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FMCSA seeks feedback on the broker and forwarder regulations

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With its recent “advance notice of proposed rulemaking,” the Federal Motor Carrier Safety Administration (FMCSA) is seeking to invoke tough new financial responsibility requirements on freight forwarders and brokers. New rules, including suspension and revocation of licenses, would punish brokers and forwarders who fall below $75,000 of federally required surety bonds. Brokers and forwarders have until Nov. 27 to provide comments and suggestions to help the FMCSA in implementing fair and efficient regulations.

The federal agency is also asking for input in areas involving the Moving Ahead for Progress in the 21st Century Act (MAP-21) which was passed by Congress in 2012. This is the second time the agency has asked for comments on rulemaking. The “advance notice” identifies eight areas of concern:

• The nature of group surety bonds and group trust funds.
• Assets readily available in a trust fund.
• The immediate suspension of broker/freight forwarder operating authority in instances of insufficient financial security.
• The responsibilities of sureties or trusts in cases of broker/freight forwarder financial failure or insolvency.
• The enforcement authority of the FMCSA over non-compliant surety providers.
• Criteria for entities to be eligible to provide trust funds for BMC-85 filings.
•Recommended changes and revisions to the BMC-84 and BMC-85 forms.
• Financial responsibility requirements for brokers of household goods (HHG) and current payment models in the HHG industry.

In MAP-21, Congress mandated that the FMCSA should immediately suspend brokers and forwarders whose financial responsibility goes under the $75,000 required amount. To determine when and how licenses should be suspended or revoked, the agency is looking for feedback on an appropriate “cushion time” for brokers when a claim is filed.

In a written statement, the agency said, “FMCSA seeks comment on the appropriate cushion time for brokers or freight forwarders to respond to claims made to the guarantors, valid or otherwise. Such a grace period would seem to give firms adequate time to adjudicate claims and settlements internally, as well as price in the costs associated with any claims relating to contract noncompliance.”

At this time, the FMCSA has not yet clarified when and how it will suspend licenses, but it has moved closer to full enforcement of the MAP-21 rules. Obviously, it is important for interested parties to provide input to the agency before rules go into effect.

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