On March 5th, the FMCSA issued an order finding the Alabama Metal Coil Securement Act to be preempted because the act is more stringent than federal law but is not beneficial with respect to safety and imposes an undue burden on interstate commerce. As such, effective April 4, 2013, the state can no longer enforce the law against interstate motor carriers.
CBP recently announced that it will only accept petitions filed outside of the 60 day time period allowed by the CBP Form 7501 Notice of Penalty in certain limited circumstances. Moreover, if a late filing is accepted, the cost of late filing has increased significantly. In the past, CBP would typically accept a late filed petition including an offer in compromise if the petitioner added $200 to the mitigated amount. Now, the agency will assess a pealty of .1% of the full assessed claim (as opposed to the mitigated amount) multiplied by the number of days the petition is late. Thus, for a $50,000 assessment that is 30 days late, the additional penalty is $1,500 (.001 x 30=.03 x $50,000= $1,500).
As such, the firm strongly recommends that motor carriers and customs brokers that receive notices of penalty from CBP ensure that petitions are filed within the initial 60 period.
The Transportation Security Administration ("TSA") published a rule in today's Federal Register setting the fee for Security Threat Assessments ("STAs") at $41. According to the notice, STAs are required for "employees of aircraft operators, foreign air carriers, IACs [Indirect Air Carriers ], and CCSFs [Certified Cargo Screening Facilities] who have or are applying for unescorted access to cargo to be transported on passenger aircraft, screen cargo, supervise the screening of cargo, or perform certain other security functions as provided for in [49 C.F.R.] § 1540.201(a)." The rule takes effect June 22, 2012.
The FMCSA has moved ahead with a proposal that would relieve drivers of the obligation to provide driver-vehicle inspection reports ("DVIRs") to intermodal equipment providers ("IEP") if the driver has neither found nor been made aware of any defects in the intermodal equipment provided by the IEP. The FMCSA is accepting comments on the proposal until August 8, 2011.
The July 1, 2011 deadline for certain motor carriers and equipment leasing companies (including motor carriers that offer equipment purchase programs to owner-operators) to qualify for relaxed enforcement of the California Air Resources Board (“CARB”) greenhouse gas emission rule is fast approaching. Under the rule, subject to certain limited exceptions, 53’ trailers operated in California (regardless of where the trailer is registered or based) must meet certain minimum requirements aimed at achieving increased fuel mileage. The rule is already in effect for 2011 and newer model year trailers. Compliance for 2010 and older trailers is not required until January 1, 2013. However, CARB is providing trailer owners with the option of staggering implementation of the rule so that 100% compliance for trailers operated in California is not required until January 1, 2016. In order to qualify for this staggered implementation, a detailed fleet compliance plan must be submitted to CARB by July 1, 2011.
The July 1, 2011 deadline is only for owners with fleets of 21 or more trailers (regardless of the number of trailers that will operate in California). For smaller fleets of 20 or fewer trailers, the plan does not need to be submitted until July 1, 2012. Also, while the rule speaks in terms of “owners,” a lessee may be considered the owner under the rule depending on whether the lessor has issued notifications regarding compliance (in which case, the lessee will be deemed to be the owner of the trailer). As such, motor carriers that lease equipment may have the obligation to comply notwithstanding the fact they do not hold title to their trailers.
The court made the same distinction between flat fee and variable fee charge backs as was made by the 11th Circuit in its 2010 decision involving Landstar. The court agreed with the decision in Landstar that, assuming the chargeback is a flat fee, the carrier is under no obligation to disclose any markup that might apply. However, the court departed from Landstar with respect to variable fee chargebacks. The Swift court read Landstar as requiring the carrier to provide a full itemization of the carrier's underlying costs with respect to variable rate chargebacks (from which the owner-operator could then ascertain the carrier's profit by deducting the underlying cost from the amount of the chargeback). The Swift court declined "to make a blanket assertion that all variable-rate charge-backs per se require a disclosure of the amount of the carriers' profits and costs. A full 'recitation as to how the amount of each item is computed' does not necessarily require carriers to disclose their precise profits or costs to third-parties, even for variable rate fees."
The governing rule, according to the Swift court, is that the carrier must provide sufficient information so that the owner-operator can determine in advance whether their final costs will be. Since Swift was not required to disclose chargebacks, the owner-operators failed to prove that they were damaged so the court affirmed judgment in favor of Swift.
On Tuesday, the FMCSA published guidance regarding the use of electronic records to comply with the agency's motor carrier regulations. The guidance was posted in response to numerous inquiries from motor carriers regarding the use of electronic records and signatures. According to the agency, the new guidance "establishes parity between paper and electronic records and signatures, greatly expanding interested parties' ability to use electronic methods." The new guidance supersedes all past guidance published by the agency to the extent it conflicts with or is inconsistent with the new guidance. The guidance only applies to records to be used or maintained by private parties. It does not apply to documents that are required to be filed directly with the agency.
The Federal Motor Carrier Safety Administration ("FMCSA") released the Carrier Safety Management System (“SMS”) over the weekend meaning that CSA safety information is now available to the general public. The following disclaimer pops up when you search for carrier safety information on the website (http://ai.fmcsa.dot.gov/SMS):
USE OF SMS DATA/INFORMATION
The Federal Motor Carrier Safety Administration’s (FMCSA) Safety Management System (SMS) is an automated data system used by FMCSA to monitor motor carrier on-road safety performance. FMCSA analyzes safety performance by grouping carrier data in the SMS into seven Behavioral Analysis and Safety Improvement Categories (BASICs) which are, in turn, used to identify potential safety problems with individual carriers and determine when an enforcement intervention might be appropriate.
The data and BASICs are used by the enforcement community to prioritize investigations and roadside inspections. The SMS data system is not a Safety Fitness Determination (SFD), is not a Safety Rating pursuant to 49 C.F.R. Part 385, and does not represent FMCSA’s final determination regarding the accuracy of the data contained in the SMS.
Use of the SMS data system for purposes other than those identified above may produce unintended results and inaccurate conclusions. FMCSA highly recommends that all motor carriers periodically review the SMS data system and when necessary verify the accuracy of their SMS data through DataQs, an electronic data correcting system in which carriers can request a data review. The DataQ system is available online at http://dataqs.fmcsa.dot.gov/.
Ignoring an information request from the Canada Border Services Agency can prove costly for a carrier holding Canadian authority. The CBSA has been sending out information requests to cross-border carriers (including those domiciled in the United States) requesting information and allowing 10 days for a response. If a response is not provided to CBSA, the agency may deactivate the carrier's "Carrier Code" without notice, meaning that the deactivated Carrier Code will likely only come to the carrier's attention when a truck arrives at the border and attempts to enter Canada. Without a Carrier Code, the carrier may not be allowed to cross into Canada. Therefore, any requests received from the CBSA should be handled promptly and should provide CBSA with all requested information.
A motor carrier's tariff limitation of liability was recently upheld in a cargo loss and damage suit. The plaintiff/claimant sought to avoid the limitation based on the admiralty doctrine of material deviation. Under that doctrine, a plaintiff typically claims that the carrier failed to comply with a contractual promise to provide security services and that its failure to do so should result in the limitation of liability being voided. In the case of Platinum Cargo Logistics, the court refused to adopt the material deviation doctrine, noting that it is an admiralty doctrine that had not been applied in these circumstances by the 9th Circuit. Thus, the carrier was only liable for its limited liability of $245,000, as opposed to the full unlimited value of the shipments at issue, which exceeded $7,000,000.
As previously reported on this blog, the U.S. Supreme Court's ruling in Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp. involved a rail carrier. However, the case also affects motor carriers since motor carriers are also subject to the Carmack Amendment. Unfortunately, the case is not clear as to its affect on motor carriers. As noted, the issue in the case was whether the Carmack Amendment or the Carriage of Goods by Sea Act ("COGSA") applies to cargo claims arising during the inland leg of an import ocean move. The court ruled that COGSA applies. This is generally thought to be favorable to motor carriers defending cargo loss and damage claims because COGSA includes a $500 per package limitation of liability and it is possible that the entire intermodal container will be considered a package for purposes of the limitation. However, the decision raises questions with respect to whether Carmack applies to export moves that will move by steamship under a through bill of lading, or to import moves from Canada and Mexico.
The Federal Motor Carrier Safety Administration has clarified its use of records generated by mobile communication/tracking technology with respect to the hours of service regulations and in doing so announced its intent to issue a notice of proposed rulemaking regarding the hours of service regulations by the close of 2010. The FMCSA updated a list of supporting documents used to verify driver records of duty status. While deleting a few items from the list, the FMCSA added "electronic mobile communication/tracking records." Inspectors have authority to demand these records in an audit if the carrier uses such technologies. In addition, the FMCSA announced that it would be issuing a notice of proposed rulemaking that would: (1) propose that electronic on board recorders be required for more carriers and drivers; (2) propose that motor carrier be required to develop and maintain systemic oversight of driver compliance with hours of service regulations; and (3) propose new requirements for retaining supporting documents. The notice is expected by the end of 2010.
The Federal Motor Carrier Safety Administration ("FMCSA") has issued regulatory guidance regarding drivers record of duty status under the hours of service regulations. Under the hours of service regulations, drivers are required to prepare records of duty status in duplicate. Motor carrier regulations already allow those records to be maintained electronically. Some motor carriers require their drivers to complete logs manually and then the motor carrier scans those logs and retain the electronic copies. In that circumstance, the FMCSA no longer requires the driver to prepare records of duty status in duplicate. Instead, the driver can now prepare one copy of the logs, scan and send it to the carrier, and retain the original for seven days as required by regulation.
Effective January 1, 2009, both Ontario and Quebec began requiring that commercial motor vehicles operating within those provinces be equipped with speed limiters set at 105 km/h, which equates to 65 mph. The regulations were subject to an educational period of soft enforcement, but are now being enforced in both provinces. Importantly, the rules are not limited to vehicles based in either province. Thus, for instance, a U.S. based vehicle operating in either province pursuant to Canadian authority is subject to the commercial vehicle safety measure. Fines vary in each province. The regulations will be enforced by enforcement officers that will plug a portable testing device into the vehicle's Electronic Control Module.