GAO Prepares Report on Reincarnated Fleets

This story appears in the May 30 print edition of Transport Topics.

The Government Accountability Office is preparing a report on motor carriers that have their operating authority revoked only to come back with a different name to apply for authority again.

GAO, which serves as a government watchdog for Congress, is in the early stages of its work on the issue of so-called reincarnated truck and bus companies, said Brandon Haller, the assistant director in charge of the study.

“The problem of unscrupulous motor carriers that reincarnate themselves and continue to operate under new identities after they have been put out of service for serious safety violations is a long-standing and serious problem,” Sen. Patty Murray (D-Wash.) and Rep. John Olver (D-Mass.) wrote in a letter requesting that GAO conduct the research.

Murray and Olver are the leading Democrats on the Appropriations Committees’ transportation subcommittees in the Senate and House of Representatives, respectively. When they made the request last year, Olver was subcommittee’s chairman, as the Democrats had the majority in the House.

GAO’s research is focused on finding how effective the Federal Motor Carrier Safety Administration is at identifying and taking action against reincarnated carriers and any challenges the agency has in that regard, Haller said.

Researchers want to learn what FMCSA has done or plans to do to address the challenges it has in finding and taking action against reincarnated carriers. Murray and Olver also asked GAO to offer suggestions for how FMCSA could solve the problem of reincarnated carriers.

“Sen. Murray is trying to gain a better understanding of how the new standards for new entrants are functioning and what steps the agency is taking to improve tracking,” Murray’s spokesman Eli Zupnick said.

GAO is in the “design phase” of the study, which it started in February, Haller said. He was not certain when the agency would release its findings.

The report would not be GAO’s first study of reincarnated carriers. In July 2009, the government watchdog found that more than 1,000 truck and bus companies had successfully reincarnated with different names after FMCSA had shut them down for safety violations ranging from suspended licenses to possible drug use.

Such companies are often difficult to identify, the report found. GAO cited an example in which the owner of a company re-registered under his daughter’s name. One carrier in Texas re-registered the company as the Spanish translation of its former name.

The “new” and “old” carriers frequently share an address, phone number, officers or other key details, the report found.

GAO did not make any recommendations in its 2009 report. But Reps. James Oberstar (D-Minn.) and Peter DeFazio (D-Ore.), then the chairmen of the House Transportation and Infrastructure Committee and its highways and transit subcommittee, respectively, said they wanted tougher penalties for reincarnated carriers, including civil action.

That would have been a part of the surface transportation reauthorization bill, which has not been enacted.

The U.S. Department of Transportation, meanwhile, said in May it had put forth a “policy proposal” that would allow it to better find whether a new carrier is a reincarnation of an old one by establishing a federal standard to define a reincarnated carrier.

The department is providing “technical assistance” to Congress to establish the standard, FMCSA spokeswoman Candice Tolliver said. DOT is advising Congress on the matter, but Tolliver did not elaborate further on the department’s actions.

“It’s a problem,” FMCSA Administrator Anne Ferro said, adding, “We need to tighten up the application process.”

Ferro confirmed that the agency and DOT are not taking action themselves on the issue of reincarnated fleets.

FMCSA will, however, seek ad-vice from potential contractors for creating a monitoring system to better track out-of-service trucking companies, she told Transport Topics in a May 24 interview at the National Tank Truck Carriers meeting in Baltimore. She did not give a date for the request. FMCSA does have such a system for monitoring bus companies that have been put out of service.

“It has been far too easy to get a DOT number,” Ferro said. “We are making sure we have the tools to identify the bad actors and get these bad actors off the road.”

“We respect the concern, though we question how prevalent the problem is and how much of a priority we should make it,” said Rob Abbott, vice president of safety policy for American Trucking Associations.

“We really should be focusing on those things that are really a known risk to highway safety,” Abbott said.

Senior Reporter Rip Watson contributed to this story.