Friday, June 18, 2010

Trucking And Freight Forwarding Bill Causing Concern

New Legislation Sets Tougher Regulations and Penalties for Carriers and Agents
Shipping News Feature

US – The Motor Carrier Protection Act just put forward by two Senators is causing ripples amongst the trucking and shipping industries. The bill proposed by Minnesota Democrat Amy Klobuchar and Republican Olympia Snowe from Maine is designed to toughen up the criteria needed by companies wishing to take responsibility for cargo in their care and applicable to all freight brokers and freight forwarders.

The two Senators seem to have a very poor opinion of the industry. “Often motor vehicle operators fall victim to the deceitful behaviour of fly-by-night brokers and freight forwarders who engage in preposterous criminal activities, such as financial fraud,” is one quote from Senator Snowe, who believes sanctions against criminal agents need hardening. Senator Klobuchar says small truckers are “preyed upon” by fraudulent freight forwarders.

Industry critics say that this legislation merely increases the power of the larger carriers and will squeeze out the little men, many of whom will fall foul of the necessity to have a brokers/forwarders licence before they can subcontract any of their work to another party.

The draft outline of the proposed regulations are as follows; each licensee must lodge a broker bond for $100,000 (currently $10,000), the Federal Motor Carrier Safety Administration (FMCSA) to lay out specific guidelines for applicants plus tougher regulations overall. Licences to be reviewed annually or be automatically revoked with costs of licences set to cover the FMCSA’s enforcement budget. Stricter penalties for defaulters, including an unlimited liability for freight costs against any unlicensed broker or freight forwarder.

In addition each registration will be exclusive to each regulatory authority and documents for every transaction must show the license number and the authority which granted it plus the bond providers and their administration procedures will also be strictly controlled.

Motor carriers will doubtless be divided on the issue. To some it will mean more cost and more administration, with one slip potentially costing them serious money, to others, it will remove completely the rogue elements that plague the industries lower end and feed off smaller hauliers made desperate by difficult times.

Photo: Senators Snowe and Klobuchar