MAP-21? Or, More Accurately, RIP-21?

Remember when SI asked if your supply chain was compliant with MAP-21 last fall (on Oct 17 and Oct 18) and pointed out, in bold, section 32918 of the new Commercial Motor Vehicle Act Safety Enhancement Act: Subtitle 1 which states that each broker subject to the requirements of this section shall provide financial security of $75,000 for purposes of this subsection, regardless of the number of branch offices or sales agents of the broker? It did this because it knew this would be a big problem. However, even SI could not have predicted the damage this has caused.

As per a recent article over on Bulk Transporter, 9,800 freight transport brokerages [were] forced to close during December which represented over 46% of the independent broker market! 46%! On December 1, there were 21,080 independent brokers. Today, there are 12,996. So, even though a few new ones opened and a few existing ones eventually managed to raise the money required for the bond (and re-opened), the number of independent brokers is still down almost 40%!

SI agrees that this is indeed a crisis for the independent freight industry and for American consumers and manufacturers, as costs will rise for virtually all goods shipped within the United States. This requirement presents independent brokers with an unreasonable, and in many cases, insurmountable barrier and virtually guarantees that only multi-nationals will be able to participate in what should be a free logistics market. 10K might have been too low, but it should be up to the merchant to decide if the bond put up by the carrier is enough or not. If all you are shipping is low cost consumer purchased goods or packaging material, a 10K to 25K bond is more than enough. If you are shipping smartPhones, you probably want the carrier to put up a 100K bond. If the market really is free, small and mid-sized business should have a choice. But now they don’t.