Senate Considers Truck Safety Legislation

Tuesday, August 30, 2011 by Transportation Lawyer
The Senate is considering truck safety legislation that would buttress a number of regulatory reforms under way at the Department of Transportation, such as an electronic onboard recorder ("EOBR") mandate and mandatory 65-mph speed limiters, and give the agency more authority in a number of areas.

The draft safety title of pending legislation to reauthorize the federal highway program lays out a broad agenda for the Federal Motor Carrier Safety Administration ("FMCSA"). Many of the dozens of provisions already are in development, but the draft does give the agency additional authority in a number of areas.

It would strengthen FMCSA's ability to revoke the registration of a carrier, forwarder or broker that has reincarnated itself under a different identity after having been sanctioned for safety violations. Carriers and managers found to have repeatedly avoid compliance requirements also would be subject to sanctions.

It would toughen barriers to entry by requiring potential carriers to submit a comprehensive safety management plan and pass a written exam covering safety regulations. And it would require the agency to conduct a safety review of a new entrant within a year of registration.

The draft also calls for a study of how detention time affects hours of service violations and driver fatigue. The study would be conducted by the Motor Carrier Safety Advisory Committee, the enforcement community and labor and safety advocacy groups to which the agency turns for feedback and ideas on industry issues., a panel of officials from the industry.

Senate Bill Would Clarify and Increase Licensing and Security Requirements for Transportation Brokers and Freight Forwarders

Tuesday, July 20, 2010 by Transportation Lawyer

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: 

  • Increases the broker bond from $10,000 to $100,000 and applies the bonding requirement to freight forwarders;
  • Clarifies that trucking companies must have broker authority or freight forwarder authority in addition to their motor carrier authority to arrange freight through another carrier for compensation; and 
  • Creates an annual operating authority renewal requirement for brokers and freight forwarders; and requires the FMCSA to revoke operating authority that is not renewed annually.

The full text of the bill can be viewed at:  http://www.govtrack.us/congress/billtext.xpd?bill=s111-3483.


Bankruptcy Preference Claims Against Transportation Companies Are On The Rise

Sunday, February 21, 2010 by Transportation Lawyer

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.