It is now one year later and the result are mixed. There is definitely less risk of a carrier being scammed on a broker payment, but the small operators are still in the market operating as a sub broker for a larger brokerage. The higher bond requirement has created an opportunity for brokers to basically rent their license.
Here's how it works: As an auto hauler we contact a lot of freight brokers through Central Dispatch. Let's say we're looking for cars to fill a truck that's running between Cleveland and Philadelphia. Our search results show a listing for a 2007 Camry by Anybody freight logistics at a decent rate paying COD. In order to book the load we need to call their dispatch phone, but the listing shows a different phone number than the broker's phone number and instructions to call Jose for dispatch.
Why are we calling Jose to book this load on a phone number that doesn't
even have the same area code as the broker? Because Jose, who is not a freight broker and not a auto dealer, has an arrangement with Anybody freight logistics to post vehicles on central dispatch. The impact of the higher broker bond rates has been successful in reducing the number of licensed freight brokers, but at the same time has created a secondary and chaotic "black market" for auto shipments. So government regulation once again fails. The rats just found another hole to operate from and created an additional income stream for the remaining licensed brokers.
Next installment: managing "sub broker"or "black market" auto shipments.