US legislation targets fraudulent freight brokers, forwarders

WASHINGTON — A Republican and Democratic duo have introduced legislation that would crack down on unscrupulous brokers and freight forwarders.

Sens. Olympia J. Snowe (R-Maine) and Amy Klobuchar (D-Minn.) say the Motor Carrier Protection Act down would step up regulatory oversight, including hiking up penalties, of brokers who defraud motor carriers.

The initiative is aimed at helping small trucking companies and owner-operators, in particular, as they typically have little to no legal recourse to recoup losses incurred from fraudulent brokers.

"Many truckers are small, independent businesses that fraudulent freight forwarders and corrupt brokers too often easily prey upon," said Klobuchar. "This legislation ensures trucking operators have the tools and protections necessary to prevent fraud, and also modernizes and strengthens federal oversight of this industry."

If passed, the bill would, among other things, increase the broker bond from $10,000 to $100,000 and expand that bond requirement to freight forwarders.

Ramp up requirements and disclosures for any person or company seeking to obtain broker or freight forwarder authority.

Establish significant penalties for violations of broker regulations, including unlimited liability for freight charges for conducting brokerage activities without a licence or bond.

Create a requirement for brokers and freight forwarders to renew their operating authority annually and require the Federal Motor Carrier Safety Administration to revoke operating authority that is not renewed.

Revenue generated from the renewal fees will be dedicated to FMCSA‘s oversight and enforcement of broker regulations.

Clarify that trucking companies must have a broker’s or freight forwarder’s licence and an appropriate bond in addition to their motor carrier operating authority to arrange freight for another carrier for compensation.

The Owner-Operator Independent Drivers Association, which worked closely on the development of the bill with the Senators, praised the introduction.

"If passed, this law would put a stop to a system that allows rogue brokers and scam artists to operate unchecked," said Todd Spencer, executive vice president of OOIDA. "Too often, we’ve seen bad brokers get away with collecting payment from shippers but leaving truckers holding the bag."

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