cost Calculator
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Choosing Your Surety Bonds Agency
Surety bonds companies – the companies underwriting bonds – don’t work with the public directly. So, for you bond renewal you need to pick a surety bonds agency. Don’t underestimate this choice, as the right agency will get you the lowest possible quote. If you have credit issues, the choice between one agency and another might be the difference between getting bonded or being refused a license.
So what to look for in an agency? As a rule of thumb, good surety bonds agencies work only with A-rated and T-listed bonding companies, which ensures your freight broker bond will always be accepted. It’s also important that your agency works with a variety of bonding companies.
By choosing Bryant Surety Bonds you get all this, so you don’t have to worry. The whole application process can be done online and your bond will be filed to the FMCSA electronically. Also, we make sure to send renewal reminders to all of our clients, so you don’t worry about consecutive renewals.
Understanding Freight Broker Bonds
A final, but important remark: surety bonds are not the same as insurance. Whereas insurance provides protection to you or your employees, a freight broker bond acts as a protection to those you do business with. This is why it’s important not to delay payments and understand state and federal legal requirements, so you don’t get a claim on your name.
Other Regulatory Updates for 2019
Over the course of this year, a significant number of states have increased their minimum wage requirements. If you operate in several, make sure to check whether you need to comply with any new wage requirements.
As already noted above, this year the FMCSA began red-flagging brokers, carriers, and forwarders whose bond or insurance is pending cancellation. When your bond is about to expire, your public FMCSA page will show a notice that warns visitors about that. The FMCSA introduced this notification as a way to deal with fraudulent actors who exploited the cancellation window. This notification will appear equally on everyone’s page as a warning, so you should make sure to renew your bond and insurance on time, so as to avoid giving rise to concerns to potential or current business partners.