Month: December 2013

Categories
Business Freight Brokers

35% of brokers have authority revoked in bond increase measure, broker group says

The number of freight brokers disappearing from the federal rolls has been increasing by the hundreds every day since Dec. 1, following the new requirement to carry a $75,000 bond, boosted from $10,000 by the MAP-21 highway funding act passed last year.

Today, 35 percent of brokers in business at the beginning of the month no longer have active authority, says James Lamb, president of the Association of Independent Property Brokers & Agents.

As of noon, Dec. 10, 7,561 fewer authorized brokers were active than on Dec. 1, Lamb said, and that number will likely continue to rise until around Dec. 15 — 30 days after the last of the notices of investigation were sent to brokers by the Federal Motor Carrier Safety Administration. Overdrive reported last week on the decrease in brokers and AIPBA’s court fight against the bond increase. Click here to see it.

That number, however, could also include brokers who had their licenses revoked for reasons other than not complying with the bond increase, said Norita Taylor, spokesperson for the Owner-Operator Independent Drivers Association. She also said OOIDA hasn’t heard from any of its members about losing brokers.

FMCSA published a notice in September 2012 saying it would revoke operating authority from brokers who did not comply with the bond increase by Dec. 1, even though the MAP-21 bill required brokers to comply with the increase by Oct. 1.

Brokers are now required to carry a surety bond of $75,000 — up from the previously required $10,000. OOIDA supported the increase, saying it would better protect owner-operators who otherwise would not have been paid by over-extended brokers.

Taylor said the increase helps protect owner-operators from fraudulent brokers. “While most brokers provide a valuable service, the previous system left too much room for fraud where funds were collected from shippers but not paid to owner-operators.”

The American Trucking Associations and the Transportation Intermediaries Association also support the increase.

Because of the 60-day grace period and the time that brokers had to comply with the bond increase, Lamb says it’s “highly unlikely a significant amount” of the non-compliant brokers will be reinstated.

Categories
Freight Brokers Owner Operators Trucker News

Thousands of brokers lose Authority

The number of brokers registered with FMCSA may be dropping — coming on the heels of the enforcement date of the increase in the minimum surety bond required for brokers to carry — but some of the numbers being tossed out don’t represent what’s actually happening, said Chris Burroughs, who’s with the government affairs staff of the Transportation Intermediaries Association, a broker trade group.

Rather than a non-compliance issue, Burroughs said, the number of brokers losing their authority (more than 7,500 by noon Dec. 10) is also dropping because the Federal Motor Carrier Safety Administration database was out of date, he said. “We feel like there were a lot of people out there who had active authority but weren’t actively doing business and hadn’t been for some time,” he said. “The database had a lot of scrubbing to do.”

A,TI along with the American Trucking Associations and the Owner-Operator Independent Drivers Association, supported the increase, which was included in the MAP-21 highway funding act passed last year.

The increase to $75,000, Burroughs said, was something TIA, OOIDA and ATA sat down to work out, finding a compromise that worked for all three groups.

Even though the broker numbers are falling, he said, TIA “absolutely still support(s)” the increase, and the impact to the brokerage industry and the trucking industry will be “minimal, if nothing at all.”

Another broker trade group, the Association of Independent Property Brokers & Agents, is fighting the increase in court, and its president, James Lamb, has said up to 75 percent of current brokers could be forced out of the business by the bond increase. The increase will have a particularly harsh impact on small brokers, Lamb said.

Burroughs said 70 percent of TIA’s membership is made up of brokers with less than $2 million in annual revenue, and the effect on TIA’s membership has been minimal, he said.

Categories
Business Carriers Owner Operators

Highway Truck Fatalities Rose 8.9% Last Year

A new report from the DOT’s National Highway Traffic Safety Administration (NHTSA) states that the number of large truck occupant fatalities increased by 8.9% between 2011 and 2012 up to 697. In 2011, the number of deaths was 20% higher than in 2010.

Despite the increase in the past few years, deaths among occupants of large trucks are the lowest they’ve been since 1950.

These numbers are also reflected in the total number of highway fatalities. In 2012, there were 33,561 highway fatalities. The NHTSA says that the number of highway deaths are at “historic lows.”

The ATA commented on the report saying that the NHTSA is not using specific enough categories to accurately portray the data. They note that the NHTSA counts non-freight-hauling vehicles as “large trucks” which is causing people to incorrectly believe that freight-hauling trucks are more prone to fatal accidents than they actually are. According to the ATA, the report “paints an incomplete and misleading picture of the nation’s trucking industry.”

Categories
Business Carriers Freight Brokers Freight Factors

Illegal Brokerage Among Carriers Still Gray Area

On October 1, the FMCSA issued a Final Rule that adopts regulations required by MAP-21. The rule includes the provision which sets a minimum financial security of $75,000 for brokers and freight forwarders, including carriers that occasionally broker loads.

In the Final Rule, the FMCSA states that compliance with the new rule will cost the industry $15.9 million initially. It has identified 2,212 freight forwarders that are impacted and estimates that the financial impact will be $1.69 million in the first year. For the 21,565 brokers on record the initial cost will be $14.21 million.

You’ll notice that there is no estimate for the carriers that need to obtain a $75K bond and broker authority to comply. That’s because the FMCSA admits that it has little information as to the extent of the unlicensed broker population within the motor carrier industry, which makes estimating the costs to this group difficult, if not impossible.

Since this population is difficult to identify, the FMCSA will initially work with industry groups to get complaint information on motor carriers that are acting as brokers illegally through its National Consumer Complaint Database.

The FMCSA also warns that carriers that act as unlicensed brokers may be subject to private civil actions.

So, unless you are moving every load on your own equipment and under your own carrier authority (for at least one leg of the journey), you need to obtain broker authority and the $75,000 bond that goes with it.

If you’re a DAT customer, learn more about a special bond offering for DAT customers through preferred solutions provider Integro.

As we’ve noted before, you must have active operating authority as a broker if you want to post your loads to DAT Load Boards.

For more information on how MAP-21 impacts carriers, read: Surprise! The Broker Bond Affects Carriers.

Categories
Carriers Trucker News

CSA and improving driver respect are priorities in 2014

During his luncheon address to fleet executives at the 2013 CCJ Fall Symposium in Scottsdale, Ariz., American Trucking Associations chairman and president of Bullog Hiway Express Phil Byrd, Sr., said three key legislative focuses for ATA in 2014 are electronic logging devices, rolling back the changes to hours-of-service rules, improving components of the Compliance Safety Accountability program.

ATA is working with Federal Motor Carrier Safety Administration Administrator Anne Ferro to work out some of the “fundamental flaws” with the program, including “having no-fault crashes removed from CSA,” said Byrd.

ATA has been a strong supporter in recently introduced H.R. bill 3413 that would revert to hours-of-service rules that existed prior to the current rules that took effect in July. “I would submit that current HOS rules impede the free-flow movement of goods along U.S. highways an exacerbates congestion in metropolitan areas and will make the driver shortage worse,” said Byrd, who added that he anticipates a hearing at the House Transportation & Infrastructure Committee in the near future.

Byrd says early statistics show a 3 to 4 percent loss in productivity among large fleets, but says the impact on his own business has been greater.

Highway infrastructure funding is also a priority for ATA, but Byrd said until the stalemate between Republicans and Democrats is broken, nothing is likely to change.

“Highways are literally crumbling beneath our trucks and cars,” said Byrd. “[Congress] knows how to fix the problem, but doesn’t have the will to do it.”

Finally, Byrd said improving driver respect is a cause he plans to champion during his tenure as ATA chairman. “These incredible men and women — US trucking fleet drivers — they brave the dark of night, the ice and snow of the mountain peaks, the heat of the desert, the congestion of America’s highways everyday to deliver America’s goods,” he said. “Everything we need, want and desire comes to you by truck. These brave men and women, these incredible individuals, are disrespected at every turn. When they go to our shippers’ door to pick up, their time is disrespected, they don’t have adequate facilities. Then they get that load secured and get that bill of lading in-hand and go out on the public highway system. And because the motoring public doesn’t understand how we operate as an industry, they are disrespected by the people we share the roads with…when they arrive at our consignees to deliver the goods they receive much of the same disrespect when they loaded the freight. We have to change that. They deserve better. I believe that until we restore the respect that our drivers deserve we can’t expect people to come into our industry to be mistreated and misunderstood.”