The Motor Carrier Protection Act of 2010 (Senate Bill S. 3483) was introduced and referred to the Senate Committee on Commerce, Science and Transportation on June 14, 2010. If passed, Part 139 of Title 49 of the United States Code would be amended to add more regulation and oversight of transportation brokers and freight forwarders, with the purported goal of protecting smaller carriers from fraudulent or abusive brokers.
The bill imposes a number of new requirements on carriers, brokers and forwarders. Among other things, the bill:
The full text of the bill can be viewed at: http://www.govtrack.us/congress/billtext.xpd?bill=s111-3483.
In the current economy, as more and more shippers and/or logistics companies with broker authority file bankruptcy, the firm has seen a marked increase in the number of preference claims filed against transportation service providers. Preference claims seek to avoid payments made by the bankrupt entity in the 90 days prior to its bankruptcy filing. When the bankrupt company is a shipper, logistics company, or property broker, the resulting preference claims can affect common carriers, contract carriers, and transportation brokers. Recently, in the Quebecor bankruptcy the trustee filed over 1,700 preference claims -- approximately 300 of which are against transportation service providers. Defenses to preference claims include that the payments received were made in the ordinary course of business and that additional unpaid services were provided to the debtor after the allegedly preferential payment(s). In addition, in some cases the freight broker regulations or a critical vendor order approving payments to certain transportation service providers may provide additional defenses. Quick analysis of historical data and the assertion of both traditional and transportation specific defenses can potentially limit exposure to preference claims.