Friday, January 18, 2013 by
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.
Thursday, May 24, 2012 by
Recently, the Federal Motor Carrier Safety Administration ("FMCSA") released its 2012-2016 strategic plan, which lays out the agency's safety-focused initiatives over the next five years. The strategic plan is built around a three-pronged approach to truck and bus safety: raise the barrier to entry to the industry; enforce high safety standards; and eliminate high-risk carriers and drivers.
Among other things, the agency plans to development a smartphone application called the "SaferBus App" in order to assist consumers in selecting a particular carrier. Additionally, the FMCSA hopes to increase accessibility to its data management system. The FMCSA plans to complete rulemaking revisions to the Safety Fitness Procedures, in accordance with the CSA. Through this rulemaking FMCSA would establish safety fitness determinations based on safety data from crashes, inspections, and violation history rather than the old compliance review. The intention is to permit the FMCSA to assess the safety performance of a greater segment of the motor carrier industry with the hope of reducing large truck and bus crashes, injuries, and fatalities. The FMCSA will also work on rulemaking revisions to the Electronic On-Board Recorders for Hours of Service Drivers to require motor carriers to install and operate Electronic On-Board Recorders (EOBRs).
Further, the FMCSA will create a single comprehensive safety ranking system that covers all regulated carriers (ie, passenger, HAZMAT property, and HHG carriers, as well as shippers, including intermodal freight, brokers, drivers, and cargo tank manufacturers or repair facilities.) The Agency hopes to expand CSA and the number of carriers with SMS BASIC scores.
The FMCSA's strategic plan is available at http://www.fmcsa.dot.gov/about/what-we-do/Strategic-Plan/Strategic-Plan.aspx.
Monday, December 19, 2011 by
The Federal Motor Carrier Safety Administration ("FMCSA") proposed a new rule that would make it tougher for sanctioned carriers to reincarnate themselves under a new identity.
In the recently released notice of proposed rulemaking, the FMCSA proposed changing its procedures in several areas affecting truck lines, intermodal equipment providers, brokers, freight forwards and hazmat proceedings. The proposed rule would clarify that paying the full civil penalty in an enforcement proceeding would not give the entity the ability to avoid admitting liability.
Additionally, the FMCSA proposes the ability to review out-of-service orders before they go into effect on reincarnated operations that have a history of rule violations, along with consolidating the records of reincarnated entities together with that of the predecessors'.
The notice was posted in the Federal Register on December 13th. Comments are due by Jan. 12, 2012.
Tuesday, August 30, 2011 by
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.
Tuesday, December 21, 2010 by
The new FMCSA rules for household goods brokers, which become effective January 28, 2011, contain two changes in the consumer protection regulations governing household goods motor carriers:
The FMCSA mandate to furnish the publications ‘‘Your Rights and Responsibilities When You Move” and ‘‘Ready to Move?” can now be met by providing a hyperlink on the carrier’s Web site to the publications on the FMCSA Web site--provided the carrier includes a specified statement in the estimate and obtains a signed, dated, electronic or paper receipt verifying the shipper’s agreement to such access. Household goods carriers may want to consider revising their shipment documentation forms to take advantage of this new flexibility.
Broker carrier agreements for consumer household goods shipments will be required to contain specified provisions such as the carrier’s commitment to honor the “110%” rule. The agreement will be “public information” and must be made available upon reasonable request by a “member of the public.” Household goods motor carriers who have existing agreements with brokers should review those agreements to ensure they will be in compliance by the effective date.
Tuesday, December 21, 2010 by
Pursuant to SAFETEA-LU and a petition for rulemaking from the American Moving and Storage Association, the FMCSA has amended its freight broker regulations by adopting new final consumer protection rules governing brokers of household goods shipments moving in interstate or foreign commerce. The final rules become effective January 28, 2011.
Under the new regulations, household goods brokers must provide their DOT and MC numbers on advertisements and web sites (the FMCSA is planning to notify affected brokers of their future DOT numbers under the new URS), furnish estimates of expected moving charges and brokerage fees, give customers FMCSA pamphlets containing tips for successful moves and detailing the consumer’s rights and responsibilities, and disclose the broker’s policies concerning deposits, cancellations, and refunds. Brokers' estimates for consumers must be in writing, must be made on behalf of a specific household goods motor carrier pursuant to a written agreement containing specified provisions, and must (unless waived) be based on a physical survey by the motor carrier on whose behalf the estimate is provided if the goods are within 50 miles of the motor carrier’s or its agent’s location. The household goods motor carrier is required to ensure that brokers' estimates meet all the requirements of the consumer disclosure rules that apply to the motor carrier's own estimates.
Finally, household goods brokers must increase their surety bonds or trust funds from the current requirement of $10,000 (which applies to all brokers of freight) to the new minimum of $25,000 by January 1, 2012.
Thursday, September 23, 2010 by
All participating Unified Carrier Registration (“UCR”) states will be sending 2011 UCR renewals out to interstate motor carriers, brokers, and freight forwarders between October 15th and November 15th. The renewal notices will advise that 2011 UCR renewal applications must be filed by January 1, 2011 to ensure that UCR fee payment confirmation is accessible to enforcement officials by the February 1, 2011 UCR enforcement date. As a reminder, UCR renewals and fee payments may be handled through the national UCR website administered by the Indiana Motor Carrier Services Division at www.ucr.in.gov
or by completing and returning UCR renewals to the designated UCR base state.
Tuesday, July 20, 2010 by
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.
Wednesday, May 12, 2010 by
The Federal Motor Carrier Safety Administration ("FMCSA") just released new Unified Carrier Registration ("UCR") fees for 2010. The fees apply to interstate private carriers, for-hire carriers, freight forwarders, brokers, and leasing companies. Though the new fees are higher than in past years, they are lower than those proposed by the FMCSA last year. The new fee schedule for motor carriers is as follows:
- Up to two vehicles - the fee is raised from $39 to $76
- Three to five vehicles - from $116 to $227
- Six to 20 vehicles - from $231 to $452
- 21 to 100 vehicles - from $806 to $1,576
- 101 to 1,000 vehicles - from $3,840 to $7,511
- 1,001 to 200,000 vehicles - from $37,500 to $73,346
Brokers, freight forwarders, or leasing companies that are not also motor carriers pay a flat fee of $76. Enforcement on interstate motor carriers not in compliance with 2010 UCR fee payment begins July 15, 2010.
Sunday, February 21, 2010 by
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.
Friday, February 12, 2010 by
Trucking (common carrier ) groups have recently pushed Congress to impose tougher financial rules on transportation brokers. In order to appease groups like the Owner-Operator Independent Drivers Association who want to require brokers open their financial records to scrutiny so that companies using the brokers can determine their financial health, the Transportation Intermediaries Association (“TIA”) is proposing that the freight broker regulations increase the bond requirement from $10,000 to $100,000. In addition, TIA seeks tougher overall regulations for bonding companies, including the way they collect/pay out claims. TIA has taken its plan to Rep. Peter DeFazio, D-Ore., chairman of the House Highways and Transit Subcommittee, along with a request that the bonding process be more tightly regulated, - from the way funds are posted through bonding companies to the way payments are actually made. They also want the regulations to clarify that motor carriers cannot broker freight to other carriers without themselves posting the $100,000 bond.
Friday, January 22, 2010 by
When litigation arises, motor carriers, brokers, freight forwarders, and other transportation companies are often faced with the issue of whether to remove a state court case to federal court. Removal is permitted if the amount in controversy exceeds $75,000 and "complete diversity" among all parties exists, i.e. no party to the litigation has the same citizenship as any party on the other side. What affect does a motor carrier's status as an LLC have on diversity of citizenship? Quite a bit. While the citizenship of a corporation is determined by the place of incorporation, the citizenship of LLCs is that of their members. Consequently, an Ohio logistics company formed as a limited liability company whose members are citizens of three different states takes on the citizenship of all three states, regardless of whether work is done in those other states. Taking it one step further, if the Ohio LLC's members are LLCs too, citizenship is traced through multiple levels, meaning each LLCs' members must be accounted for in determining diversity, which ultimately could immunize an LLC from being hauled into federal court. Whether you are the suing party or the one being sued, understanding the nuisances of federal procedure will reduce costs associated with either filing the Complaint or seeking removal.
Wednesday, August 19, 2009 by
Pursuant to legislation adopted in 2008, the Defense Department in late July published an immediately effective interim amendment to the Defense Federal Acquisition Regulation, mandating a fuel surcharge pass-through clause in Defense Department transportation contracts and solicitations. Under the interim rule, this clause is to be inserted in “solicitations and contracts for carriage in which a motor carrier, broker, or freight forwarder will provide or arrange truck transportation services that provide for a fuel-related adjustment.” The rule includes a “flow-down” requirement, thus applying to carriers serving Defense Department contractors and subcontractors–including brokers and forwarders, who are required to pass fuel surcharges on to the motor carrier.
The Surface Deployment and Distribution Command has already included the pass-through requirement in its international and domestic household goods moving solicitations for the next rate cycles beginning October 1 and November 1, 2009, respectively. Other carriers should carefully review further announcements and solicitations from the defense agencies on the subject. Carriers, brokers, and forwarders should begin review and revision of their agreements with contractors and other motor carriers, forwarders, and brokers as necessary to ensure compliance. Those who pay flat per-mile or “adjusted” or “imputed” fuel surcharges, or who pass through less than 100% of the surcharge as shown on the government invoice, should pay special attention to these requirements.
Comments on the interim rule will be accepted until September 28, 2009. These new requirements relate only to Defense Department shipments, though legislative efforts to expand pass-through requirements are not unexpected.
Wednesday, November 18, 2009 by
Recent developments illustrate a number of existing and developing theories of law whereby a shipper may be held liable for damages caused by a carrier it selects to transport its freight. Because a property broker may in many situations have similar factual attributes to that of an actual shipper (e.g., control of carrier selection, pick-up and delivery time specifications, cargo loading and securement specifications, etc.), a property broker should be conscious of these developing theories of liability and implement processes and procedures to safeguard against a finding of negligence on its part with respect to any given movement of cargo.
Possible safeguards include (i) separation of property brokerage operations in an entity separate from any motor carrier or other transportation operations; (ii)development of responsible carrier selection guidelines to govern and document the broker’s carrier qualification procedures; and (iii) clear delineation within contracts between both the broker and the shipper, and the broker and the carrier of responsibilities of the aspects of a cargo move and the insurance and indemnification responsibilities of the parties.