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Risky Business

Update on Map-21

By Shelly Benisch, T.R.S., C.I.C.
Posted Jan 29th 2014 4:29AM

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Hi Everyone,

I promised an update on Map-21 in my earlier blogs.  There are now over 9,000 cancelled bonds and freight forwarder licenses for non-compliance.  What is the fine for arranging transportation without a license and a bond?  $10,000

You should know that Officers and Directors of an entity, and "Unlicensed Intermediaries" have an unlimited and unspecified Liability as well.

FFIT, the acronym for Fighting Fraud in Transportation is part of Map-21.  It was passed with the support of OOIDA, TIA and ATA to "ensure brokers' and forwarders' freight charge obligations to shippers and brokers are met."

Their concern was for carriers which were not being paid freight charges on transactional shipments which were "double brokered."

What's "double brokered"?

It's an intermediary who accepts shipment from a shipper or broker as a Carrier.

But he's done it without notice to his customer.  While acting as a Broker, he tenders the shipment to a Sub-Contracted Carrier who does not pay.

The $75,000 Surety Bond is supposed to alleviate some of those concerns.

The common practice of "Convenience Interlining" has now been outlawed.

What is "Convenience Interlining"?

A Carrier must have a distinct Broker for Forwarder Authority in his own name or in an affiliate and can only conduct those Broker operations under the authority in which that Bond is issued. 

So the Brokerage and Carrier Authorities should now be in separately named and distinguished entities.  This is different than what was recommended by some authorities in the past, with one MC number and one Entity name for both.

It may be best for Carriers to outsource freight through a Freight Forwarder, rather than a Broker Affiliate.

...more on that in my next blog.

Stay warm!  Shelly




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