FMCSA has released in Jan. 5 a proposed rule that set financial security requirements for brokers and freight forwarders which will help protect motor carriers in the event of non-payment, including the immediate suspension of a broker`s authority. In the proposed rule, published in a Federal Register announcement, the agency outlines regulations in five separate areas:
• Assets readily available
• Immediate suspension of broker/freight forwarder operating authority
• Surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency
• Enforcement authority
• Entities eligible to provide trust funds for form BMC-85 trust fund filings
The agency affirmed its proposal would result in benefits to motor carriers, since they are aware that some brokers opt for withhold payment to carriers for services provided. If the brokers don`t pay the carriers can file against a broker`s bond seeking to receive their payment.
If, however, claims against an individual broker exceed $75,000, the financial responsibility provider will often submit the claims to a court in an interpleader action to determine how to allocate the broker bond or trust fund.
According to the FMCSA freight forwarders and brokers will have until seven business days to object to any immediate suspension action before come into effect, in order to meet constitutional due process concerns.
FMCSA will accept comments on its new advance notice of proposed rulemaking until March 6, 2023. Please visit the official website for more information: https://www.federalregister.gov/documents/2023/01/05/2022-28259/broker-and-freight-forwarder-financial-responsibility