During his career, 7-foot-1-inch basketball legend Wilt Chamberlain was jeered by fans and scorned by the media, despite achieving numerous NBA all-time records. He is the only player to score 100 points in a single NBA game and the only player to average at least 30 points and 20 rebounds per game in a season, a feat he accomplished nine times!
So, why was Chamberlain often loathed instead of loved? As he put it: “Everybody pulls for David, nobody roots for Goliath.”
When it comes to the surety bond provision in MAP-21 (Moving Ahead for Progress in the 21st Century) which takes effect on October 1st, I am definitely one of the guys jeering Goliath. The purpose of the surety bond is to pay carriers if a broker should go out of business. Currently the surety bond requirement for a broker is $10K, but on October 1, it jumps to $75K.
This change has no bearing on our company; Matchmaker Logistics has voluntarily maintained a $100K bond for years, something we can afford because we have an excellent credit rating and we move enough freight to make the cost per shipment relatively small.
But for the “little guys”, the “Davids” in the brokerage business, a $75K bond could be crippling. There are a lot of small brokerage firms and trucking companies that broker a very small number of shipments per year, and the cost of the increased surety bond will make brokering non-viable for many of them.
The brokerage industry Goliaths (who run billion dollar companies) have the same exact surety bond requirement as 1-person operation. As the $75K bond drives small brokers out of business, we will concentrate more of the market into the hands of the large brokers thereby giving them more pricing power over carriers. I view this bond requirement as anti-competitive legislation.
In fact, I question why bond requirements are legislated at all. If you want to extend someone (a broker or any other entity) credit, then check their credit report and references and set limits accordingly. And, I wonder why brokers are singled out for surety bonds when hiring trucks; shippers who hire trucks directly are not required to do so.
I believe in the free market and I wish the government would stick to building roads and let business people operate with minimal interference. Goliath may win this round, but don’t count out the ingenuity and tenacity of the little guys. It reminds me of a joke:
A small, quiet man was sitting at a sports bar minding his own business when all of a sudden a big dude comes in and–WHACK!! The big guy knocks the little guy off the bar stool and onto the floor and says, “That was a karate chop from Korea.”
The little guy is stunned, but he quietly gets back up on the bar stool only to sustain another sudden–WHACK!! The big dude knocks him down again and says, “And, that was a judo chop from Japan.”
The little guy gets up, brushes himself off, and leaves without a word. An hour later, he returns. Unnoticed, he walks up behind the big dude and–WHAM!!! The little guy sends the big dude sailing off his stool, knocking him out cold! He looks at the bartender and says, “When the bully gets up, tell him that was a Slugger from Louisville.”
Take your best shot this weekend,
~Bob
