BROKERSASSIST.COM

Comments on H.R. 7/Sec 6203 Registration of Freight Forwarders and Brokers

1517 West Garden Street, Pensacola, FL  32501

Ph: (850)433-2294 FAX (850)438-1414

Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

This Act is also called the American Energy and

Infrastructure Jobs Act of 2012

 

I would like to call attention to this portion of this House Bill, which in my opinion will drastically alter the face of motor carrier transportation in the United States in several ways.

 

First, this proposed law affecting transportation is unrelated to the main purpose of this bill as it is a transportation matter which involves neither energy nor the infrastructure and deals only with a regulatory matter.

 

This provision is buried on page 547 of this large bill in order to hide this important matter from those affected by its passage.

 

This cleverly disguised measure could never be passed if it were a stand- alone bill designed by TIA which represents large brokers with revenues will over a million dollars a year.

 

This is an attempt to corner the market on the transportation market by discriminating against small brokerage firms not able to obtain a $100,000

Surety Bond or Trust Agreement.

 

My partner, Marold Studesville and I are in the business of supplying small start-up brokerages with a $10,000 Trust, referred to as a BMC 85 by the FMCSA, a department of the USDOT.

 

The majority of new applicants are African-American women and other minorities.  These people are trying their best to be financial responsible and in some cases avoid falling into welfare.  They, too, wish to be productive citizens of this country.  The BMC 85 Trust Agreement was initiated due to the fact that surety companies have stringent financial policies requiring a broker to be in business one year or more and being able to show extensive financial records.

 

If allowed to become law, this bill will deny an entire class of citizens the opportunity to attain financial stability.  This bill will make it impossible to start a business for a small sum of money.  In these tough economic times, this bill will only make things harder for people to stay off of welfare.

 

At this point, only a nominal investment is needed to start a small brokerage.  Many wanting to enter into the brokerage business are truck drivers themselves who want the opportunity to become business owners.

 

This Bill directly contravenes Public Law 104-88 Dec 29, 1995

109 STAT 853

Chapter 131-General Provisions

 

Sec 13101. TRANSPORTATION POLICY

(a) In General:

(1) In overseeing those modes-

(j) Promote greater participation by minorities in the motor carrier system;

(See attachment)

 

What Do Property Brokers Do?

 

The majority of goods transported in the U.S. are carried by independent owner operators known as contract or common carriers.  In most cases the trucker owns a semi-tractor and a trailer.  Each year, approximately 18,000 new owner operators are granted licenses.

 

Small carriers (truckers) are not able to find freight to transport without the aid of Property Brokers.

 

The TIA is made up of large brokers with revenues of several million dollars per year or more.  This bill would force small brokers out of the market as it would compel the small carrier to carry freight at very low rates (take it or leave it) due to the purchasing power of these large brokers.

 

The reality of business is that large companies deal with large companies and small with small companies.  For example, a small broker would find it difficult to contract with a large shipper such as Wal-Mart or GE.

 

Small brokers deal with small or mid-sized manufacturers and in turn supply freight to small trucking firms and owner operators.

 

The OOIDA also supports these changes in the law, due to the fact that there are unscrupulous brokers and scam artists.  However, dealing a larger brokerage does not guarantee against dishonest business practices.

 

 

In the end, the owner operators will suffer most.  Basic economics shows us that many small carriers will be forced out of business because they cannot compete with the low rates dictated by the larger brokers. Finally, when dealing with a broker, carriers both small and large have more of a guarantee of being paid by that broker.  That guarantee diminishes when dealing directly with the shipper for payment.

 

The broker is the third party to the movement of freight.  The broker is paid by the shipper and then is liable for payment to the carrier.

 

Please consider the harmful effect of H.R. 7 on the segment of the population that has suffered most in these recent years.  They deserve our help, not a road block to the American Dream.

 

Submitted by:

 

Thomas B Guthrie

Pensacola, FL 32504

850-433-2294