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Regulatory and Legislative Update - January 2023

January 18, 2023 | By
Hot Shot Trucking Regulatory and Legislative Update - January 2023
TEANA

Contents

Regulation and Enforcement

Legislation

Advocacy and Comment

 

Regulation and Enforcement

FMCSA proposes changes in broker and forwarder requirements

FMCSA has issued a notice of proposed rulemaking (NPRM) related to establish financial responsibility requirements for brokers and freight forwarders as required by the 2012 law known as Moving Ahead for Progress in the 21st Century Act (MAP-21). The NPRM proposes regulations in five areas. The following is a summary of those provisions.

Assets readily available – The NPRM proposes allowing brokers or freight forwarders to meet the MAP-21 requirement to have “assets readily available” by maintaining trusts that meet certain criteria, including that the assets can be liquidated within seven calendar days of the event that triggers a payment from the trust, and that do not contain certain specified assets.

Immediate suspension of broker/freight forwarder operating authority – The NPRM proposes that “available financial security” falls below $75,000 when there is a drawdown on the broker or freight forwarder’s surety bond or trust fund. This would occur when a broker or freight forwarder consents to a drawdown or does not respond to a valid notice of claim from the surety or trust provider, causing the provider to pay the claim. It also would happen if the claim against the broker or freight forwarder is converted to a judgment and the surety or trust provider pays the claim. FMCSA also proposes that if a broker or freight forwarder does not replenish funds within seven business days after notice by FMCSA, the agency will issue a notification of suspension of operating authority.

Surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency – FMCSA proposes to define “financial failure or insolvency” as bankruptcy filing or state insolvency filing. The NPRM also would require the surety/trustee to notify FMCSA and initiate cancelation of financial responsibility if it is notified of any insolvency of the broker or freight forwarder. The agency also proposes to publish immediately a notice of failure in the FMCSA Register immediately.

Enforcement authority – FMCSA proposes that to implement MAP-21's requirement for suspension of a surety provider’s authority, the agency would first provide notice of the suspension to the surety/trust fund provider, followed by 30 calendar days for the surety or trust fund provider to respond before a final agency decision is issued. The agency also proposes to add penalties in 49 CFR part 386, appendix B, for violations of the new requirements.

Entities eligible to provide trust funds for BMC-85 filings – FMCSA proposes to remove the rule allowing loan and finance companies to serve as BMC-85 trustees.

The MAP-21 mandates for regulations on broker and forwarder responsibility have been incomplete for over a decade. FMCSA in 2013 implemented one element of the MAP-21 requirements by increasing the financial security amount for brokers to $75,000 and extending that minimum to freight forwarders, which previously had not been subject to financial security requirements. The agency issued an advance NPRM regarding further implementation of the MAP-21 requirements in September 2018 after having held an informal roundtable of stakeholders in May 2016.

Comments on the NPRM are due March 6. To view the January 5 Federal Register notice, visit https://www.federalregister.gov/d/2022-28259.

Exemption rejected for including hair testing results into drug clearinghouse

FMCSA has denied an exemption requested by The Trucking Alliance – a group representing 11 mostly large trucking companies – to amend the definition of actual knowledge of drug use to include the employer’s knowledge of a driver’s positive hair test. Because the Department of Health and Human Services (HHS) has yet to clear hair testing as an alternative to urine testing, hair test results cannot be reported to the drug and alcohol clearinghouse.

The agency had already indicated in its notice seeking comment that it lacked statutory authority to grant the exemption but that it also was required by statute to publish the exemption application. In denying the application, FMCSA confirmed that the agency lacked the authority to grant it as statutory law states that hair testing is not authorized as an alternative to urine testing until HHS establishes federal standards. For the Federal Register notice, visit https://www.federalregister.gov/d/2022-27849.

FMCSA implements 10-year refresher training and certification for medical examiners

FMCSA announced implementation of the regulatory requirement that all medical examiners certified and listed on the agency's National Registry of Certified Medical Examiners maintain their certification by completing refresher training 4 to 5 and 9 to 10 years after certification and passing a recertification test 10 years after certification. The 5-year refresher training had already been implemented and FMCSA is now proceeding with the 10-year training and testing mandate. For the Federal Register notice, visit https://www.federalregister.gov/d/2023-00385.

DOT modal agencies adjust civil penalties for inflation

As required by law, the Department of Transportation (DOT) has issued a rule implementing an annual inflation adjustment for civil penalties levied by DOT modal agencies, including FMCSA. Due to soaring inflation in 2022, the adjustment is much larger than typical at about 7.7%. For more information, including a civil penalty schedule, visit the Federal Register notice at https://www.federalregister.gov/d/2022-28580.

FMCSA to begin work on vehicle crash causation study

In a preliminary step toward conducting a Congressionally mandated study of commercial vehicle crash causation, FMCSA announced plans to collect certain information from states and local jurisdictions. The study was required by the 2021 Infrastructure and Investment Jobs Act. The agency said that in order to plan and execute the study, it needed to collect information on state and local jurisdictions’ interest and ability to participate in the study. It also plans to obtain information on the jurisdictions’ existing crash data collection processes, systems, and resources and their commercial motor vehicle enforcement funding mechanisms and sources. For the Federal Register notice, visit https://www.federalregister.gov/d/2022-28045.

Stevens Transport receives CDL-related exemption

FMCSA has granted an exemption to Stevens Transport, Inc. to allow a commercial learner’s permit (CLP) holder who has passed the skills test but not yet received the CDL document to drive a Stevens commercial motor vehicle accompanied by a CDL holder who is not necessarily in the passenger seat. Exempted drivers must provide documentation of passing the skills test. For the Federal Register notice, visit https://www.federalregister.gov/d/2022-28235.

FMCSA grants two driver training exemptions, denies three

In separate actions published in January and December, FMCSA has granted exemptions from portions of the entry-level driver training regulations in two situations but denied three other applications for exemptions. The exemptions that were granted were to the State of Alaska (https://www.federalregister.gov/d/2022-28242) and Railsback HazMat Safety Professionals, LLC (https://www.federalregister.gov/d/2023-00444). The exemptions rejected had been requested by the National Ground Water Association (https://www.federalregister.gov/d/2023-00445); Western Area Career and Technology Center (https://www.federalregister.gov/d/2022-27848); SBL Truck Driving Academy, Inc. (https://www.federalregister.gov/d/2022-27775).

 

Legislation

Congress passes fiscal 2023 appropriations law

Shortly before the end of the 117th Congress in December, Congress passed the consolidated appropriations act (H.R. 2617), which funds the federal government through September 30, 2023. President Biden signed the bill into law on December 29. As it applies to FMCSA, the law makes no changes in law that were not already included in prior appropriations acts. The law continues the exemption from electronic logging devices held by livestock haulers and the requirement for annual underride guard inspections as recommended by the Government Accountability Office. The law also requires FMCSA to use certified or registered mail to notify new entrants placed out of service under expedited action. For more information on the legislation, which is now Public Law 117-328, visit https://www.congress.gov/bill/117th-congress/house-bill/2617.

On Tuesday, January 17, a group of 13 Stakeholders filed a response in the FMCSA’s “Notification of Interim Guidance: Definitions of Broker and Bona Fide Agents” at https://www.federalregister.gov/d/2022-24923.

While endorsing the Agency’s decision to make no new ruling on dispatch services, Stakeholders pointed out that the Agency’s piecemeal addressing of broker malfeasance does not address the major issue – the lack of any policing, investigation, and prosecution of double brokerage scams and frauds which is victimizing the industry. Stakeholders pointed out that FMCSA has acknowledged it lacks the resources or the mandate to address this major problem.

Stakeholders pointed out that at the DOT level, the Office of Inspector General has the mandate and personnel to establish a task force and has, in fact, recently investigated and prosecuted a major systemic fraud and won a conviction against its principal which involves substantial jail time, restitution and a fine. Stakeholders expressed their willingness to work with the Department and the Agency to implement this proposal and to seek additional earmark funding from Congress as needed.

Otherwise, this holiday month has been relatively quiet as the above summary of events shows. The new year will obviously result in treating unresolved issues including: (1) The Agency’s effort to reboot SMS and the use of data to issue safety ratings; (2) Efforts to promote increased on-truck technology to reduce crashes and insurance premiums; (3) New litigation aimed at overturning AB5 based upon the dormant Commerce Clause – an argument not previously made in the California trucking case; (4) Increased activity before the U.S. Department of Labor and state agencies concerning the future viability of the owner operator model; (5) New efforts to increase minimum BIPD insurance requirements and the potential adverse effects on the cost to small carriers; and (6) Legacy supply chain issues and in particular, the cost of uncompensated detention.

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Modern day hot shot trucking provides the speed and exclusivity you need to meet the most demanding and time-sensitive shipping requirements. We use every resource, avenue, and channel available to ship your freight by ground or air. Designed specifically to address supply and distribution problems that arise without warning, hotshot trucking tactics involve coordinating a network of carriers in a variety of locations. By calling on the vehicles closest to your supply or distribution points, hotshot brokers can fill any sudden gaps in your supply network almost as soon as they happen. This minimizes the disruption to your business and allows you to quickly return to ordinary operations, weathering the storm without skipping a beat.

Automotive

The automotive supply chain already has significant challenges. Don’t let malfunctioning equipment stop the production line. Step on the gas with HotShotTrucking.com’s suite of services that will get you back in the fast lane. With HotShotTrucking.com, companies are devising shipping strategies to swiftly deliver critical parts and equipment — whether it's ground expedite service with sprinter vans, box trucks and 53-foot tractor trailers or air freight and air cargo.

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Aviation & Aerospace

Every moment a commercial airliner sits on the ground, it costs an airline money. Expedited freight services by HotShotTrucking.com can get you back in the air with prompt delivery of parts and equipment throughout North America. We are equipped with the expertise to navigate the complexities of shipping jet engines and other types of loads, and our network of hot shot drivers has extensive experience transporting aviation assets.

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One shipping delay can snowball and cause delays throughout your entire project. You need an experienced 3PL provider who understands the construction industry and has the logistical reach to deliver your freight on time, anywhere. That 3PL partner is HotShotTrucking.com. Whether in the air or on the ground via truck and trailer, we can connect companies to expedited freight services for the prompt delivery of parts and equipment throughout North America.

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Mining & Metals

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Manufacturing

Every moment a manufacturing facility or factory sits idle costs a company money because of the high costs involved. With many manufacturers building to only just-in-time production rates, any disruption threatens parts and vehicle inventories. This is where the speed and expertise of freight services from HotShotTrucking.com can make a difference throughout the entire manufacturing supply chain. We do all the logistical legwork to find the optimal solution for your job, whether it's an exclusive air charter or expedited ground shipping.

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