This is information you should digest, please read the below e-mail drafted by my head of risk management to an insurance agent whose client has freight forwarding authority in place and is contracting motor carrier under this authority, MAP 21 could really have a negative impact on the entire freight forwarding industry.

You are frankly one of the few freight forwarders that was smart enough to set up a separate company for freight broker operations and I believe in your business model you are contracting (all?) motor carriers through this operation?

This action greatly reduces your exposures but be aware you are going to be forced by this BS legislation to purchase a $75,000 to $100,000 bond for your freight forwarding operation and this bond can not only be called upon by motor carriers in an effort to collect disputed freight bills but can also be called upon to reimburse 3rd parties for cargo claims and or 3rd party claims for bodily injury claims when trucker’s contracted by freight forwarder!

Surety isn’t insurance, if your surety is forced to pay a cargo claim or 3rd party bodily injury claim under the new BMC84 bond limit which will be either $75,000 or $100,000 you will have to reimburse the surety, the legislation is so draconian there are severe penalties for surety companies even to challenge a claim, end result lots of claims will be paid by them and you will be forced to reimburse the surety under the indemnification provisions of these bonds.

Worse there will hardly be any sureties willing to write the bond which may require 100% collateral in form of cash or letter of credit.

I plan on approaching all of the major freight forwarding associations to raise their member’s awareness of this issues present for them, I’m thinking a webinar that goes into detail on the issues present within this legislation and impact on the freight forwarding industry should be structured which will presented to the interested membership.

I think actions should be taken to overturn the bill by the freight forwarding industry as it has the potential really be a nightmare on many fronts.

My goal will be to mobilize the industry if possible to invest in some lobbying efforts to have the bill struck down, it’s also a job killer.

Your thoughts in due course would be appreciated.