August 2015
Government Affairs
Issues Report
TIA Government Affairs Legislative and Regulatory Update
Current Issues:
Coercion; Prohibition of Commercial Motor Vehicle Drivers - On Tuesday, May 13th, 2014 the Federal
Motor Carrier Safety Administration (FMCSA) published a notice of proposed rulemaking (NPRM)
prohibiting coercion of commercial motor vehicle (CMV) drivers in the Federal Register. TIA filed
comments to the NPRM. After several delays, the Final Rule is currently projected to be released on
October 26, 2015. The Final Rule is currently scheduled to be released on October 29, 2015, barring any
additional setbacks.
Comprehensive Safety Analysis (CSA) – The Senate bi-partisan Transportation Reauthorization bill that
passed the U.S. Senate on July 30th, contains language that remove the CSA “scores” from the public
view. The raw data would remain on the website. Additionally, it would require that FMCSA fix
numerous well documented issues with the CSA initiative that GAO, DOT IG, and numerous other
reports have clearly outlined need to be addressed by the Agency. Until those issues are addressed and
corrected the scores will remain offline from public view.
The STRR Act removes from public view the CSA scores and analysis. It requires the National Research
Council to study the CSA initiative and report back on numerous key issues and industry concerns. After
completing the study the Department of Transportation Inspector General’s Office (DOT IG) shall
submit a corrective action plan to the FMCSA and Congress. Once the identified deficiencies of the CSA
initiative are addressed and corrected, the DOT IG must certify that the issues identified have been
corrected and must make a certification of correction. Once the certification is complete, the CSA
scores and analysis, may be made publicly available again. Additionally, the legislation bars the Agency
from implementing a safety fitness determination (SFD) rulemaking until certification is completed.
It has been, and remains, TIA’s consistent position that the FMCSA Safety Rating alone determines a
motor carrier’s fitness for use, and should always take precedence over, and clearly outweigh, any
single score, or collection of scores, or data set, including CSA’s SMS or BASIC scores.
The Safety Fitness Determination (SFD) rulemaking is scheduled to be released to the public for
comments in November 4, 2015 with a three-month comment period to follow.
Definition of a Tank Vehicle – In May of 2011 the FMCSA issued a regulation on CDL licensing
requirements that changed the definition of a tank vehicle. That new definition captured many vehicles
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that are not, in the traditional sense, tank vehicles due to the fact they lack actual tanks. Rather,
FMCSA’s definition expanded to cover loads containing bulk containers (greater than 119 gallon
capacity) with an aggregate capacity of 1,000 gallons or more.
On September 25, 2013, the Federal Motor Carrier Safety Administration (FMCSA) published in the
federal register an updated notice of proposed rulemaking to revise its definition of a “tank vehicle.”
The revised definition to clarify those vehicles transporting multiple IBCs (over 119 gallons each) with an
aggregate capacity of 1,000 gallons or more are tank vehicles that would require an endorsement, and
that the endorsement is needed if one or more tanks are on the vehicle, regardless of the method by
which the tanks are secured to the vehicle. In addition, this definition clearly explains that tanks
manifested as empty or as residue as part of the load does not make the vehicle a “tank vehicle”
provided the tanks are actually empty or contain only residue.
TIA is awaiting the Final Rule, there has been no timetable given from the Agency on publication.
Department of Labor Regulations - In lieu of supportive Congressional action (and in anticipation of
Congress not being able to legislate), the Administration has been active in pushing federal
rulemakings and Administrative court decisions that muddy the waters on previously clearly-defined
labor issues. Of note, in July 2015, the Administration issued a proposed rule that would redefine which
workers are exempt or non-exempt from federal overtime regulations. Rather than editing the duties
test to reflect a modern, computerized workplace, the Administration proposed determining exempt or
non-exempt status based solely on an increased salary threshold. The proposed rule will increase the
amount of annual salary that an employee must make in order to be non-exempt from $23,660 on an
annual basis to $54,000 per year on an annual basis.
The recent decision by the National Labor Relations Board in a case involving Browning Ferris Industries
of California has also complicated matters for employers by muddying the water on the joint employer
standard. Previously, a “bright line” test was used to determine whether a business entity who was
contracting or franchising with a separate business entity was a joint employer of the workers of that
subcontracted or franchised company. This test ensured that, provided the first entity did not exercise
direct control over wages, hours, discipline, hiring, or firing, that they were not employers of the
subcontractor or franchisee workers. However, under the new NLRB decision, if a company COULD
have exercised that control over some aspects of the worker, then they are in effect a joint employer.
This decision will likely expose many companies who rely on subcontractors or franchise owners to joint
employer status, including liability for wage and hour violation claims by workers and exposure to
complaints to the Equal Employment Opportunity Commission (EEOC).
Electronic Logging Devices (ELDs) – On Thursday, March 13, 2014 the Federal Motor Carrier Safety
Administration (FMCSA) released their supplemental notice of proposed rulemaking (SNPRM) on
Electronic Logging Devices (ELD) and Hours of Service (HOS) Supporting Documents. The Agency
proposes amendments to the Federal Motor Carrier Safety Regulations (FMCSRs) to establish: 1)
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minimum performance and design standards for HOS ELDs; 2) requirements for the mandatory use of
these devices by drivers currently required to prepare HOS records of duty status (RODS); 3)
requirements concerning HOS supporting documents; and 4) measures to address concerns about
harassment resulting from the mandatory use of ELDs. The Agency estimates that this proposed rule
could save as many as 24 lives per year.
The Final Rule is expected to be released on October 30, 2015 with a two year phase-in period for
motor carrier compliance.
FDA Proposed Food Safety Rule - The Food and Drug Administration (FDA) is proposing to establish
requirements for shippers, carriers by motor vehicles and rail vehicle, and receivers engaged in the
transportation of food, including food for animals, to use sanitary transportation practices to ensure the
safety of the food they transport. This applies to both interstate and intrastate commerce. This rule
making is part of a larger effort to focus on prevention of food safety problems throughout the food
chain and is part of the Agency's implementation of the Sanitary Food Transportation Act of 2005 and
the FDA Food Safety Modernization Act of 2011 (FSMA).
TIA has gained intelligence from other industry stakeholders that brokers will be included in the
definition of a shipper. TIA staff will continue to work with stakeholders and FDA to ensure that fair
practices are established.
TIA established a working group to draft TIA comments on the proposed rule. TIA filed comments and
is expecting a Final Rule on March 31, 2016.
FMC Detention & Demurrage – In July 2015, TIA joined 73 national and regional trade associations in
supporting legislation to enhance the collection of statistics at U.S. ports, which could be used to
determine the economic impact of cargo processing slowdowns and allow more timely intervention by
regulatory authorities at those sites. Following the letter, TIA is working with the National Retail
Federation to develop a coalition of industry voices that will petition the Federal Maritime Commission
(FMC) to either issue guidance or a formal rule to establish a baseline of reasonableness for levying of
charges for detention and demurrage. The FMC has the authority to issue such guidance under the
Shipping Act of 1984. TIA will work with industry partners and the NRF to collect affidavits from
interested companies and associations and encourage the FMC to take positive action on the issue.
Government Freight – Two agencies essentially fill the role of 3rd-Party Logistics provider for the U.S.
Government: the General Services Administration (GSA) for civilian agencies, and the U.S.
Transportation Command (USTRANSCOM) for the Department of Defense. Part of USTRANSCOM (the
Strategic Deployment and Distribution Command, or SDDC) works specifically with surface
transportation movements. TIA member work with both GSA and SDDC as transportation service
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providers. Frequently, TIA members must also work with the Audit Division of the GSA, which performs
pre-payment and post-payment audits of all government transportation contracts, civilian or defense.
TIA frequently works with SDDC and GSA to clarify issues related to post-payment audit fines that are
assessed to members due to confusing rules surrounding accessorial charges.
TIA is a sponsor and active participant in the Surface Transportation Committee of the National
Defense Transportation Association (NDTA). As part of the USTRANSCOM-NDTA Fall Meeting at
National Harbor, MD, TIA Government Freight Committee Chair Kenny Clark presented an educational
session on building positive relationships between third-party logistics companies and brokers, and
government shippers. The session was well received by the over fifty session attendees. The
backgrounds of those in attendance ranged from private sector to USTRANSCOM officers to civilian
Department of Defense staff who are in charge of the upcoming Defense Freight Transportation
Services.
Heavy Vehicle Speed Limiters - This joint rulemaking with NHTSA would respond to petitions from ATA
and Roadsafe America to require the installation of speed limiting devices on heavy trucks. The Agency
believes this rule would have minimal cost, as all heavy trucks already have these devices installed,
although some vehicles do not have the limit set. This rule would decrease the estimated 1,115 fatal
crashes annually involving vehicles with a GVWR of over 26,000 pounds with posted speed limits of 55
mph or above.
The notice of proposed rulemaking was expected to be released for public comment on September 21,
2015, but nothing has been released to date.
Highway Funding – Funding for our highway and infrastructure projects runs out on November 20,
2015. TIA supports raising the fuel tax as long as the money raised goes towards the maintenance and
development of our nation’s transportation projects, but an increase in the fuel tax is a non-starter on
the Hill at the moment. It appears the prevailing winds all point signs to the House agreeing to accept
the Senate payfors as the compromise between the House and Senate Reauthorization bills.
Hours of Service – The HOS regulations took effect as of July 1, 2013. FMCSA’s new Hours of Service
rule retains the current 11-hour daily driving limit. FMCSA states that they will continue to conduct data
analysis and research to further examine any risks associated with retaining this limit.
On December 13, Congress passed the FY 2015 Cromnibus Bill, which provides funding for the vast
majority of the Federal Government. The bill included language which suspends two parts of the
controversial hours-of-service rule for truck drivers. The provisions which will be suspended are: (1)
require drivers to be off duty from 1 a.m. to 5 a.m. on two consecutive days before restarting their
weekly work clock, and (2) mandate that 168 hours or seven full days pass before a driver can start a
new week. Simply put, the restart rule reverts back to the simple 34 hour restart in effect from 2003 to
June 2013. Under that rule, drivers will be permitted to restart their weekly hours by taking at least 34
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consecutive hour’s off-duty, regardless of whether or not it includes two periods of time between 1
a.m. and 5 a.m. A driver can also utilize the restart more than one time per week if necessary.
The funding package was extended without additionally HOS language, but the provision did not roll
back into implementation, because the language also directed the Department of Transportation to
conduct a study comparing the effectiveness of the 34-hour restart rules in place before July 1, 2013
with those that took effect after. The implementation is contingent based on the release of the study
and corrective action of any outstanding issues.
National Standard for Hiring Motor Carriers - On July 15, the Senate Commerce Committee approved
the portion of the Highway Bill that is under the committee’s jurisdiction. Unfortunately, despite
Nebraska Senator Deb Fischer’s subcommittee chairmanship and her sponsorship of S. 1454 (the
Senate version of the National Hiring Standard), the Commerce Committee version of the National
Hiring Standard was unfavorable to industry. In particular, the interim hiring standard as written would
have allowed the use of CSA crash data and violations in lawsuits alleging negligent selection of a
carrier.
The Interim Hiring Standard as approved by the Commerce Committee bill, was not included in a
leadership-negotiated Highway Bill package that was considered by the full Senate at the end of July.
Senator Fischer filed an amendment, which would have required a vote by the Senate, to insert the
original text of S. 1454 in the bill. However, Majority Leader McConnell limited the consideration of
amendments, and the Senate passed a Highway Bill with no Hiring Standard language on July 30.
The House Transportation and Infrastructure Committee marked up the policy portion of a long-term
Highway Bill on October 22. The National Hiring Standard as included in the original draft of this bill
(as released on October 16) follows the main focus of S. 1454 and sunsets the hiring standard following
issuance of a final Safety Fitness Determination rule. However, the third prong of the test for hiring a
carrier under the standard has been changed to limit the standard only to those who hire carriers with
“satisfactory” ratings. The path for broadening the standard in Committee or the House floor is
unclear.
Motor Carrier Minimum Insurance Requirements – On Friday, November 28, the Federal Motor Carrier
Safety Administration (FMCSA) published in the Federal Register an Advanced Notice of Proposed
Rulemaking (ANPRM) announcing that the Agency is considering a rulemaking that would increase the
minimum levels of financial responsibility for motor carriers, including liability coverage for bodily injury
or property damage; establish financial responsibility requirements for passenger carrier brokers;
implement financial responsibility requirements for brokers and forwarders, and revise existing rules
concerning self-insurance and trip insurance. The comment period closed at the end of February, and
there were 2,180 comments received.
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H.R. 2577, the Fiscal Year 2016 Transportation, Housing, and Urban Development (THUD)
Appropriations Bill, includes language which prohibits the DOT from using any monies to support an
increase in the minimum insurance requirements of for-hire carrier or to force these insurance
increases upon private carriers. It is likely that this language will be included in both the House and
Senate versions. President Obama has made it clear that he would veto any spending bill that included
HOS language and minimum insurance restrictions will also be a likely target.
S. 1454 – Transportation & Logistics Hiring Reform Act – On Thursday, May 21, 2015 Senator Deb
Fischer (R-NE) along with Senator Roy Blunt (R-MO) introduced S. 1454, the “Transportation and
Logistics Hiring Reform Act”, which would enhance interstate commerce by creating a national hiring
standard for motor carriers. The bill serves as a vital reform measure on addressing the confusing and
conflicting vagaries created by the CSA scores within the marketplace.
S. 1454 would require that before hiring a motor carrier, a shipper, broker, forwarder, and/or receiver
verify that the motor carrier is:

properly registered with the Federal Motor Carrier Safety Administration (FMCSA);

has obtained the minimum insurance; and

has not been given an “unsatisfactory” safety rating.
S. 1454 would prohibit any “data” other than the national hiring standard from being used as
evidence against an entity in a civil action for damages resulting from a claim of negligent selection or
retention of such motor carrier. Furthermore, the bill would require the Agency to complete the Safety
Fitness Determination (SFD) rulemaking within an 18-month period. While a version of S. 1454 was
included in a Commerce Committee-approved surface transportation program reauthorization, the
language weakened the hiring standard to allow for the use of crash data as evidence. In a separate
action, Majority Leader McConnell negotiated a Senate Highway Bill, which was passed on the Senate
floor, which did not include Committee-approved language in several policy areas, and did not include
language for a National Hiring Standard.
S. 1454 amended was included in the Senate Commerce Committee title of the Senate reauthorization
bill, with two provisions that TIA did not support. The language was removed from the floor language
because of concerns offered from the trial attorneys. Senator Fischer offered the language as an
amendment, and was initially included in the McConnell amendment package, but was removed
because opponents vocalized opposition to the language. Senator McConnell made an agreement with
Senator Boxer that any provision that received opposition would be immediately removed and not
considered. Senator Fischer has offered to support in conference, as it is her number one priority.
Unified Carrier Registration Agreement (UCRA) - The Single State Registration System officially ended
on January 1, 2007, and was replaced by the Unified Carrier Registration Agreement (UCR). The UCR
was established in the Highway Reauthorization Bill enacted on August 10, 2005 (SAFETEA-LU, P.L. 109Government Affairs Report
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59). UCR requires all motor carriers (including private, for-hire, and exempt carriers), as well as brokers,
freight forwarders, and leasing companies to register with the United States Department of
Transportation (USDOT) annually. In addition, a broker is required to pay a $76 registration fee.
Currently 41 states are participating in the UCR, but you must register even if you are not domiciled in
one of those participating base states. A base state will be assigned to you. States are starting to ramp
up enforcement of collecting unpaid UCR fees. There are ongoing discussions within industry
stakeholders to introduce legislation to sunset the UCRA. TIA firmly believes that for the UCRA to be a
successful program, the UCRA user fees should be tied to operating authority.
Unified Registration System (URS) – On October 18, 2015, FMCSA announced that it was delaying final
action on the URS rule until September 30, 2016. On Thursday, August 22, 2013, the Federal Motor
Carrier Safety Administration (FMCSA) issued a Final Rule entitled the, “Unified Registration System”.
The Final Rule amends the FMCSA’s regulations to require interstate motor carriers, freight
forwarders, brokers, intermodal equipment providers (IEPs), hazardous materials safety permit (HMSP)
applicants, and cargo tank facilities under FMCSA jurisdiction to submit required registration and
biennial update information to the Agency via a new electronic on-line URS.
FMCSA has announced that it will not meet the October deadline for full implementation of URS. This
was supposed to be the date that FMCSA no longer issued MC, MX, and FF numbers to newly
registered entities, instead issuing USDOT numbers as the sole identifiers for all companies. They have
not announced a date for final implementation, and are continuing to work on the software that will
operate the single-window registration system.
TIA has repeatedly reached out to FMCSA to stay up to date on URS implementation, and has held
numerous conference calls and webinars to reach out to TIA membership to prepare them for this
transition.
URS 2 Rulemaking - In accordance with Section 32106 of MAP-21, FMCSA proposes to adjust the URS
registration fee for new interstate motor carriers, freight forwarders, brokers, intermodal equipment
providers (IEPs), hazardous materials safety permit (HMSP) applicants, and cargo tank facilities under
FMCSA jurisdiction who must register with the Agency to operate in interstate commerce, to implement
several MAP-21 provisions that require changes to the URS regulations, the online Application for
USDOT Number/Operating Authority Registration (Form MCSA-1) and MCSA-1 Instructions, to prohibit
transfers of operating authority registration, and to make several technical amendments to the MCSA-1
Form and Instructions for purposes of clarification. Publication date is set for June 20, 2016.
Ongoing Issues:
C-TPAT Authority for Property Brokers – In the 112th Congress the House passed the SMART Port
Security Act (H.R. 4251), which included language that would require the Secretary of Homeland
Security to develop a pilot program for non-asset based property brokers to participate in the C-TPAT
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program. The pilot program will include at least five member companies and last at least one year.
Although, the SMART Port Security Act was passed out of the House, the Senate never took action on
the bill. TIA staff has met with CBP officials who are still firm in their beliefs that brokers bring nothing to
the table and therefore should not be eligible to participate in the voluntary program.
California Air Resources Board (CARB) TRU ATCM - The Transport Refrigeration Unit (TRU) Airborne
Toxic Control Measure (ATCM) affects all brokers, carriers, drivers, shippers and receivers and holds
them responsible for contracting non-compliant reefer units traveling on CA highways and railways.
This regulation regulates how “green” the gen-set is and the amount of toxic diesel particulate
matter is put into the air. The penalties are $1,000 for each incident and up to $10,000 for multiple
offenses.
California Air Resources Board (CARB) GHG Tractor-Trailer Regulation - The Greenhouse Gas
Tractor/Trailer Regulation affects only CA based brokers, carriers, drivers, shippers and receivers, which
is defined to include agents and remote offices. This regulation holds CA based brokers responsible for
hiring non-compliant 53ft or longer trailers and the heavy-duty tractors that haul them. The regulation
regulates the green technologies installed on the trailers and tractors (side skirts, fairings, low-resistance
rolling tires, etc.) The penalties are $1,000 for each incident and up to $10,000 for multiple offenses.
California Air Resources Board (CARB) Truck & Bus Regulation - Beginning January 1, 2012, the
regulation phases in requirements for heavier trucks to reduce PM emissions with exhaust retrofit filters
that capture pollutants before they are emitted to the air or by replacing vehicles with newer vehicles
that are originally equipped with PM filters. Starting January 1, 2015, the regulation requires accelerated
replacements of both lighter and heavier vehicles that do not have PM filters installed. From 2020 to
2023 nearly all older vehicles would need to be upgraded to have exhaust emissions meeting 2010
model year engine emissions levels.
A California-based broker who arranges the transportation of a motor carrier traveling in the State of
California needs to “verify” that each hired company is either in-compliance with the regulation or
has reported compliance to CARB. Motor carriers that register with the CARB to use flexible compliance
options must report information about all of the heavier vehicles in their fleet that operate in California
and can print a certificate that confirms their reporting.
California-based brokers should request this certificate from carriers to ensure compliance. Additionally,
brokers can utilize the CARB truck and bus regulation online database to search for compliant carriers.
If the carrier does not have a certificate, CARB recommends that brokers should obtain other
documentation and a statement from the carrier that they are aware of the CARB Truck and Bus
Regulation. This will demonstrate that the carrier is in compliance.
California Air Resources Board (CARB) Idling ATCM – At the March 11th ATCM public workshop, CARB
staff announced that the board would be considering in October a proposed regulatory amendment,
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that would hold California-based brokers, shippers, and receivers responsible for violations of the idling
regulations. Following this workshop, TIA members and staff through the Environment and Hazmat
Committee held a conference call with CARB officials and expressed their concerns over the proposed
requirement. The conference call was constructive and provided both sides an opportunity to express
their concerns. On Monday, August 26, 2013, the California Air Resources Board (CARB) released their
draft amendments for the Airborne Toxic Control Measure (ATCM). The draft language removed the
broker and shipper requirement, which would have held a broker or shipper responsible for hiring a
motor carrier with an outstanding idling violation.
Employee Misclassifications: Independent Contractor vs. Employee - In February 2010, Vice President
Biden’s Middle Class Task Force as part of the Fiscal Year 2011 Budget promulgated that the
Department of Labor (DOL) would be launching a new initiative to prevent employees from being
misclassified as independent contractors. The DOL was appropriated $25 million for additional
enforcement staff and to make funds available to offer States competitive grants to bolster support and
encourage information sharing between the Federal Government and States. In September 2011,
Secretary of Labor Hilda Solis announced a Memorandum of Understanding (MOU) with the Internal
Revenue Service (IRS). Under the agreement the two agencies would work together and share
information to decrease the number of misclassifications, help reduce the tax gap, and to improve
compliance with Federal laws. Since the signing of the MOU with the IRS, thirteen states have signed
separate MOUs with the Department of Labor Wage and Hour Division, and other DOL departments.
These states include:
•
Illinois,
•
Missouri,
•
California,
•
Louisiana,
•
Montana,
•
Colorado,
•
Maryland,
•
Utah, and
•
Connecticut,
•
Massachusetts,
•
Washington.
•
Hawaii,
•
Minnesota,
TIA is working with the U.S. Chamber of Commerce, the Messenger Courier Association of America,
and TIA members to address this issue at Federal and State levels. TIA has facilitated in preparation of a
Fair Labor Standards Act Framework, which will ultimately alleviate the potential for future lawsuits.
This issue will likely be addressed in a comprehensive tax reform package when and if Congress
considers one.
Since January of 2013, TIA has been following the actions of New York, New Jersey and Connecticut
which have all moved and had legislation signed into law pertaining to this issue. Recently, Governor
Chris Christie vetoed legislation in New Jersey that sought to redefine the Independent Contractor
model, essentially eliminating the practice as it works today.
Employee Misclassifications: Exempt vs. Non-Exempt (Fair Labor Standards Act) – A growing concern,
especially among our largest members, is the possibility of class action suits about the classification of
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inside sales representatives as non-exempt from overtime. In the beginning of July 2015, the
Administration proposed increasing the wage threshold used to determine whether an employee is
exempt or non-exempt from overtime. The proposal would increase the salary threshold from $455
per week ($23,660 per year) to $970 per week ($50,400 per year). While the Department of Labor also
considered changes to the duties tests, which are used by employers in combination with the salary
threshold to determine the exemption status for employees, the Department declined to include
changes to the duties tests in this rulemaking. The Department of Labor set a September 4, 2015
deadline for public comments. TIA is working with members to determine the impacts of the proposed
higher salary thresholds on employee compensation.
Federal Maritime Commission – On December 10, 2014, TIA submitted comments to a Notice of
Proposed Rulemaking (NPRM) by the Federal Maritime Commission regarding Ocean Transportation
Intermediary licensing and financial responsibility requirements, and the general duties of OTIs. The
ruling was intended to adapt to changing industry conditions and improve regulatory effectiveness.
TIA’s comments noted that the NPRM was a substantial improvement from a May 2013 Advance
Notice of Proposed Rulemaking (ANPRM) which would have been substantially more burdensome to
industry, but raised additional doubts about the need for several items which remained a part of the
proposed rule.
Specifically, TIA took issue with the elements of the proposed rule that would have
1.
2.
3.
Decreased the renewal schedule of OTI licenses and registrations from every two years to every
three, despite the recent harmonizing of domestic broker and freight forwarder licensing with
the current biennial licensing of OTIs under MAP-21.
Required the reporting to FMC by sureties, vessel carriers, and marine terminal operators of
any claims or court actions against OTIs for the Commission to publish on its website.
Restricted the activities of agents of OTIs without clearly defining the activities those agents
may, or may not, perform without a separate license.
The October 2014 NPRM was a substantial improvement over the May 2013 ANPRM, which was the first
significant proposed change to OTI licensing requirements in fourteen years and received over 80
comments from the public. The impact of those comments reduced the scope of the proposed
rulemaking and ensured that complicated regulatory additions such as a proposed tiered claim and
claim processing system were not included. TIA filed comments in support of those changes to the
ANPRM.
Indemnification - Traditionally, motor carriers, 3PLs and shippers have used contracts to set forth their
understandings and govern their business relationships clearly. As part of the contract negotiation
process, the goal is often to shift the risk of liability from one party to the other, the degree of which
depends upon each party’s situation and bargaining strength. In nearly all cases, one extremely hot
button issue during these negotiations is the indemnity provision, which purports to obligate one party
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to assume the liability of the other party for specific types of claims arising from the contract.
Sometimes, these obligations only kick in to the extent the damages are caused by the indemnifying
party’s negligence. Oftentimes, however, these obligations are much further-reaching and require
one party to assume liability for the other party, even when it is not at fault.
Many state legislatures have begun to recognize these contractual inequities, realizing that often one
party may not be in a position to fight the inclusion of such a provision. Over the past few years, more
and more states have passed anti-indemnification legislation in an attempt to help level the playing
field for the parties involved. At least 35 states have passed some form of legislation making specific
types of indemnification provisions unenforceable.
Financial Responsibility for Brokers & Freight Forwarders – On Wednesday, September 4th, 2014 the
Federal Motor Carrier Safety Administration (FMCSA) announced the release of guidance concerning
the implementation of certain provisions of the Moving Ahead for Progress in the 21st Century Act
(MAP-21) pertaining to persons acting as brokers or a freight forwarder.
Interlining: The Agency states that any entity providing brokerage services is required to register for
brokerage authority by October 1, 2013. The Agency will continue to allow motor carriers to interline
provided the originating carrier picks up and transports the load as part of a single continuous
transportation movement under its own operating authority or the authority of the originating motor
carrier.
Financial Responsibility: The Agency confirms that all regulated brokers and freight forwarders must
obtain and file with FMCSA a surety bond or trust fund agreement in the amount of $75,000 by
October 1, 2013. The Agency will not be accepting group surety bonds or trust funds to satisfy the
financial requirements at this time. The revocation period for the bonding requirements will also be
phased-in over a two month period. Entities that do not have their bond in place by October 1st, will
receive a warning letter by November 1st and if no action is taken by the end of the month or early
December, the operating authority will be terminated.
In regard to companies that have broker and freight forwarder authority, the Agency states that one
$75,000 bond or trust fund is sufficient as long as the legal entity holding the authorities is the same.
The company will be required to file separate BMC-84/85 forms for the broker and freight forwarder
authority, however, the underlying bond or trust fund can be the same for both operations.
TIA has submitted a petition for rulemaking on a number of provisions, including the joint
broker/forwarder bond, insolvent trust companies, and making payment of claims publicly available.
PHMSA Database - Currently, the PHMSA database is updated with FMCSA information once a month.
This has obviously created a huge problem for brokers to identify which carriers still hold an active
Hazmat certification. TIA has met with Administrator Ferro and an official from PHMSA. TIA has been
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working with PHMSA on addresses an issue with their database that is creating a security risk. TIA has
had discussions with Congressman Mike Rogers (R-3rd/AL), Chairman of the Transportation Security
Subcommittee, who has sent Congressional inquiries to the PHMSA office. PHMSA had made TIA
aware of a few minor changes that “improve” the database, but the underlining problem has not
been addressed and will likely not be until late 2013, in the next wave of PHMSA database updates.
Mexican Cross Border Pilot Program – As of November 4, 2013, there have been 13 companies granted
operating authority. These 13 companies include 43 vehicles and 39 drivers, and have crossed into the
US 8,544 times and have been subject to 3,974 inspections. Of the 13 active companies only nine have
been given a satisfactory safety rating, with the remaining four being “unrated.” In July 2011, the pilot
program was finalized to comply with a provision of NAFTA. Agency officials are worried by the low
participation in the cross-border trucking program with Mexico and that this could ultimately
jeopardize the program. OOIDA and the Teamsters union have both filed lawsuits to stop the pilot
program.
Scanning & Screening of Cargo – TIA supports the congressional mandate that 100 percent of all cargo
containers originating outside of the United States and have been considered high risk, be subject to a
thorough screening by security authorities.
SmartWay –TIA was named one of the 2014 Affiliate Challenge winners and facilitated that the awards
ceremony at the 2015 Annual Conference. Logistics companies will be ranked and have their carbon
footprint tracked on a variety of emissions factors based on the carriers that they contract. Initially,
SmartWay was publishing scores for logistics companies (1-5), but SmartWay shippers were paying too
much attention to those rankings and they were removed. SmartWay also stated that brokers must
contract with at least 75% SmartWay certified carriers in order to use the SmartWay Transport Partner
Guidelines. TIA staff and members advocated for the removal of this unfair requirement, and was
recently told by EPA staff the barrier has been removed. All entities that submit their information will be
able to use the logo for promotion and sales marketing.
Truck Size and Weight - Although, TIA does not take a formal position on size and weight, the
Committee will track the issue and comment when and if it is necessary. MAP-21 required the USDOT
to conduct a Comprehensive Truck Size and Weight Limits Study (MAP-21 §32801) addressing
differences in safety risks, infrastructure impacts, and the effect on levels of enforcement between trucks
operating at or within federal truck size and weight (TSW) limits and trucks legally operating in excess
of federal limits; comparing and contrasting the potential safety and infrastructure impacts of
alternative configurations (including configurations that exceed current federal TSW limits) to the
current Federal TSW law and regulations; and, estimating the effects of freight diversion due to these
alternative configurations. Basically, the study found that there wasn’t enough significant data to
accurately predict the safety impacts of increases truck size and weight. The Agencies’
recommendation was to maintain current limits.
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TWIC - United States workers employed at nearly 2,600 marine facilities and onboard nearly 13,000
United States-flag vessels are required to carry a Transportation Worker Identification Credential (TWIC)
under the Maritime Transportation Security Act of 2002 (MTSA). Department of Homeland Security
(DHS) regulations require merchant mariners who hold a Coast Guard-issued Merchant Mariner
Credential (MMC) and individuals who require unescorted access to secure areas of MTSA regulated
vessels and facilities to carry a TWIC.
To date, nearly two million transportation workers have applied for and received a TWIC. Applicants
must pay $132.50 to obtain the TWIC, and make two or more trips to an enrollment center to apply for,
and then to pick up and activate their TWIC. In many instances, the nearest enrollment center is
hundreds of miles from a worker’s home making the process all the more burdensome.
Due to security incidents in recent years, there has been ongoing concern in Congress and the general
public about ensuring that individuals accessing bases have proper credentials. At the same time,
private sector transportation service providers struggle with ensuring that their drivers and employees
gain timely access to base through established screening protocols such as TWIC. Through the
National Defense Transportation Association (NDTA), industry groups including TIA and the American
Trucking Associations continue working with Department of Defense leadership to ensure that a single
standardized system of entry is put in place by all services so that private sector contractors can provide
timely best-value service without undue delays for unnecessary security screenings.
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