You cannot haul a single load of military freight without it. And if your bond lapses while you have active contracts, your access to the DoD load system is revoked the same day. For freight carriers, brokers, and logistics companies working in military transportation, the Department of Defense performance bond is not optional paperwork — it is the credential that determines whether you participate in one of the most stable freight markets in the country.
This guide covers what the bond actually is, what it covers and doesn’t cover, how to get it, what the registration process involves, and everything else you need to know to get and keep your access to military freight.
What Is a Department of Defense Performance Bond?
A Department of Defense performance bond — also formally known as a USTRANSCOM Performance Bond — is a commercial surety bond required of Transportation Service Providers who wish to transport military freight for the U.S. Department of Defense. It is mandated and administered by the U.S. Army Transportation Command (ARTRANS), formerly known as the Military Surface Deployment and Distribution Command (SDDC).
The bond is a three-party financial guarantee:
| Party | Who They Are | Role |
|---|---|---|
| Principal | The carrier, broker, forwarder, or logistics company | Obtains and pays for the bond; repays the surety if a claim is paid |
| Obligee | ARTRANS (formerly SDDC), acting on behalf of the Department of Defense | Requires the bond; files claims if the TSP fails to perform |
| Surety | The insurance/surety company | Underwrites and issues the bond; pays valid claims up to the bond amount |
The bond guarantees that the Transportation Service Provider will fulfill all obligations to deliver DoD freight as contracted. It is not insurance — this distinction matters. If ARTRANS files a valid claim and the surety pays it, the carrier is legally obligated to reimburse the surety for the full amount paid, plus interest and administrative expenses. The bond protects the government; it does not protect the carrier.
A Note on Naming: MTMC → SDDC → ARTRANS
This bond has gone through three names over its history, and understanding all three helps when reviewing older documents, contracts, or registration materials.
The program originated under the Military Traffic Management Command (MTMC). In 2004, MTMC was renamed the Military Surface Deployment and Distribution Command, giving the bond its long-running identity as the SDDC Bond. In 2024, SDDC was renamed to the U.S. Army Transportation Command (ARTRANS) — the name currently in use. The bond’s official legal name throughout has been and remains the USTRANSCOM Performance Bond, which is the name under which it is filed electronically by the surety company.
Contractors who received their bond under the old SDDC designation, who see MTMC references in older contract documents, or who search for information using legacy terms will find all three names in the market. The program and its requirements are the same; only the administering command’s name has changed.
Two Types of DoD Performance Bonds
Most carriers are aware of one version of this bond. There are actually two distinct types, covering different markets within military transportation:
Freight Carrier Bonds guarantee the performance and delivery of military cargo — equipment, supplies, and government materials transported between installations, depots, and operational areas. This is the bond most carriers, brokers, forwarders, and logistics companies need.
Personal Property Carrier Bonds guarantee the transport of military personnel’s personal property — household goods, personal effects, and belongings — as military members move between assignments. Companies participating in the DoD Personal Property Program (moving military families) need this bond separately.
A company providing both services may need both bonds. Determining which type applies to your operation should be confirmed with ARTRANS or your surety broker before registering.
What the Bond Covers — and What It Does Not
The bond covers specific categories of performance failure. Knowing the boundaries matters for both compliance and for understanding what insurance coverage you need alongside the bond.
The bond covers:
- Carrier default on contracted DoD shipments
- Abandoned shipments
- Carrier bankruptcy while freight is in transit or under contract
- Any situation requiring ARTRANS to find a replacement carrier at government expense
The bond does not cover:
- Late pickup or delivery
- Excessive transit times
- Refusals or no-shows
- Improper or inadequate equipment
- Payment disputes with subcontractors
- Claims for lost or damaged cargo
Cargo damage, loss, and theft are covered by cargo insurance — a separate requirement that must be maintained alongside the bond. A carrier who believes their performance bond provides cargo coverage is operating with a critical gap in their risk management. The bond and cargo insurance serve entirely different purposes and neither substitutes for the other.
Who Needs a DoD Performance Bond
ARTRANS requires a performance bond from all Transportation Service Providers participating in military freight transportation, including:
- Freight carriers (motor carriers hauling DoD freight)
- Freight brokers arranging DoD freight transportation
- Logistics companies providing third-party logistics for DoD shipments
- Surface freight forwarders
- Air freight forwarders
- Shipper agents
Exempt carrier types (no bond required): local drayage carriers, commercial zone carriers, barge carriers, rail carriers, sealift carriers, and pipeline carriers.
Bond Amounts: What You Need Based on Your Operation
The required bond amount is determined by your carrier type, your size, and the number of states in which your DoD shipments will begin and end. This last point is important: the service area is defined by where shipments originate andwhere they terminate — both must be within your selected states.
For large freight carriers:
| States Served | Required Bond Amount |
|---|---|
| One (1) state | $25,000 |
| Two (2) to three (3) states | $50,000 |
| Four (4) or more states | $100,000 |
For SBA-registered small carriers:
| States Served | Required Bond Amount |
|---|---|
| Up to three (3) states | $25,000 |
| Up to ten (10) states | $50,000 |
| Eleven (11) or more states | $100,000 |
Special categories:
- Freight brokers, freight forwarders, logistics companies, air freight forwarders, shipper agents: $100,000 flat, regardless of states served
- Bulk fuel carriers: $25,000 flat, regardless of states served
Revenue-based option for experienced carriers: Carriers who have operated under their own name with the DoD for three or more consecutive years may elect to post a bond equal to 2.5% of their total DoD revenue for the prior 12 months. The minimum under this option is $25,000 and the maximum is $100,000. This option can produce meaningful savings: a carrier with $2 million in annual DoD revenue would owe $50,000 under the revenue formula — less than the $100,000 required for a 4+ state operation under the standard tier.
One bond per SCAC code. Each Standard Carrier Alpha Code your company holds requires a separate bond. A carrier operating under three SCAC codes needs three bonds. This has direct cost implications for multi-entity carriers or companies that have acquired businesses with their own SCAC registrations.
Not accepted in lieu of a bond: Trust funds, customs bonds, DOT bonds, letters of credit, and cash deposits. A surety bond from an authorized company is the only acceptable form of financial guarantee.
What Does a DoD Performance Bond Cost?
The bond premium — the annual fee paid to the surety company — is calculated as a percentage of the required bond amount. Unlike the bond amount (set by regulation), the premium rate varies based on underwriting factors.
| Credit Profile | Annual Premium Rate | $25,000 Bond Cost | $50,000 Bond Cost | $100,000 Bond Cost |
|---|---|---|---|---|
| Excellent (720+) | 1%–2% | $250–$500 | $500–$1,000 | $1,000–$2,000 |
| Good (650–719) | 2%–3% | $500–$750 | $1,000–$1,500 | $2,000–$3,000 |
| Fair (600–649) | 3%–5% | $750–$1,250 | $1,500–$2,500 | $3,000–$5,000 |
| Challenged (550–599) | 5%–8% | $1,250–$2,000 | $2,500–$4,000 | $5,000–$8,000 |
| Poor (below 550) | 8%–10% | $2,000–$2,500 | $4,000–$5,000 | $8,000–$10,000 |
Primary pricing factors are personal credit (all owners with 10%+ ownership are evaluated), business financials, years in operation, and prior DoD experience. Carriers with challenged credit who can demonstrate strong liquid assets, clean business financials, or a documented track record of successful DoD contract performance can sometimes secure better rates than their credit score alone would suggest.
The bond term is one year, annually renewable. Your rate is re-evaluated at renewal based on current credit and financial condition. Improved credit between issuance and renewal can lower the premium; a claim on record will likely raise it.
The Full Registration Process: From Application to ETA Password
The DoD performance bond is one step in a multi-step registration process that qualifies your company to haul military freight. Completing the bond without completing the registration is not sufficient to access DoD freight loads. Here is the full sequence.
Step 1: Obtain a Standard Carrier Alpha Code (SCAC) The SCAC is a two-to-four letter code that uniquely identifies your transportation company. It is issued by the National Motor Freight Traffic Association (NMFTA). You can apply online at nmfta.org for $68 or by mail for $78. Processing typically takes one to three business days. Each business entity you operate needs its own SCAC, and each SCAC requires its own bond.
Step 2: Establish an Electronic Payments Account Set up an account with U.S. Bank Syncada (formerly PowerTrack) to receive electronic payments for DoD freight services. Registration is free and enables electronic billing coordination between your company and military shipping offices.
Step 3: Verify DOT Authority You must have maintained a valid U.S. Department of Transportation (DOT) operating authority continuously for at least three years before applying. Motor carriers need an MC number from the FMCSA; freight forwarders need an FF number. ARTRANS verifies your authority and operating history during registration review.
Step 4: Complete CBA License Application (If Applicable) Surface freight forwarders and brokers who will handle commercial bills of lading must complete this application. It authorizes handling of the specific documents used in DoD freight billing.
Step 5: Obtain Your DoD Performance Bond Purchase your ARTRANS/USTRANSCOM Performance Bond from an authorized surety company. The surety files the bond electronically with ARTRANS — you do not need to send an original paper bond document. Processing after payment typically takes one to two business days. The surety company receives filing confirmation from ARTRANS.
Step 6: Secure Cargo Insurance Maintain cargo insurance meeting ARTRANS minimums: $150,000 for general freight carriers; $25,000 for bulk fuel carriers. Cargo insurance must be active before registration is complete and maintained throughout all contract periods. This is separate from the performance bond and covers entirely different risks.
Step 7: HAZMAT Certification (If Applicable) Carriers transporting hazardous materials must obtain HAZMAT certification from the Pipeline and Hazardous Materials Safety Administration (PHMSA). This is only required if your DoD contracts include hazardous materials shipments.
Step 8: Section 889 Compliance Self-certify compliance with the FY2019 National Defense Authorization Act Section 889(a)(1)(B). This provision prohibits DoD contractors from using telecommunications or video surveillance equipment manufactured by Huawei, ZTE, Hytera, Hikvision, or Dahua. Review your company’s phone systems, network equipment, and security cameras before certification.
Step 9: Submit ARTRANS Registration Complete and submit your Freight Carrier Registration Package through the ARTRANS online portal. ARTRANS reviews the submission and responds within approximately three business days.
Upon Approval: The ETA Password When your registration is accepted and your bond is confirmed, ARTRANS issues you an Electronic Transportation Acquisition (ETA) password. The ETA system is the DoD’s platform for posting and awarding military freight loads — it is where you see available contracts, submit bids, and accept assignments. Without the ETA password, you cannot view, bid on, or accept any military freight. The ETA password is the tangible result of the entire registration process — everything else is prerequisite to receiving it.
How to Get a DoD Performance Bond
Apply, receive a Quote, Pay the premium, File the bond. For most applicants with acceptable credit, approval takes 24–48 hours and the bond is electronically filed with ARTRANS by the surety company. Carriers with credit challenges, very large bond amounts, or new business histories may require additional financial documentation.
Swiftbonds writes ARTRANS/USTRANSCOM Performance Bonds (DoD performance bonds) for freight carriers, brokers, forwarders, and logistics companies in all 50 states. Apply online or contact us directly.
Swiftbonds LLC
Voted 2025 Surety Bond Agency of the Year
4901 W. 136th Street
Leawood KS 66224
(913) 214-8344
https://swiftbonds.com/
Frequently Asked Questions
What is the difference between an SDDC bond and an ARTRANS bond?
They are the same bond. The SDDC (Military Surface Deployment and Distribution Command) was renamed ARTRANS (U.S. Army Transportation Command) in 2024. The bond requirement, its purpose, coverage, and structure remain the same. Some surety companies still use SDDC terminology in their materials; both refer to the same product.
What is the USTRANSCOM Performance Bond?
USTRANSCOM is the U.S. Transportation Command — the parent command structure that oversees ARTRANS. The official legal name of the DoD performance bond filed with the surety market is the USTRANSCOM Performance Bond. This is also how you may see it referenced on official bond documents.
Do I need a separate bond for each SCAC code?
Yes. Each Standard Carrier Alpha Code requires a separate performance bond. A carrier operating under two SCAC codes must maintain two bonds — one per code. The bond amount for each is determined independently based on the states served under that SCAC.
Can I use a trust fund or letter of credit instead of a surety bond?
No. ARTRANS does not accept trust funds, customs bonds, DOT bonds, letters of credit, or cash deposits as substitutes. A surety bond from an authorized company is the only acceptable form of financial guarantee for this registration requirement.
How is the bond amount calculated if I have 3+ years of DoD experience?
Carriers with three or more consecutive years operating under their own name with the DoD may calculate their bond as 2.5% of their total DoD revenue for the prior 12 months. The resulting amount cannot be less than $25,000 or more than $100,000. Whether this produces a lower requirement than the standard state-based tiers depends on your revenue — run the calculation before choosing.
Does the bond cover cargo that is lost or damaged?
No. Lost and damaged cargo is covered by cargo insurance, which is a separate and separately maintained requirement. The performance bond covers default, abandonment, and bankruptcy — situations where the carrier completely fails to deliver. It does not cover cargo that arrives damaged, late, or short. Both coverages are required; neither replaces the other.
What happens if my bond lapses?
Your ARTRANS carrier status is suspended immediately upon bond expiration without renewal. Your ETA system access is revoked — you cannot bid on new DoD loads and cannot accept freight under existing contracts. Reinstatement requires re-registration, which involves re-submission, re-review, and re-issuance of a new bond. The process can take days to weeks. Set renewal reminders at 60 days and 30 days before expiration, and pay renewal invoices immediately upon receipt.
Can a carrier with bad credit get bonded?
Yes, though at a higher premium rate. Carriers with credit scores below 600 typically pay 8%–10% of the bond amount annually. Providing strong business financial statements, documentation of liquid assets, or demonstrating DoD contract experience can sometimes offset weak personal credit. Most surety agencies can approve the majority of applicants; the tradeoff is premium cost, not eligibility.
What is the ETA password and why do I need it?
The Electronic Transportation Acquisition (ETA) password is issued by ARTRANS upon successful completion of the full registration process, including bond acceptance. It provides access to the DoD’s transportation acquisition system — the platform where military freight loads are posted, bid on, and awarded. Without the ETA password, a registered carrier cannot participate in any DoD freight movement. Receiving the ETA password is the confirmation that your registration is complete and active.
What does Section 889 compliance require?
Section 889 of the FY2019 National Defense Authorization Act prohibits DoD contractors from using certain telecommunications and video surveillance equipment manufactured by Huawei, ZTE, Hytera, Hikvision, and Dahua. Carriers must self-certify compliance as part of the ARTRANS registration process. Review your company’s network equipment, phones, and security camera systems before certifying.
Conclusion
The DoD performance bond — officially the USTRANSCOM Performance Bond, formerly the SDDC bond — is the foundational requirement for access to one of the most stable and consistent freight markets in transportation. The military freight market does not fluctuate with the economy the way commercial freight does. Carriers who qualify, maintain their registration, and operate reliably gain access to a steady volume of government-contracted loads backed by guaranteed payment through U.S. Bank Syncada. The barrier to entry is the registration process, and the bond is the central requirement within that process. Get it right once, keep it current, and the ETA system access it unlocks stays open.
5 Things About the DoD Performance Bond That Every Carrier in This Market Should Know
- The SDDC no longer exists — the bond is now administered by ARTRANS, and most bonding resources have not been updated to reflect this. The U.S. Army Transportation Command (ARTRANS) took over from the Military Surface Deployment and Distribution Command (SDDC) in 2024, continuing a renaming history that goes back to the original Military Traffic Management Command (MTMC). The official carrier registration welcome package now references ARTRANS, and the registration portal and contact information have been updated accordingly. Carriers who pull up older bonding guides and try to contact SDDC directly will find outdated contact information. The official current registration packet is published on the army.mil domain and should be your reference document for registration requirements rather than third-party bonding sites — including this one — for the most current procedural specifics.
- A lapsed bond does not just pause your new bid activity — it immediately revokes your ETA system access, which can strand active contracts mid-performance. The ETA password that grants you access to the DoD freight bidding and load management system is tied directly to the active status of your performance bond. When the bond lapses — even by a single day — ARTRANS suspends ETA access. If you have active loads in transit or pending pickups under existing contracts, losing ETA access does not pause those obligations; it makes it harder to manage or communicate about them through the system. Reinstatement is not immediate. The practical advice: treat your bond renewal with the same urgency as your cargo insurance renewal, because the operational consequence of a lapse in either is equally disruptive.
- The revenue-based bond option can produce significant savings for established carriers — but most carriers never ask their surety broker about it. Carriers with three or more consecutive years of DoD freight history can bond at 2.5% of their prior 12 months of DoD revenue rather than using the standard state-based tiers. For a carrier doing $1.8 million in annual DoD revenue, the revenue formula produces a $45,000 bond — compared to $100,000 under the standard four-or-more-states tier. The premium on a $45,000 bond at 2% is $900 per year; the premium on a $100,000 bond at the same rate is $2,000. The savings over multiple years are meaningful. The revenue-based option is mentioned in registration materials but rarely discussed by surety agencies selling standard-tier bonds. Ask specifically about it if you have three or more years of documented DoD freight history.
- The personal property carrier bond and the freight carrier bond are two entirely different products serving two entirely different markets — and some DoD transportation companies need both. Freight carriers haul military cargo: equipment, supplies, and government materials. Personal property carriers haul what military personnel own: household goods, cars, and personal effects when service members receive permanent change of station orders. The DoD runs separate programs for each, with separate registration requirements, separate bond types, and in some cases separate surety markets. A logistics company that moves both military cargo and military household goods may need to register for both programs and bond separately for each. Treating these as the same product produces gaps in compliance.
- Section 889 compliance is a registration requirement that many carriers self-certify without fully understanding — and a false certification creates legal exposure that the bond does not cover. The prohibition on telecommunications and video surveillance equipment from five specifically named Chinese manufacturers applies to all DoD contractors, including freight carriers. The self-certification during ARTRANS registration is a legal declaration. Carriers who certify compliance without actually auditing their network routers, security cameras, phone systems, and cab-mounted dash cams for affected equipment are making a declaration that may not be accurate. The performance bond provides no protection against regulatory or legal consequences of a false Section 889 certification — that exposure sits with the carrier directly. The required audit is not technically complex: check the manufacturer of each piece of telecommunications or surveillance equipment your company uses and confirm none are from the five listed entities before certifying.
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