NASSTRAC Files Concerns About FMCSA's Potential Overreach Into Shipper Operations

Washington, DC — NASSTRAC, an industry association that represents the interests of freight shippers in all modes of transportation, filed comments with the Federal Motor Carrier Safety Administration (FMCSA) in response to the agency's draft of its 2011-2016 strategic plan. NASSTRAC filed jointly with the Health & Personal Care Logistics Conference, which represents manufacturers, shippers and receivers of pharmaceuticals and health and personal care products. The basis of the filing is that both associations have significant concerns over FMCSA's potential regulation, and ultimately an overreach, into the operations of shippers in the proposed plan.

NASSTRAC, along with HPCLC, has regularly addressed transportation, logistics and supply chain issues before federal and state agencies, the courts, and Congress. Most recently, NASSTRAC filed comments on the FMCSA's proposed drive hours of service rules, and supplemental comments on the four studies added to the record. While NASSTRAC continues to support increased safety on the nation's highway, NASSTRAC strongly oppose plans by FMCSA to seek authority from Congress to regulate shippers, receivers, brokers and freight forwarders.

In previous comments filed with FMCSA, NASSTRAC has consistently urged the agency to balance safety improvement goals with recognition of the critical role played by the trucking industry in supporting shippers and receivers of goods, and through them, the entire U.S. economy. Shippers who are members of NASSTRAC devote extensive efforts and resources to facilitating motor carrier service, and have received and implemented many recommendations from service providers that improve supply chain safety efficiency and security. Unsafe or inefficient operations are not goals of professional supply chain management by any participant in that process.

As a result, shippers, receivers and intermediaries have worked closely with motor carriers to minimize inventories, streamline supply chains, drive down costs and prices, and increase economies during a time period of rising truck miles traveled and decreased highway crash and fatality rates involving trucks. In fact, the Department of Transportation recently announced that the rate of highway fatalities from accidents involving large trucks had declined to the lowest level since 1975, when recording on such statistics began. These developments show a marketplace that meets the economic goals of Congress when it deregulated the trucking industry in 1980, and promotes increased highway safety. "Clearly, our marketplace has no need for, nor would it benefit from, a massive expansion of FMCSA regulation," said John Cutler, NASSTRAC's legal counsel.

According to NASSTRAC's filing with the FMCSA, the agency's draft strategic plan proposes such an expansion through its goal of "focusing outreach, oversight, and enforcement resources on the entire CMV transportation life-cycle." NASSTRAC emphasizes that FMCSA identifies "all the entities that control or influence the operation of CMVs, including all parties involved in the transport and logistics supply chain" as potential targets of FMCSA regulation. FMCSA apparently recognizes that its current jurisdiction is not so broad. NASSTRAC's concern is that FMCSA's response is not to accomplish more with the authority it has, but to ask Congress to allow it to regulate millions of additional U.S. businesses. NASSTRAC's filing underscored strategy plan at 6 where the first objective is to identify gaps in current legislative and regulatory authorities that prevent FMCSA from reaching certain elements of the CMV transportation life-cycle (e.g., entities touching roadway movement of passengers and freight: shippers, receivers, brokers, freight forwarders) who may have a deleterious effect on safety through their actions.

FMCSA's proposed plan states its goal as making safety a priority within the CMV transportation life-cycle but also cites other societal goals to include security, hazmat safety, consumer protection, and other DOT objectives. "Yet it's remarkable that FMCSA doesn't identify the timely, dependable and cost-effective transportation of goods between businesses and from businesses to consumers as part of its goals," said Cutler. "This is the fundamental reason we have a trucking industry. To the extent that excessive regulation undermines this goal, motor carriers, their customers, consumers and the economy will be served poorly. Costs would far exceed benefits if FMCSA regulation were extended to shippers, receivers and intermediaries."

NASSTRAC suspects that FMCSA's plans to expand its regulatory jurisdiction reflects complaints by truck drivers about time spent waiting to load and unload, as opposed to driving loaded miles. If this is the case, NASSTRAC suggests there are other entities contributing to the problem, including other carriers; federal, state and local officials; and other entities that are less susceptible to pressure by carries than are shippers, receivers and intermediaries.

NASSTRAC also points out there are rail shippers and receivers that do not or cannot load or unload rail cars right away, and that railroads impose demurrage charges to deal with these situations, but neither the Surface Transportation Board nor its predecessor, the Interstate Commerce Commission, has attempted to regulate shippers or receivers of freight. To this point, motor carriers are free to impose detention charges to deter shipper delays in loading and unloading. Alternatively, motor carriers may drop trailers for loading or unloading at the shipper's or receiver's convenience, so that drivers are not required to wait. Motor carriers also can publish provisions in their rules tariffs that penalize shipper conduct that does not meet industry norms. Ultimately, motor carriers have the option of declining business from shippers, receivers or intermediaries that do not act responsibly.

Judging from some complaints reviewed by NASSTRAC and HPCLC, it appears that some truck drivers are upset that motor carriers do not use the detention charges they collect to pay affected drivers. This is an issue of employee compensation, not safety. The same is true of some drivers' desire to be paid by the hour rather than by the mile. There also are legal remedies if shippers, receivers or intermediaries encourage or induce drivers to violate safety requirements, including hours of service, and the drivers agree to do so. If these actions result in accidents or death, shippers can expect to be sued along with carriers and may face tort liability. FMCSA is well aware of increasing liability concerns because they have been raised with the agency in connection with adoption of the Compliance, Safety, and Accountability (CSA) program.

The filing by NASSTRAC and HPCLC concludes by asking a key question: If FMCSA were to take on responsibility for regulating the CMV transportation life-cycle, what regulatory initiatives does the agency have in mind? "Apparently FMCSA is asking Congress to give it authorization to regulate shippers, receivers, brokers and freight forwarders based on the premise that highway safety is not affected solely by motor carriers and truck drivers," said Cutler. "This premise is unexceptionable. Both NASSTRAC and HPCLC use this filing to make their point that they do not believe regulation of shippers, receivers and intermediaries is either necessary or desirable." To view the filing to the FMCSA opposing its draft 2011-2016 strategic plan, visit www.FreightAdvocacy.org.

NASSTRAC provides education, advocacy, provider relations, and networking for professionals involved in all modes of transportation, ranging from full truckload and LTL to containerization and global logistics. For more information, visit www.NASSTRAC.org.
 

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