The Facts. Here We Go Again…

There has been and will be continued confusion about the MAP-21, specifically 49 USC 13904 stating that a broker has experience or training. So much that some freight broker schools are attempting to use wording from the rule to entice potential students to purchase their training.

For those of you that may not know, MAP-21 is part of the ruling that increased the property brokers surety bond from $10,000 to $75,000. The original proposed bill would have increased this bond to $100,000 but prior to passing was lowered to $75,000. If you do some research on this you will find that the only thing this bond increase succeeded at doing was putting thousands of smaller brokers out of business, overnight. Just a little more research and you will find that those pushing for this to pass had a lot to gain and deep pockets to push it through.

As to the 49 USC 13904 rule, it’s primary focus is the registration of brokers. Specifically, those obtaining their freight broker authority to operate as a freight brokerage company. The entire ruling is below;

49 U.S. Code 13904 – Registration Of Brokers

(a) In General.— The Secretary shall register, subject to section 13906 (b), a person to be a broker for transportation of property subject to jurisdiction under subchapter I of chapter 135, if the Secretary determines that the person—

(1) has sufficient experience to qualify the person to act as a broker for transportation; and

(2) is fit, willing, and able to be a broker for transportation and to comply with this part and applicable regulations of the Secretary.

(b) Duration.— A registration issued under subsection (a) shall only remain in effect while the broker for transportation is in compliance with section 13906 (b).

(c) Experience or Training Requirements.— Each broker shall employ, as an officer, an individual who—

(1) has at least 3 years of relevant experience; or

(2) provides the Secretary with satisfactory evidence of the individual’s knowledge of related rules, regulations, and industry practices.

(d) Registration as Motor Carrier Required.—

(1) In general.— A broker for transportation may not provide transportation as a motor carrier unless the broker has registered separately under this chapter to provide transportation as a motor carrier.

(2) Limitation.— This subsection does not apply to a motor carrier registered under this chapter or to an employee or agent of the motor carrier to the extent the transportation is to be provided entirely by the motor carrier, with other registered motor carriers, or with rail or water carriers.

(e) Regulation to Protect Motor Carriers and Shippers.— Regulations of the Secretary applicable to brokers registered under this section shall provide for the protection of motor carriers and shippers by motor vehicle.

(f) Bond and Insurance.— The Secretary may impose on brokers for motor carriers of passengers such requirements for bonds or insurance or both as the Secretary determines are needed to protect passengers and carriers dealing with such brokers.

(g) Update of Registration.— The Secretary shall require a broker to update its registration under this section not later than 30 days after a change in the broker’s address, other contact information, officers, process agent, or other essential information, as determined by the Secretary.

If you noticed, the only place in this ruling pertaining to experience or training requirements for a freight broker is for an employed officer of the freight brokerage company. Pretty much a common sense rule to make sure that an officer of the freight brokerage has an idea of what they are doing.

Now, keep in mind that the entire section of the 49 USC 13904 is pertaining only to those that wish to obtain their own authority in order to operate their own freight brokerage company. No place in this ruling does it state that employees, agents, or other individuals working for a freight brokerage company have or be required to obtain training or even pass a test. To suggest otherwise is just wrong!

As a transportation and logistics consulting firm, we see this type of misinformation distributed all the time. More times than not by freight broker schools attempting to lure unknowing potential students to spend thousands of dollars to attend their school.

We believe that anyone considering a career as a freight broker (with their own authority) or freight broker agent should have the facts before making this type of a life changing decision. Feel free to call 800.582.4167 and speak to one of our consultants to have your questions answered with the facts and not a sales pitch.

Thanks, and have a great weekend.