TIA Joins With ATA, OOIDA to Support Broker Surety Bill
This story appears in the April 18 print edition of Transport Topics. Click here to subscribe today.
TIA, along with American Trucking Associations and the Owner Operator Independent Drivers Association, late last month sent a letter and draft copy of a proposed bill to Sens. Olympia Snowe (R-Maine) and Amy Klobuchar (D-Minn.).
The new bill closely tracks unsuccessful legislation the two senators introduced last year known as the Motor Carrier Protection Act of 2010.
Robert Voltmann, president and chief executive officer of TIA, described the joint association support as an “unholy trio” in an April 7 meeting here with TIA’s board of directors.
The letter in support of the draft legislation was signed by Voltmann, ATA President and CEO Bill Graves and OOIDA President Jim Johnston. It noted that the proposed legislation, the Fighting Fraud in Transportation Act, would have a “direct safety impact” and “grant the private sector remedies to enforce the current regulatory framework.”
“ATA has long supported an increase in the broker bond amount as a way to make sure that brokers do have the financial wherewithal to be in the business and to pay carriers for freight that is transported by carriers,” Prasad Sharma, ATA’s deputy chief counsel, told Transport Topics.
“We have always encouraged our members that it’s a good business practice to separate your broker activities from your motor-carrier activities and to obtain separate broker authority if you are not touching the freight,” Sharma added.
Todd Spencer, OOIDA’s executive vice president, said the proposal is a “recognition that the broker community provides a pretty tempting way for unscrupulous characters to victimize truckers.”
“We’d certainly like to see it passed either as a stand-alone or part of a larger transportation bill,” Spencer said.
Discussions between TIA, ATA and OOIDA began in October after TIA put together a draft proposal, Voltmann said.
Voltmann told the TIA board that ATA First Vice Chairman Dan England, president of C.R. England, “moved mountains” to seek an ATA concession that would require motor carriers who broker loads to have separate broker or forwarder authority, post a bond, and be required to specify to a shipper which operating authority they are using in a transaction.
Under the proposal, new brokers would be required to establish a three-year relevant experience or certified training requirement to obtain a license. Current brokers and forwarders would be required to comply with the new regulation no later than four years after it was passed into law.
All freight brokers would be required to renew their licenses every five years.
The bill also would require a motor carrier who does not touch a freight shipment at any point to be considered a broker in the transaction, Sharma said.
In addition, the proposed draft legislation would require the Department of Transportation to establish processes and procedures to annually screen its list of registered motor carriers, brokers and freight forwarders to ensure that the list accurately reflects only those entities with current active operating authority.
The proposal also would impose civil penalties of up to $10,000 per violation for brokering without a license and establish unlimited liability for payments to carriers and brokers who were victims of fraud.
At their April 7 meeting, several board members suggested the new proposed fraud bill could also include a provision that would reinstate a requirement that motor carriers provide a minimum of $5,000 cargo-liability insurance on freight shipments. FMCSA dropped that requirement in rulemaking that became effective last month.
Reinstating the cargo-liability requirement, known as BMC-32, would be “a heavy lift,” Voltmann told board members.
“We were not going to get ATA or OOIDA to agree to reimpose that requirement in this legislation,” Voltmann said.
