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Every year, freight broker bond renewal deadlines for many brokers fall in early October, and a number of others follow in November and December. This typically means a lot of work for sureties and the Federal Motor Carrier Safety Administration (FMCSA) - which can create delays. In order to make the deadline brokers are advised to renew as early as possible.
1. Remember the deadline. If you tend to forget deadlines, make sure to be reminded of this one because missing it can create difficulties for your status as a licensed freight broker. Typically sureties will remind their clients well in advance of a bond renewal deadline — often once within 90, and then within 60 and 30 days of the deadline.
If you haven't received notice of your surety, play it safe by double-checking your bond expiration date. If you operated as a freight broker in or before 2013, it is highly likely you will need to renew your bond in October or latest by December 1.
2. Renew early to avoid delays. While you should renew your bond no later than 30 days before its expiration date, it's much better to renew earlier. With so many brokers having to renew their bonds around the same time, delays can and often do occur.
Due to the FMCSA's requirement that sureties notify it 30 days prior to a bond's expiration, things can sometimes get complicated for brokers who renew in the last minute. To avoid delays and complications, strive to renew your bond as soon as you get notified by your surety or, roughly, between 60 and 30 days prior to its expiration date.
3. Improve your credit score to improve your rate. Generally, if you want to get a better rate on your bond, you need to make improvements in one or more of the various factors that influence bond cost. The most important such factor is your personal credit score. By regularly making improvements there, you can expect a year-over-year improvement in your bond premium as well.
This year in particular, your credit score is likely to improve on its own. As of July 1, tax liens, civil judgments and other civil debts have been excluded from credit reports. As a result you are also likely to see a lower premium on your bond. To be sure that any negative items have been removed from your credit report, contact a credit report to get your free yearly report.
4. Check your bond premium before you renew. Bond cost can vary from one year to the next. Typically, the cost of your freight broker bond is determined by your surety when you apply. Your surety considers your credit score, your financial statements as well as other personal financials in determining your premium.
If you've improved your credit score but haven't seen much of an improvement in your rate or are generally unhappy with your bond cost, you could request a quote at another surety agency for comparison. When requesting a quote at another surety, make sure you choose an agency that performs soft pulls of your credit. Each hard pull negatively affects your credit.
Apart from renewing your freight broker bond, you may also need to update your information with the FMCSA. While the Administration's intent was to launch the Unified Registration System (URS) this year, this has been executed only in part. Currently, only first-time applicants with the FMCSA can use the URS to complete and submit their application, including the submission of all relevant documents and forms.
For brokers who are already registered, updating your information or submitting forms is for now limited to the processes and procedures that were previously already in place. The FMCSA has rescinded its initial projection for the roll-out of the second phase of the URS, though it has not abandoned the project itself. This is not directly related to surety bonds, as sureties post their clients' bonds electronically with the FMCSA but concerns any other forms you may be required to submit.
In other news, freight brokers who have not yet begun preparing for the new requirements of the FDA for transporting food and animals should take notice. The Final Rule on Sanitary Transportation of Human and Animal Food which came into effect for the biggest carriers, shippers, loaders and brokers on April 6, 2017 will come into effect for the rest of the industry on April 6, 2018. Brokers need to align themselves with these requirements as, according to the rule, they are considered equivalent to shippers when it comes to such transportation.
To help businesses meet the requirements of the rule, the FDA has provided a number of resources on its website among which is the Technical Assistance Network (TAN). The TAN includes information on all central questions related to the implementation of Food Safety Modernization Act (FSMA). Brokers who cannot find the answers to their questions, can submit such questions to the TAN.
Todd Bryant is the president and founder of Bryant Surety Bonds.
Source: Bryant Surety Bonds
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