FoxNewsFederal fee hike putting thousands of freight brokers out of business, industry says
By M.D. Kittle
Published March 31, 2014
Americans fork over $1.75 trillion each year to comply with federal regulations, according to estimates from the Small Business Administration Office of Advocacy.
Thousands of independent freight brokers and agents nationwide will tell you the immediate cost is deadly.
A new provision in the federal transportation bill jacks up the surety bonds that freight brokers and forwarders must pay from $10,000 to $75,000.
Since its rollout last fall, the provision -- which critics allege was slipped into the massive transportation bill and greased by the massive contributions of interests representing the mega freight brokers -- has forced more than 7,500 active property brokers to shut down as of March 14, according to the Association of Independent Property Brokers and Agents.
The association claims there were 21,565 brokers on Oct. 1. Nearly six months later, the industry has shed about 36 percent of its players, a loss that will hit consumers and the U.S. economy in the pocketbook, according to the association.
James Lamb, president of the Boca Raton, Fla.-based group, says the steep increases in bond costs to ensure freight delivery is just too much for a lot of small businesses to bear.