Dive Brief:
- The Federal Motor Carrier Safety Administration released details Wednesday on a final rule to help ensure brokers and freight forwarders have sufficient money posted to compensate carriers.
- The rule sets parameters on what forms of security would be eligible and ineligible. Brokers and freight forwarders with financial security falling below $75,000 could have their operating authority suspended.
- “This rule will result in benefits to motor carriers,” the agency said, noting it’s seeking to address how some brokers withhold payments to motor carriers. Provisions of the rule go into effect Jan. 16, 2025 and a year later.
Dive Insight:
The Moving Ahead for Progress in the 21st Century Act, signed into law in 2012, required trust funds or other financial security be limited to “assets readily available to pay claims,” the rulemaking noted.
In the final rule, the agency defined a list of readily available assets that must be liquidated within seven calendar days if needed. Those eligible assets will be cash, Treasury bonds and irrevocable letters of credit by a federally insured depository institution. Real estate, stocks, non-Treasury bonds and other securities would be ineligible.
In addition, the final rule calls for the ability to potentially suspend brokers’ and freight forwarders’ operating authority if their available financial security falls below $75,000.
The agency also calls for removing loan and finance companies from a list of providers allowed to serve as BMC-85 trustees.
The rule is currently listed as “unpublished” and scheduled for publication Thursday. Once published in the Federal Register, there’s also a 30-day window for parties to file petitions for reconsideration.
“FMCSA believes that most brokers operate with integrity and uphold the contracts made with motor carriers and shippers,” the agency said. “However, a minority of brokers with unscrupulous business practices can create unnecessary financial hardship for unsuspecting motor carriers.”
