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馃榾馃挜Freight Broker Surety Bond...10 BIG Tips馃挜馃榾 - YouTube
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so in today's video I'm gonna share some
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important information about the freight
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broker surety bond that will help you
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make the best decision as it pertains to
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acquiring a bond here's what you'll
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learn number one what is a surety bond
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number two who must obtain a surety bond
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number three what type of bond is
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required for freight brokers number four
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what is a BMC eighty four number five
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what is a BMC eighty five and number six
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what factors determine your bond price
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number seven how much you should pay for
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a surety bond number eight should you
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renegotiate your bond after the first
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year number nine what is a indemnity
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agreement and number ten which bond
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provider should you choose so let's get
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started if this is your first time here
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this channel shares the challenges and
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successes of small business ownership
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through the eyes of a freight broker if
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you're interested in learning more about
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the freight broker business or perhaps
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you're considering another small
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business and want to know what it's
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really like to be a 24/7 entrepreneur
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then you're in the right place subscribe
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to my channel for weekly videos released
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on Mondays about overcoming the
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challenges of a freight broker business
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and winning and small business owners we
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believe and starting small and growing
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big and if you'd like to content please
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smash that like button and share the
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video with your network don't forget to
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hit that notification mill to be
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notified every time I release a new
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video the freight broker surety bond is
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one of the most important decisions
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you'll make when starting your fragrant
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business the surety bond is required by
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the FMCSA for freight brokers to receive
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a motor carrier Authority and then
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bonding process can be very confusing
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especially if you've never gone through
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the process before so today I'm gonna
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answer ten common questions about the
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freight broker surety bond to help you
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navigate the process with ease let's get
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into the business so number one what is
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a surety bond the freight broker surety
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bond protects the shipper and the motor
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carrier by ensuring the freight broker
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follows the rules set by the Federal
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Motor Carrier Safety Administration for
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example
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the freight broker fills a pair carrier
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in a timely manner the carrier may file
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a claim against the freight broker
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surety bond to ensure that he or she
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gets paid freight brokers are required
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to obtain at least $75,000 in coverage
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they're moving ahead for progress bill
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also known as map-21
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introduced by President Obama's
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administration increase the bond
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requirement coverage from $10,000 to
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$75,000 in an effort to reduce the
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sketchy characters that were starting
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freight broker businesses moving loads
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and not paying carriers so number two
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who's required to obtain a freight
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broker surety bond all freight brokers
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regardless of size are required by the
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FMCSA to obtain a freight broker surety
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bond to legally broker Freight in the
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u.s. freight brokers usually send a copy
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of their motor carrier Authority and
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their bond certificate to shippers to
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show that they have the authority to
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broker Freight number three what type of
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bond is required for freight brokers
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freight brokers have two options when it
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comes to surety bond they may choose
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between the BMC 84 or the BMC 85 the
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broker must decide which option is the
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best fit for their freight brokerage so
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what is the BMC 84 the BMC 84 is a bond
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that guarantees that the freight broker
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will adhere to the federal regulations
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and pay carriers in a timely manner this
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guarantee on your behalf is considered a
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form of credit extended to you for which
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you pay a percentage of the bond amount
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since you don't need to put up any
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collateral for the bond this frees up
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working capital improves liquidity and
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helps you to operate a more efficient
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and financially sound business so what
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is the BMC 85 the BMC 85 is a trust fund
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the most noticeable difference between
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the BMC 84 and the BMC 85 is you the
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broker must put up $75,000 in cash to
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fund the trust and you won't have access
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to the funds for the duration of the
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bond this option is more common among
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large brokers and carriers and in
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addition to the $75,000 collateral
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there's also an annual fee usually about
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$1,500 this is not usually the best
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choice for startups due to the large
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upfront cost number six what factors
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determines surety bond price your bond
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rate will be based on a number of
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factors including your credit
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a bond required and your experience in
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the industry new brokers bond price will
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be largely based on personal credit the
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better the credit the more negotiating
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power one has if your credit is bad
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I suggest repairing your credit first
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before applying for a bond number seven
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how much should you pay for a surety
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bond surety bond prices can range from
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seven hundred and fifty dollars all the
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way up to nine thousand dollars a year
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in my opinion a new freight broker
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should not agree to pay more than thirty
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five hundred dollars annually one of the
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most critical tasks that can ultimately
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determine success or failure is
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controlling your overhead or your cost
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to operate your brokerage this starts
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with your bond price number eight should
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you renegotiate your bond after the
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first year in my opinion absolutely
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remember as a business owner you should
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always be seeking ways to decrease your
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overall cost to operate a lot can change
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during a year the credit score may
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increase and this could substantially
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decrease your overall bond rate I
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suggest meeting with your bond provider
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annually just to see if you can get a
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better rate number nine what is an
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indemnity agreement an indemnity
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agreement is a serious obligation that
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could cause you financial harm it's a
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legally binding agreement stating you're
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responsible to pay claims caused by you
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up to the full bond amount if you caused
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a claim on the bond your corporate and
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personal assets can be used to pay it
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this is why it's imperative to avoid
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claims at all cost you cannot get a
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surety bond without signing an indemnity
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agreement and number ten which bond
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provider company should you choose bond
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providers are not created equally a
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surety bond is worthless without strong
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financial backing however keep in mind
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you're still responsible for paying a
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surety bond company back in the event of
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a claim so how do you even need a surety
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bond if you have to pay for the bond and
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repay the bond provider when a claim is
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paid why do you need it simple because
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the FMCSA makes it a requirement for
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freight brokers to have a surety bond to
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legally broker Freight my surety bond
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rate is about a thousand dollars per
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year now but keep in mind I've never had
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a claim filed against my bond
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five years of experience and an eight
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hundred plus credit score if you'd like
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to contact my provider to get the best
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rate for your brokerage just come
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yes in the comments section below and
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send me an email to info at Alliance
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logistics net and I'll send you my bond
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reps name and contact information
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in conclusion freight broker surety bond
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rates can vary depending on your
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personal financial situation experienced
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in the industry and your bond provider
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if you know you have slower bad credit
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you may want to address your credit
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issues first before actually applying to
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make sure that you get the best rate a
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surety bond does not alleviate you from
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the responsibility of paying a claim you
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must pay the surety bond provider back
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up to the total amount of the bond
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coverage this is why getting the best
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rate and avoiding claims are critically
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important to the success of your freight
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brokerage I hope this information was
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helpful if you want to learn more about
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the freight broker business go to my
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website at www.att.com/biz I number one
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setup loes to be moved number to talk
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with shippers and carriers about load
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movement number three show you all the
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paperwork required to move a load from
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point A to point B and number four
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execute the movement and get paid lots
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of people are talking about how freight
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brokers move loads and make money but
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I'm the one who's showing you how it's
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done
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from start to finish for free so don't
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miss out register at wwr andin the
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freight broker comm for how the load
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movement process works now for more
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videos about the freight broker business
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check out my playlist here it'll be here
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or here somewhere
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thank you for spending some of your time
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with me today I wish you well and all
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that you endeavor to do see you at the
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top because the bottom is much too
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crowded
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