May 17, 2020

One year after the freight broker bond increase: How to surge ahead

US logistics
road freight
4 min
Picture credit: Randy Heinitz/Foter/CC BY
Follow @SamJermy and @SupplyChainD on Twitter.Although its already been a year since the MAP-21 law came into effect, the freight broker industry is sti...

Follow @SamJermy and @SupplyChainD on Twitter.


Although it’s already been a year since the MAP-21 law came into effect, the freight broker industry is still adjusting to the changes. This law raised the required bond amount from $10,000 to $75,000 in addition to a variety of other modifications to industry regulations. The 1 October bond renewal date has just passed, but of course it’s still not too late to get your freight broker bond. So, let’s see how the industry is adjusting and how your business can take advantage of the situation.

The big question: How many freight brokers have left the industry?

The latest data from the FMCSA has a lot to tell about how MAP-21 is reverberating in the industry a year later. Of course, there are many ways to look at the information, so let’s take a few perspectives. From the doom-and-gloom vision of things, discontinued broker licenses spiked to over a hundred per week as the deadline to renew freight broker bonds approached in October 2014. So there’s no doubt that even a year in, the law continues to push some out of the market.

But that was, in fact, one of MAP-21’s intended effects. In theory, by pushing out brokers who may have been engaging in fraudulent behaviour, the law should help the industry, and truckers in particular, avoid falling victim to bad business practices. Of course it’s likely that not all freight brokers who left the industry in response to these new regulations were engaging in abusive practices, but it’s a potential silver lining if your business has been operating legally all along and now won’t have to compete with those who have not.

There’s also another very important perspective to be gained from the FMCSA data. While looking at the number of exiting freight brokers might be dismaying, looking at those numbers in the context of the entire industry changes things a bit. The number of active licensed brokers did decrease slightly in the last few weeks, but this decrease was in a year that saw significant increases.

In fact, over the course of 2014 only one week showed a net decrease in active licensed brokers, and then by only 66. So although many left the industry during 2014, those entering it still outnumbered them for all but one week. Contrast this to the year’s overall increase of 1653 active licensed brokers and you’ll see that the industry is still moving forward in spite of the changes coming from MAP-21. But what does all of this mean for you?

How to take advantage of these changes

Despite what you may initially think, there’s some good news for freight brokers in these developments. What all of this means is that while some of your competitors are leaving the market because they don’t understand their full range of options to meet the $75,000 financial security requirement, you can still comply with MAP-21 and possibly face less competition going forward.

Fortunately, even if you’re one of those brokers who was not able to renew their bonds before this year’s October 1st deadline, it’s not too late to obtain one and get your business up and running again. There are options available to help you avoid getting tripped up by this seeming obstacle. For example, if your concerns have to do with bad credit or upfront costs, keep in mind that you actually have two alternatives for obtaining your bond.

Besides the BMC-85 option, which involves committing $75,000 to a trust and paying a fee for this service, the BMC-84 bond is much simpler for smaller carriers. It only requires you to pay a small percentage of the total bond amount, which is based on your credit standing. This means it’s not nearly as difficult as it may seem to overcome this new legal requirement. So by obtaining the BMC-84 bond and avoiding the practices penalized by MAP-21, you’ll be in a great position heading into 2015.

What can you do now?

Taking a step back, growth in the industry is slowing down in response to the new federal requirements, but if you’ve got the right strategy to overcome them, this can play out to your advantage. So don’t get discouraged and be sure to look into all of your options, and remember, it’s not too late to get bonded and re-enter stronger than ever.

Author’s Bio:


Eric Halsey is a historian by training and disposition who’s been interested in US small businesses since working at the House Committee on Small Business in 2006. Coming from a family with a history of working on industry policy, he has a particular interest in the Surety Bonding and Freight Industries and Professional Certification, he loves sharing his knowledge of the industry for JW Surety Bonds.

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Jun 17, 2021

Cainiao Network Launches Customer-Centric Logistics

3 min
Cainiao will focus on the customer experience in Singapore and Malaysia during its Tmall 618 Mid-Year Shopping Festival

As the logistics division of the Alibaba Group, Cainiao Smart Logistics Network has decided to provide its Southeast Asian customers with unsurpassed service during its annual shopping festival. Based on customer feedback surveys, the company will expand its real-time customer service support and speed up delivery times. ‘By expanding and deepening our services, we aim to provide a stronger logistics infrastructure that can bolster the booming eCommerce sector, support merchants’ expansion into new markets and diversify retail options for consumers’, said Chris Fan, Head of Cross-Border, Singapore, Cainiao Network.


Who Is Cainiao? 

According to TIME Magazine, Cainiao ‘is far from a typical logistics firm’. The company controls an open platform that allows it to collaborate with 3,000 logistics partners and 3 million couriers. This means that merchants can choose the least expensive and most efficient shipping options, based on Cainiao’s real-time logistics analytics. The company’s goal is to ship packages anywhere in the world in under 72 hours—and for less than US$3.00. 


For countless small business owners around the world, from coffee-growers to textile-weavers, this could change everything. Usually, it costs about US$100 to ship a DHL envelope from Shanghai to London in five days. Cainiao aims to change that. Said its CEO Wan Lin: ‘The biggest barrier to globalisation is logistics’. 


What’s Part of the Upgrade? 

Throughout the Tmall festival, Cainiao’s logistics upgrade will be divided into four critical segments: 


  • Real-time customer service support. Cainiao has launched a direct WhatsApp channel for customers to receive logistics updates and ask questions. 
  • Expansion of air freight parcel size and weight limits. Packages can now be up to 30 kilograms or 1-metre x 1.6 meters to help ship large items such as furniture. 
  • Daily air and sea freight connections. Shipping frequency will almost double to seven times weekly to maintain resilience and efficiency. 
  • Compensation for lost or damaged packages. Customers will be reimbursed up to RMB 2,000 (US$311). 


Where is the Company Headed? 

From June 1st to June 20th, the finale of Tmall, Cainiao will ensure that its customers feel confident in the company’s ability to deliver their packages. Despite global shipping delays due to COVID, the show will go on. Said Fan: ‘This series of customer-centric logistics upgrades reaffirms our goal of pursuing value-added services to enhance customers’ shopping experience while mitigating challenges posed by external factors’. 


Furthermore, Cainiao has recently expanded its Southeast Asian operations, achieving revenue growth of 68% year-over-year. In Malaysia, the logistics operation has partnered with BEST Inc. and Yunda; in Singapore, the company has partnered with Roadbull, Park & Parcel, and the Singapore Post. And if its recent measures help retain and grow its customer base, the company will be well-poised to lead the industry in resilient and customer-centric global logistics. ‘COVID-19 made everyone realise how important the logistics infrastructure backbone is’, said Wan. ‘And it gave us a peek at what Cainiao should look like in three years’. 



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