Higher Barriers to Entry for Auto Transport Brokers

If you’ve ever tried getting your car shipped, then you know that the competition is fierce. And while competition isn’t a bad thing per se, it certainly can be in some contexts. Case in point is the auto transport industry. There are over 1,000 active auto transport brokers in the US, and the vast majority of them are less than a year old. The reason why there are so many brokers is because the barriers to entry in this field (namely a $10,00 surety bond) are relatively low. But changes in the regulation of freight brokeraging now require brokers to hold  a substantially higher bond, which should have the effect of pushing out some of the smaller, less experienced, and, dare I say, less professional brokers. Other costs of operation will increase as well, putting the squeeze on the smaller guys. So as a customer, you can expect a more friendly and professional sales experience, which is certainly a welcome change. The change was made Oct 1, 2013. However, FMCSA gave a 2 month grace period so as of Dec 1, 2013 everyone had to have the 75K bond in place. This was do to the massive fraud that was happening in the industry to customers and also carriers. American Transport is both a carrier and broker.

 

Higher Barriers to Entry for Auto Transport Brokers