You have found a lucrative opportunity hauling freight for the U.S. Department of Defense. There is just one catch: before you move a single pallet, the government requires a financial guarantee that you will actually do the job. That guarantee is called an SDDC Bond. Without it, your SCAC code means nothing. This guide covers everything you need to know—bond amounts, costs, the application process, and exactly how to get approved.
What Is an SDDC Bond?
An SDDC Bond (also called a DoD Performance Bond, Military Freight Bond, or USTRANSCOM Performance Bond) is a surety bond required by the Military Surface Deployment and Distribution Command for all Transportation Service Providers moving freight for the U.S. Department of Defense.
The bond is a three-party agreement between:
- Principal: The freight carrier, broker, forwarder, or logistics company
- Obligee: The Military Surface Deployment and Distribution Command (SDDC)
- Surety: The company issuing the bond
If a carrier fails to perform—whether through default, bankruptcy, or abandonment of shipments—the SDDC can file a claim against the bond to recover financial damages.
Important: This bond is not insurance. If the surety pays a claim, the carrier must reimburse the surety in full.
Who Needs an SDDC Bond?
| Required | Exempt |
|---|---|
| Freight carriers moving DoD cargo | Local drayage carriers |
| Freight brokers | Commercial zone carriers |
| Freight forwarders (surface & air) | Barge carriers |
| Logistics companies | Rail carriers |
| Shipper agents | Sealift carriers |
| Pipeline carriers |
SDDC Bond Amounts by Carrier Type
| Carrier Type | Bond Amount |
|---|---|
| 1 state only | $25,000 |
| 2-3 states | $50,000 |
| 4+ states | $100,000 |
| Bulk fuel carriers | $25,000 |
| Surface freight forwarders, brokers, logistics companies | $100,000 |
| Air freight forwarders | $100,000 |
| Domestic carrier (alternate calculation) | $50,000 or 2.5% of prior-year DoD revenue (greater) |
| International program participant | $100,000 or 2.5% of prior-year international DoD revenue (greater) |
For SBA-registered carriers:
| States Served | Bond Amount |
|---|---|
| Up to 3 states | $25,000 |
| Up to 10 states | $50,000 |
| 11+ states | $100,000 |
Experienced carriers (3+ years): May post a bond equal to 2.5% of prior 12 months DoD revenue ($25,000 minimum, $100,000 maximum).
How Much Does an SDDC Bond Cost?
The premium you pay is a percentage of the total bond amount. Factors affecting your rate include credit score, business financials, years in operation, and carrier type.
| Bond Amount | Good Credit (1-3%) | Average Credit (3-7%) | Challenged Credit (7-12%) |
|---|---|---|---|
| $25,000 | $250-$750 | $750-$1,750 | $1,750-$3,000 |
| $50,000 | $500-$1,500 | $1,500-$3,500 | $3,500-$6,000 |
| $100,000 | $1,000-$3,000 | $3,000-$7,000 | $7,000-$12,000 |
Cost by credit tier (for a $50,000 bond):
- Excellent credit (750+): 1-3% = $500-$1,500 per year
- Good credit (650-749): 3-7% = $1,500-$3,500 per year
- Fair credit: 7-12% = $3,500-$6,000 per year
Carriers with 3+ years of DoD experience may qualify for a revenue-based bond: 2.5% of prior 12 months DoD revenue ($25,000 minimum, $100,000 maximum).
What the SDDC Bond Covers (and Does Not Cover)
Covered by the bond:
- Carrier default
- Abandoned shipments
- Bankruptcy
- Failure to deliver DoD freight as contracted
NOT covered by the bond:
- Late pickup or delivery
- Excessive transit times
- Refusals or no-shows
- Improper equipment
- Payment disputes with subcontractors
- Claims for lost or damaged cargo (covered by cargo insurance)
Complete SDDC Registration Requirements
Before you can haul military freight, you must complete all of these steps:
- Obtain a SCAC code from the National Motor Freight Traffic Association (NMFTA)
- Register in SAM.gov and obtain UEI and CAGE codes
- Maintain 3 consecutive years of DOT operating authority
- Get certified for e-payments with U.S. Bank Syncada
- Secure $150,000 cargo insurance ($25,000 for bulk fuel carriers)
- Obtain your SDDC Performance Bond from an authorized surety
- Complete HAZMAT certification (if transporting hazardous materials)
- Submit all materials to SDDC for Freight Carrier Registration Program (FCRP) approval
How to Get an SDDC Bond
The process follows four simple steps, and specialists like Swiftbonds have placed these bonds for carriers across all 50 states since 2008, with direct access to A.M. Best A-rated, Treasury-listed sureties. Here is how it works:
- Apply: Complete a surety bond application with your company financials, credit information, and SCAC code.
- Quote: Within hours, the surety returns a premium quote based on your bond amount and credit profile.
- Pay: You pay the annual premium via credit card, ACH, or wire transfer.
- File: The surety electronically files the bond with SDDC through the Defense Personal Property System (DPS).
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
Q: What is the difference between an SDDC bond and a DoD performance bond?
They are the same bond. SDDC is the command that administers the requirement, so the bond is called both an SDDC bond and a DoD performance bond.
Q: What was the original name of the SDDC bond?
The SDDC bond was first known as an MTMC bond (Military Traffic Management Command Bond). The MTMC was renamed SDDC in 2004.
Q: How long does it take to get approved?
Bond approval takes 1-2 business days. SDDC FCRP review takes approximately 10 business days after submission.
Q: Does the bond cover damaged cargo?
No. Cargo damage is covered by cargo insurance, not the performance bond.
Q: What happens if my bond lapses?
Your SCAC is suspended in SDDC systems immediately, and you cannot haul military freight until the bond is reinstated. Bonds must be continuous with no lapse in coverage.
Q: Can I get an SDDC bond with bad credit?
Yes, but you will pay a higher premium (7-12% or more). Some sureties specialize in challenged credit, and approval rates remain high.
Q: Do I need a separate bond for each mode (air, ocean, truck)?
Typically no. The SDDC bond covers surface transportation. Air freight requires additional TSA IAC approval, and ocean freight requires an FMC license with a separate OTI bond.
Q: What is the cancellation period for an SDDC bond?
SDDC bonds have a standard 30-day cancellation notice period. If the surety cancels the bond, you have 30 days to secure replacement coverage before your SCAC is suspended.
Q: How is the bond filed?
Electronic filing is mandatory. Unlike many surety bonds where you receive a paper document, SDDC bonds must be filed electronically by the surety company through the Defense Personal Property System (DPS). You never physically receive the bond—it is transmitted directly to the government.
5 Interesting Things About SDDC Bonds Not in the Top 10 Sites
- The bond was originally called an MTMC bond. The Military Traffic Management Command (MTMC) was renamed the Military Surface Deployment and Distribution Command (SDDC) in 2004. Some older carriers and documents still refer to “MTMC bonds,” but they are the exact same requirement.
- Your bond amount can decrease over time. If you have three consecutive years of perfect performance with no claims, you may qualify for the revenue-based calculation (2.5% of prior-year DoD revenue). If your DoD revenue is modest, this could lower your required bond amount significantly.
- The bond does NOT cover late deliveries. While the bond covers complete failure to deliver (abandonment, bankruptcy, default), it explicitly excludes operational issues like late pickup, excessive transit times, and refusals. Those are handled through performance scoring, not bond claims.
- Electronic filing is mandatory and immediate. Unlike many surety bonds where you receive a paper document to deliver yourself, SDDC bonds must be filed electronically by the surety company through DPS. The government receives the bond instantly upon filing.
- The 30-day cancellation period is your safety net. SDDC bonds carry a standard 30-day cancellation notice period. If your surety decides to cancel, you have a full month to find replacement coverage before your SCAC is suspended—a critical grace period that does not exist with many other surety bonds.
Conclusion
An SDDC Bond is a non-negotiable requirement for any carrier, broker, forwarder, or logistics company wanting to transport Department of Defense freight. Bond amounts range from $25,000 to $100,000 based on your service area and carrier type, with annual premiums typically costing 1-12% of the bond amount depending on credit. The bond covers carrier default, abandonment, and bankruptcy, but not cargo damage or late deliveries.
Before applying, ensure you have your SCAC code, 3 years of DOT authority, and $150,000 in cargo insurance. The bond is filed electronically by your surety, and once approved, you can begin receiving military freight tenders. The military freight market offers stable, high-volume opportunities—but only for carriers who meet the SDDC bonding requirement.
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