How to Get Started in Military Freight with ARTRANS Performance Bonds

Why the Military Freight Market Matters

The military freight market is one of the most stable and high-volume opportunities in the transportation industry. At the center of this market is the U.S. Army Transportation Command (ARTRANS), formerly known as the Military Surface Deployment and Distribution Command (SDDC). ARTRANS oversees the global movement of military equipment and supplies by surface transport, managing everything from trucks and rail to port shipments.

Benefits of Working with Military Freight 

For transportation companies, military freight offers unique advantages. Once in, your company gains access to a consistent, reputable stream of freight opportunities backed by the U.S. government. Maintaining your ARTRANS bond is worth it if your goal is long-term, stable growth. Beyond the financial appeal, hauling military freight builds credibility. Consistent performance with military contracts helps position your company as a serious player in government contracting.

What is the ARTRANS Performance Bond?

The ARTRANS Performance Bond is required for doing business in the military freight space. Without this bond, carriers and brokers cannot bid on or move ARTRANS loads. Although some specialized transporters such as rail, ocean, or air carriers are exempt, trucking companies must carry this bond to qualify.

Understanding How the Performance Bond Works

An ARTRANS performance bond is a three-party agreement designed to protect the U.S. government. The principal is your company. The obligee is the government. The surety is the company that issues the bond. 

This bond is not insurance. Rather than covering losses, it guarantees that you will meet every obligation of your contract. If you default, the surety pays the government, then you are responsible for reimbursing the surety.

The Importance of ARTRANS Performance Bond for Government 

The bond gives the Department of War, also referred to as the DoW and formerly known as the Department of Defense, or the DoD, financial recourse if a contractor fails to deliver. It ensures that military freight is transported securely, on schedule, and in full compliance with all contractual terms. The bond acts as a safeguard against disruption or failure to perform and is one of the government’s primary risk management tools in logistics.

Where to Find a Reputable ARTRANS Performance Bond 

While many companies offer surety services, very few specialize in transportation. PFA Transportation Insurance & Surety Services is a one-stop-shop for freight professionals. We help freight brokers and forwarders stay compliant. With over 25 years’ experience in the industry, PFA is the leading provider of surety services for transportation, including ARTRANS performance bonds (Formerly called an SDDC Performance Bond). 

How Much Does an ARTRANS Performance Bond Cost?

The actual cost to you is the bond premium, which is the annual fee paid to the surety company. The required bond amount is tied to the size of the contract you’re bidding on and is typically listed in the solicitation documents. It’s often a percentage of the total contract value. 

What Influences ARTRANS Performance Bond Fees?

This premium is based heavily on credit. Businesses and owners with strong credit may pay as little as 1.5 to 3 percent of the bond amount. Those with average credit might pay three to five percent, while those with poor credit could face rates as high as 10 percent – or even be denied. Sureties also consider other factors, including your company’s financial statements, operating history, industry experience, and past claims.

What Does the Bond Actually Guarantee?

The bond guarantees your company’s faithful performance under ARTRANS contract terms. This includes timely pickup and delivery, compliance with Department of War regulations, and meeting all security and safety standards. It’s important to note that the performance bond is not a substitute for cargo insurance. You are still required to maintain active cargo insurance that meets ARTRANS coverage minimums. PFA Transportation Insurance and Surety Services can assist with both cargo insurance and performance bonds, along with other important coverages to keep your freight business compliant. Contact us to request a quote.

If your freight company fails to perform and a claim is filed, the surety will investigate. If the claim is valid, they will pay the government up to the full bond amount and then pursue repayment from your company. A claim can significantly damage your ability to secure future bonds, potentially shutting you out of the military freight market.

Who Needs an ARTRANS Bond?

Freight brokers and motor carriers who want to bid on military tenders through ARTRANS are required to carry the bond. To be considered for the bond, companies must meet several prerequisites, such as:

• $150,000  in cargo insurance for general freight,
• $25,000 in cargo insurance for bulk fuel carriers, and
• Maintaining a satisfactory safety rating with the FMCSA or relevant state agency.

See the full list of requirements on the official U.S. Army registration packet.

Key Factors in Qualifying for a Performance Bond

Like most financial agreements, applicants are assessed for many factors. This includes your company’s operating history, industry experience, and past claims. These are all important for your application, but ultimately the fee for a DoW Performance Bond is heavily based on credit. 

Strong financial health is essential. Applicants must be able to show steady business records with positive cash flow and clean balance sheets. Most will expect at least two to three years of operating history. Both business and personal credit scores are evaluated, and weaker credit profiles often result in higher premiums or flat-out denial. 

The ARTRANS Bond Application Process

Get started with these six easy steps:

Step 1: Prepare Your Financial Documents

Gather all required financial paperwork, including two to three years of business and personal tax returns, a current profit and loss statement, and a business debt schedule. Review your credit reports for errors and correct any errors before applying to strengthen your financial profile.

Step 2: Compile Corporate Information

Provide your company’s legal documents, such as articles of incorporation or your operating agreement. Some sureties may also request a business plan or a resume that outlines your logistics or transportation experience.

Step 3: Work with a Specialized Bond Broker

Submit your application through a bond broker who specializes in transportation bonds. These brokers are familiar with ARTRANS requirements and can connect you with A-rated sureties qualified to issue these high-risk, high-value bonds. Our team at PFA is ready to help. In addition to helping you stay compliant for military contracts, we work with you to find the best coverage for your business.

Step 4: Receive and Review Your Bond Quote

Once your application is approved, the surety will issue a bond quote and the final bond paperwork. Carefully review these documents to ensure all information is accurate.

Step 5: Submit Your Bond and Sign the Indemnity Agreement

Include the bond with your ARTRANS bid submission. You’ll also need to sign an indemnity agreement, which is provided during the onboarding process, to confirm personal responsibility for repaying the surety if a claim is filed.

Step 6: Maintain Ongoing Compliance

Keep the bond active for the entire duration of your ARTRANS contract. ARTRANS performs regular compliance checks, so ensure all renewals and financial obligations are met on time.

Common Mistakes That Derail Performance Bond Applications

Disorganized Finances

One of the most common pitfalls is not preparing for  the financial review process. Weak or disorganized financials can trigger higher premiums or outright rejection. Applicants also tend to overlook the importance of credit history. Even if your business is strong, poor personal credit can raise red flags.

Poor Attention to Detail

Another frequent issue is failing to meet specific insurance or documentation requirements outlined in ARTRANS solicitations. If you miss these, your bid can be disqualified. 

Missed Renewal 

Lastly, allowing your bond to lapse during an active contract can lead to immediate disqualification and long-term damage to your company’s credibility with government agencies.

Setting Your Company Up for Success

Securing an ARTRANS performance bond is a serious undertaking, but it is manageable with the right preparation and guidance. Success in the military freight space depends on financial discipline, compliance readiness, and the ability to work with bond professionals who understand federal contracting.

Get Started with PFA Transportation Insurance & Surety Services

If you’re considering adding military contracts to your freight business, fill out the form below to get started. PFA specializes in transportation. We offer comprehensive coverage to keep businesses compliant at every step.