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All Transportation Service Providers (TSP) should be aware of the requirements for an SDDC bond when handling and transporting freight for the military. This essential financial assurance is mandated for businesses that provide any form of SDDC freight movement support.

What is an SDDC Bond?

The Military Surface Deployment and Distribution Command (SDDC) requires a surety bond of all TSPs who wish to transport Department of Defense (DoD) freight. Also known as a Department of Defense performance bond or a DoD performance bond, the SDDC bond provides assurance that the contractor will perform and complete the work as detailed in the contract. A bonded TSP who fails in their duties is held financially liable for repaying any funds received as payment. The bond ensures that taxpayers' money is not wasted on unfinished or sub-par contracts.

According to the DoD, TSP who require an SDDC bond include:

  • Freight Carriers
  • Freight Brokers
  • Logistic Companies
  • Freight Forwarders

The purpose of the SDDC bond is to provide a form of guarantee that a TSP's obligations to deliver DoD freight will be fulfilled. The performance bond covers all cases where the TSP cannot or will not deliver cargo the TSP is responsible for. A performance failure may include abandoned shipments, default, or carrier bankruptcy.

The SDDC bond was first known as an MTMC bond and still may be referred to by its original name. However, the Military Traffic Management Command (MTMC) was renamed the Military Surface Deployment and Distribution Command (SDDC) in 2004.

How Does a DoD Performance Bond Work?

As with other types of surety bonds, an SDDC bond involves three essential parties:

  • The Principal – The principal is the bonded TSP who will transport SDDC freight.
  • The Obligee – The bond's obligee is the entity that mandates the bond, in this case, the SDDC.
  • The Surety – The surety is the insurance company that underwrites the bond and pays out money for valid claims.

A DoD performance bond provides assurance that the contracted TSP will fulfill all the requirements of the contract and deliver the SDDC freight appropriately. In the event of a failure, the obligee will file a claim against the bond. At that point, the surety fully investigates the allegations, the contract, and the surrounding circumstances. Any valid claim is promptly paid in full, up to the full value of the bond. Then, the surety will seek repayment of the disbursed funds from the SDDC bond principal – the TSP.

Who Needs to Obtain an SDDC Bond?

Any freight carrier company that seeks to provide military freight transportation must acquire an SDDC bond. The experts at Viking Bond Service stand ready to guide you through the bonding process.

What Are the Requirements for an SDDC Bond?

There are four required steps to obtaining an SDDC bond:

Step 1 – Acquire a Standard Carrier Alpha Code (SCAC)
Any transport service provider who seeks to carry DoD freight is first required to obtain a SCAC number. This is a unique, two to four-digit code that identifies your transport carrier. It is supplied by the National Motor Freight Traffic Association (NMFTA). You can apply online or by mail.

Step 2 – Establish an Electronic Payments Account
Next, contact the U.S. Bank Freight Payments to establish an account. This enables you to accept electronic payments for your services.

Step 3 – Become PowerTrack or Syncada Certified
This free online registration enables shippers and carriers to coordinate online to manage transportation issues.

Step 4 – Complete an SDDC Registration Online
SDDC registration requires that you have already registered with SCAC and Syncada.

SDDC bond requirements involve multiple steps, but the process is straightforward. We recommend getting the process started as soon as possible. The underwriting typically takes into consideration business and personal financials. To begin the bonding process, a surety bond application and credit check are required. A Viking agent will guide your step by step through the SDDC bonding process and let you know exactly what is needed to get the best quote for your specific SDDC bond request. Viking provides a quick turnaround on SDDC bonds.

How Much Does an SDDC Bond Cost?

DoD performance bond or SDDC bond costs depend upon the size of the bond and the principal's credit history. SDDC bond amounts vary depending on the type of TSP registering, the company size, and the number of states to be serviced. Typically, freight brokers, logistics companies, and freight forwarders will be required to get a $100,000 performance bond. Freight carriers will need either a $25,000, $50,000 or $100,000 performance bond. The SDDC provides guidelines on which bond amount is required for each registering TSP.

SDDC bond applicants with sterling credit will pay a lower premium than those with problematic credit. However, a low credit score is not a barrier to becoming bonded. Viking Bond Service has a poor credit surety bond program designed to help you to become bonded for the lowest possible cost.

Request a Free SDDC Bond Quote Today

If you need an SDDC bond, Viking Bond Service professionals are here to guide you through the process. Please fill out our online application, or call us at 1-(888) 2-SURETY (1-888 278-7389), today. We'll be happy to answer your questions and get you a competitive quote fast. We look forward to being your surety partner.

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