MAP-21 Moving Ahead for Progress in the 21st Century

Transcription

1 MAP-21 Moving Ahead for Progress in the 21st Century presented by Ken Hoffman of Dysart Taylor Cotter McMonigle & Montemore, P.C. Transportation & Logistics Council Nashville, Tennessee March 18, 2014 Established 1934

2 Statutory Sections in 49 U.S.C. Section Can only provide motor carrier, freight forwarder or broker services if registered Every motor carrier, freight forwarder or broker is to be issued its own distinctive registration number Registration number will include an indicator identifying the type of service provided Each agreement to provide service shall specify in writing the authority under which the entity is providing service. 2

3 Statutory Sections in 49 U.S.C. Section A motor carrier may not broker transportation services unless the motor carrier has registered as a broker under this chapter A motor carrier may only provide transportation of property with interchanges if the originating carrier: Physically transports the cargo at some point; and Retains liability for the cargo and for payment of interchanged carriers. 3

4 Statutory Sections in 49 U.S.C. Section Freight forwarder may not provide services as a motor carrier unless it registers separately as a motor carrier Freight forwarder must employ an officer with at least 3 years of relevant experience or provide satisfactory evidence of knowledge of related rules, regulations and industry practices 4

5 Statutory Sections in 49 U.S.C. Section Broker may not provide motor carrier services unless registered separately as a motor carrier Broker must employ an officer with at least 3 years of relevant experience or provide satisfactory evidence of knowledge of related rules, regulations and industry practices 5

6 Statutory Sections in 49 U.S.C. Section Motor Carriers, Freight Forwarders and Brokers must renew their registrations by 2016 Must renew registration at least every 5 years 6

7 Statutory Sections in 49 U.S.C. Section Raises broker bond/trust fund requirement to $75K Raises freight forwarder bond/trust fund requirements to $75K 7

8 FMCSA FAQ s and Guidelines Financial Security Requirements One $75K bond or trust fund is sufficient to cover both broker and freight forwarder authority IF the legal entity holding the authorities is the same If broker and freight forwarder operations are conducted under separate but affiliated companies, each must have a separate bond or trust fund 8

9 FMCSA FAQ s and Guidelines Financial Security Requirements Riders/endorsements to current surety bonds are permissible means of complying with the new $75K requirement provided that a new BMC-84 form for the full limits of liability is on file with FMCSA. May not use group surety bonds or trust funds to satisfy FMCSA s financial responsibility requirements 9

10 Statutory Sections in 49 U.S.C. Section Broker can only operate as a broker if it is registered as a broker and provides $75K bond/trust fund Civil penalties of up to $10K for knowing violations AND can be held liable for the full amount of any valid claim (without regard to amount) Penalties apply jointly and severally to ALL corporations and INDIVIDUALLY to all officers, directors and principals Broker of household goods is liable for a civil penalty of not less than $25K per violation 10

11 Private Right of Action Key provision of Section is that it provides a private right of action against the listed persons and entities, jointly and severally Anyone harmed can go after them Not limited to FMCSA, law enforcement, or other government agency to go after them 11

12 What is a broker? Person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation. 12

13 What is a freight forwarder? Person or entity that holds itself out to the general public as providing transportation of property for compensation and in the ordinary course of its business Assembles and consolidates shipments and performs or provides for break-bulk and distribution operations of shipments Assumes responsibility for the transportation from the place of receipt to the place of destination Uses for any part of the transportation a rail, motor, or water carrier subject to the jurisdiction of either FMCSA or the Surface Transportation Board 13

14 FMCSA FAQ s and Guidelines Short Answer on Registrations Freight forwarders that perform both freight forwarder services and motor carrier services must register as both a freight forwarder and a motor carrier Motor carriers that broker loads, even occasionally, MUST register as BOTH a motor carrier and a broker 14

15 Freight Interlining A motor carrier that is performing part of a single continuous transportation movement as an interline operation can perform that service under its own operating authority OR the authority of the originating motor carrier Example - Where point of origin is Washington, DC, and the final destination is LA, Motor Carrier A may interline with Motor Carrier B in San Antonio, TX. Motor Carrier B will then complete the transportation of the shipment from San Antonio to LA. 15

16 FMCSA FAQ s and Guidelines Timelines Companies providing broker or freight forwarding services, including motor carriers, were required to obtain the appropriate operating authorities by October 1, 2012 The $75K bond/trust fund requirement was effective October 1,

17 FMCSA FAQ s and Guidelines Timelines FMCSA allowed a 60-day phase in enforcement period after October 1, 2013 November 1, 2013 mailing notices to brokers and freight forwarders that had not met the $75K requirement Additional 30 days advance notice before revoking operating authority 17

18 FMCSA FAQ s and Guidelines Is a broker required to process loss and damage claims? No. A claim for cargo loss and damage must be filed with the appropriate motor carrier Brokers may assist shippers in filing claims with the responsible motor carrier Key word is required 18

19 FMCSA FAQ s and Guidelines Cargo Insurance Non-household goods freight forwarders are not required to obtain cargo insurance Household goods freight forwarders must obtain cargo insurance in the amount of $5K for loss of or damage to household goods carried on any one motor vehicle and in the amount of $10K for loss of or damage to household goods occurring at any one time and place 19

20 Contact Us Ken Hoffman Shareholder/Director main direct Dysart Taylor Cotter McMonigle & Montemore, P.C Madison Avenue, Suite 200 Kansas City, MO