Truck broker sets standard for bond coverage

Truck broker sets standard for bond coverage    RFX Inc. in Avon, Mass., has become the first truck broker to purchase a $250,000 performance bond through the Transportation Intermediaries Association, setting the standard for conveying financial stability to freight customers, the third-party logistics organization said.
   TIA offers higher bonding capability through its Performance Certified Program, which is designed to demonstrate to shippers, motor carriers and logistics providers that its members are dependable businesses that operate according to high standards. The program was initiated to meet shipper demands for higher levels of bond protection and to separate TIA members from the perception of unscrupulous brokers that don't make prompt payments to carriers, never make payments or go out of businesses without the ability to fulfill claims.
   Under U.S. Department of Transportation rules, brokers are required to take out a $10,000 performance bond to conduct business. The small bond amount is considered too small to effectively compensate shippers, suppliers or carriers for any damage claims resulting from a broker exiting the market.
   TIA helps companies obtain larger bond amounts underwritten by Avalon Risk Management. Bond coverage is available to companies that meet risk criteria for $25,000, $50,000, $100,000 and $250,000 at an annual fee ranging from $850 to $3,350. Once the $10,000 bond is exhausted parties file claims against Great American Insurance Company through Avalon.
   'For the past two years, we've maintained a total surety bond of $100,000. Surprisingly, we still come across shippers and carriers with negative opinions toward the use of transportation brokers, so we decided to secure the $250,000 surety bond,' RFX President Jim Morse said in a statement.