Thursday, October 31, 2013

$75,000 Broker Bond?

From our Friends at Broussard Logistics:

Does Your Broker Have a $75,000 Guarantee?

By John Carr – Director of Operations | Freight Cowboy
When I first started in the 3rd party brokerage industry, I heard stories from my co-workers of how it “used to be”. They would tell me how all you needed was a computer, a phone, a customer with a load, and a driver who could move the load. Your reputation was your guarantee. By the time I started in this industry in the early 2000’s, however, the government had instituted a few regulations to protect customers from the abuse that occurred in the early days. The broker’s reputation was still your guarantee, but the government provided some basic minimum protections for customers. In the last five years, I have witnessed some sweeping changes in the industry as a whole. Finally, there are protections being granted to the shippers. The government is now granting shippers an payment guarantee increase from a $10,000 to $75,000, but only if they perform due diligence to ensure the brokers are compliant with the new MAP-21 law.
So what is a $75k Broker Bond?

In the most basic terms, this is money paid forward by a Broker to guarantee that they will pay contracted carriers who move freight for their shippers. This protects carriers from a broker going out of business and not paying their freight bills. If the broker closes down and has payment due to a carrier, the carrier can then file against the brokers bond for payment. This also protects shippers and receivers from being doubled billed for the same shipment, because there is a larger safety net to ensure carriers have an avenue to get paid.

The $75k broker bond requirement has been structured into the MAP-21 law. This went into immediate effect on 10/1/2013. All Brokers, Freight Forwarders, and Carriers who contract out freight to trucking companies will be subject to a 60-day “phase in” period to show proof of compliance to the FMCSA. After December 1st, the Department of Transportation will begin to revoke the operational authorities of non-compliant Brokers, Freight Forwarders and Carriers. These companies will no longer be allowed to legally operate as a Broker.
Additional changes that the MAP-21 law will implement:
  1. Increased Standards to Obtain a Brokerage Authority.
    • Must have an officer with 3 years brokerage expertise.
    • Pass a written proficiency exam.
    • Understanding of rules/regulations and industry practices.
  1. Penalties and Civil Liability for Unlawful Brokering.
    • Any person who knowingly authorizes, consents to, or permits, directly or indirectly, either alone or in conjunction with any other person the brokerage of freight without proper licensing.
    • Up to $10k fine for each violation
  1. Motor Carrier Registration Requirements.
    • A motor carrier cannot act as a broker unless it has registered as a broker.
    • Each must act independently of the other.
Even with these additional changes in the transportation landscape, I still firmly believe that in my line of work, your reputation is your guarantee. As a broker, you have to make sure to follow through with your own due diligence and make sure the brokers you work with comply with all of these new regulations. Make sure to keep a copy of your broker’s bond and operating authority and ask for updated copies every year. You would never let your product run without the carrier being able to insure the shipment.

Wednesday, October 16, 2013

Baltimore Port Strikes

Baltimore Port Strike

This morning, it was reported that all cargo operations at the Port of Baltimore's public marine terminals came to stop today after a local longshoremen's union failed to ratify a contract agreement with port operators last night.

The contract in question covers local workplace issues. A broader master agreement covering compensation and rules for container and vehicular shipments at all East Coast ports was reached between port operators and unions earlier this year. Though several cities' unions are still negotiating local agreements, the Baltimore port is the only one facing a strike.

The Local No. 333 is one of four unions representing some 1,200 dockworkers in Baltimore, and has been in extended negotiations regarding localized workplace issues with the Steamship Trade Association of Baltimore, which negotiates for port operators.

Monday, October 07, 2013

5th Annual Harris County International Trade and Transportation Conference

Register Now!

The Fifth Annual Harris County International Trade & Transportation Conference Is only five weeks away! Space is limited.

Tuesday, October 29th

Registration opens at 7 AM
Conference Hours are 8 AM – 5 PM
Reception 5 PM – 7 PM
Reliant Center (parking included in registration fee)

Please visit our new website at

Links for the Registration site and Program page are below.


Contact 713-755-4012

Friday, October 04, 2013

Government Shutdown impacts trade:

Some of the most recent impact on Trade since the Government Shutdown includes:

  1. Fish & Wildlife Service (FWS) - is open and processing shipments. All Declarations must be processed manually as the Electronic Declarations web site is down.
  2. Environmental Protection Agency (EPA) - personnel are not available to process Notices of Arrival of Pesticides and Devices Form 3540-1.  National Customs Broker and Forwarders Association of America (NCBFFA) is in communication with U.S. Customs and Border Protection (CBP) and EPA for guidance
  3. U.S. Food and Drug Administration (FDA) - delays are possible as Import Operations will remain open with limited resources to continue to perform critical functions: Entry review, field examinations, sample collections, compliance, exports, and destructions.
  4. Steel License Office - is closed and entries are being processed with temporary license number to be used is "STEELX103".
  5. Exchange Rate - receipt of currency exchange rates may be interrupted/sporadic.  Entries should be prepared using the last applicable rate available until regular processes resume.  Entries should be corrected before the filing of entry summary, where possible.  For entry summaries not able to be corrected, we will work with CBP to find the most efficient process including possible correction at liquidation.
  6. Tariff Rate Quota Entries - these entries are automatically put on hold by the CBP system.  Until automated processing resumes, CBP has instructed the ports to manually release the entries and suspend liquidation for ultimate liquidation at the proper rate. 
  7. Tariff Preference Levels - the International Trace Commission (ITC) OTEXA license system is down.  In the interim a solution would be to file the entries as entry type code 01.  If the license is available before finalization of the entry, the entry could be amended to entry type code 02.  If not able to be corrected, a PEA would be filed to correct the entry.
  8. The ITC World Wide Web site, at is down – access to the United States Harmonized Tariff Schedule (USHTS) can be obtained from Customs Info Global Data Mining. You can download your copy at:
  9. Exports - U.S. Department of Agriculture (USDA) certificates that are required by the governments of importing countries as a condition for importation could be impacted.
  10. Whether the CBP 2013 Trade Symposium will continue on as scheduled will be determined as the date draws closer.
  11. The October broker exam will remain as scheduled.

Thursday, October 03, 2013

Doing Business with Mexico Webinars - U. S. Commercial Service

Series of Webinars on Mexico: For more information, please contact Linda Abbruzzese at

Webinar 1 of 7: Exporting to Mexico - Harmonized System Code Basics and Special Certificates
Your Computer
Date: September 17, 2013
Time: 2 - 3 p.m. EDT
Cost: $25

Webinar 2 of 7: Exporting to Mexico - Mexican Customs Topics: Taxes & Tariffs 101
Your Computer
Date: Thursday, October 17, 2013
Time: 2 - 3 p.m. EDT
Cost: $25
Learn more/register:
In this webinar you will learn the Mexican customs definitions when paying value added taxes, paying an import tariff tax and dealing with customs tariff laws. Learn when to and when not to pay taxes and tariffs.

Webinar 3 of 7: Exporting to Mexico - NAFTA Certificate of Origin
Your Computer
Date: Wednesday, November 13, 2013
Time: 2 - 3 p.m. EDT
Cost: $25
Learn more/register:
In this webinar you will learn why the NAFTA Certificate of Origin is essential and beneficial to U.S. exporters, and the benefits gained when using the NAFTA Certificate of Origin.

Webinar 4 of 7: Exporting to Mexico - INCOTERMS Review and INCOTERM Common Practices in Mexico
Your Computer
Date: Wednesday, December 18, 2013
Time: 2 - 3 p.m. EDT
Cost: $25
Learn more/register:
In this webinar you will learn Incoterm best practices in Mexico and which is the most appropriate Incoterm to use when exporting to Mexico.

Webinar 5 of 7: Exporting to Mexico - Exporting Goods to Mexico Using Courier Services and Postal Service
Your Computer
Date: Wednesday, January 15, 2014
Time: 2 - 3 p.m. EDT
Cost: $25
Learn more/register:
In this webinar you will learn the advantages of using courier services and the postal service to send samples or specific goods into Mexico and the Mexican customs process of handling your exports into Mexico.

Webinar 6 of 7: Exporting to Mexico - Mexican Import Process
Your Computer
Date: Wednesday, February 12, 2014
Time: 2 - 3 p.m. EDT
Cost: $25
Learn more/register:
In this webinar you will learn if your client in Mexico is able to import, how the import process works, and other options and alternatives to send your products to your client in Mexico.

Webinar 7 of 7: Exporting to Mexico - How to Settle Disputes with Mexican Customs
Your Computer
Date: Wednesday, March 12, 2014