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SDDC / DOD Performance Bond Requirements for Military Freight Carriers
In order to apply to become a Transportation Service Providers (TSP) you must first secure your Standard Carrier Alpha Code (SCAC) with the National Motor Freight Traffic Association (NMFTA), then you will apply for the surety bond.
Standard bond amounts typically fall into three tiers—$25,000, $50,000, or $100,000. The Performance bond amount is based on the size of the company and the number of states they will service.
- $25,000 bond for 1 state
- $50,000 bond for 2-3 states
- $100,000 bond for 4 or more states
If your business has been licensed with the SDDC/DOD for 3 or more years, you have the option to submit a bond in the amount of 2.5% of their Total DOD revenues for the prior 12 months, the bond amount shall not exceed $100,000 and not be less than $25,000. Other exceptions are:
- Bulk Fuel Carriers - $25,000 bond required
- Surface Freight Forwarders, Logistics Companies, Brokers and Air Freight Forwarders - $100,000 bond required
- If entity is registered with the Small Business Administration (SBA), the bond amounts are as follows:
- $25,000 bond for up to 3 states
- $50,000 bond for up to 10 states
- $100,000 bond for up to 11 or more states
Apply for your Military Freight Carrier Surety bond today!
Understanding the SDDC Performance Bond
The Military Surface Deployment and Distribution Command (SDDC) requires certain transportation service providers and freight carriers to obtain a DOD Performance Bond before they can move military freight. This requirement ensures that carriers contracted by the Department of Defense (DOD) will meet their obligations, deliver freight as promised, and protect the government against potential losses.
If you’re a carrier looking to secure military contracts, obtaining an SDDC Performance Bond is not just a formality—it’s a critical requirement for doing business with the Department of Defense.
Who Needs an SDDC / DOD Performance Bond?
The SDDC Performance Bond requirement applies to:
Freight carriers that transport cargo for the U.S. military.
Transportation service providers entering into contracts with the DOD.
New applicants seeking approval to join the military freight transportation program.
In short, if you want to haul military freight, you must secure this bond. Without it, your company cannot be approved to participate in SDDC’s programs.
Why Is the Bond Required?
The Department of Defense relies on private freight carriers to move critical supplies, equipment, and materials. Because of the importance of these shipments, the SDDC requires a performance bond to ensure:
Contract compliance – Carriers fulfill their contractual obligations.
Financial protection – If a carrier defaults or fails to perform, the bond compensates the government for resulting losses.
Operational reliability – Only financially stable and reliable carriers qualify.
This requirement protects the U.S. government while also strengthening the integrity of its freight network.
What Does the SDDC Performance Bond Cover?
The bond acts as a guarantee that the freight carrier will:
Deliver shipments on time and as contracted.
Adhere to all SDDC regulations and requirements.
Cover damages or losses caused by nonperformance.
If a carrier fails to perform, the bond ensures the DOD can recover costs. For example, if a carrier abandons a shipment or fails to meet delivery deadlines, the surety company backing the bond will step in to cover damages. Keep in mind that the carrier is still ultimately responsible for reimbursing the surety company for any and all sustained losses.
How Much Does the Bond Cost?
The cost of an SDDC Performance Bond depends on several factors:
Bond amount required by the DOD (ranges vary depending on contract size and program participation).
Carrier’s financial strength — Credit score, business history, and financial capacity.
Risk profile of the applicant.
In most cases, surety bond premiums range between 1% and 3% of the required bond amount for qualified applicants. For example:
A $50,000 bond could cost as little as $500–$1500 annually.
A $100,000 bond could cost $1,000–$3,000 annually, depending on credit and underwriting factors.
This makes the bond an affordable step compared to the financial exposure of operating without one.
Apply for your Military Freight Carrier Surety bond - Low rates and simplified underwriting process!
What Are the Bond Limits?
The SDDC sets bond requirements at varying levels depending on the type of transportation service and scope of operations. Common limits include:
$25,000 – Minimum requirement for smaller carriers or new entrants.
$100,000+ – For larger carriers handling significant freight volumes.
The SDDC reserves the right to adjust bond limits based on performance history, contract size, and operational risks.
Step-by-Step: How to Secure an SDDC Performance Bond
Application – Submit a bond application with a surety provider. This will include details about your business, financials, and required bond amount.
Underwriting Review – The surety evaluates your creditworthiness, business stability, and compliance history.
Bond Approval & Quote – If approved, you’ll receive an emailed bond quote showing your annual premium.
Payment & Issuance – Once payment is made, the surety issues the bond.
Submission to SDDC – We will file the bond with the Military Surface Deployment and Distribution Command to finalize your compliance.
Competitor Comparison: Why Choose Us for Your Bond?
While many providers offer SDDC Performance Bonds, not all deliver the same experience. Here’s how we stand apart:
Streamlined application process – No unnecessary delays or confusing steps.
Competitive premiums – Affordable rates tailored to your financial profile.
Expert guidance – Our team specializes in DOD bonding requirements, ensuring accuracy.
Fast turnaround – Get approved quickly so you can focus on moving freight, most approvals are same day!
Unlike competitors who offer generic surety solutions, we focus on military freight carriers and know the exact requirements to keep your business compliant.
FAQs About the SDDC / DOD Performance Bond
What is an SDDC Performance Bond?
It’s a surety bond required by the Military Surface Deployment and Distribution Command for carriers that want to transport freight for the DOD.
How much does the bond cost?
Premiums typically range between 1% and 3% of the bond amount, depending on your credit and financial strength.
Who needs the bond?
Any carrier or transportation service provider contracting with the DOD to move military freight must have an active SDDC Performance Bond.
How do I apply?
The process involves submitting an application, underwriting review, approval, payment, and filing with the SDDC. Partnering with a surety specialist makes this process seamless.
What happens if a carrier fails to perform?
If a carrier defaults, the bond ensures the DOD is compensated for resulting losses. This protects the government and encourages only reliable carriers to participate.