U.S. Warns Firms That Move Household Goods Against Schemes to Avoid Loading Regulations

This story appears in the April 15 print edition of Transport Topics.

Federal officials are cracking down on moving companies that try to evade regulations for household-goods movers, saying companies that provide moving containers and the laborers to load the containers should be treated as movers under the law.

In an April 1 Federal Register notice, the Federal Motor Carrier Safety Administration said laborers packing for moving companies cannot be employed by the company or an affiliate. If they are, then the company is subject to the rules that govern household-goods movers.

Those companies that only provide and ship containers for consumers can be exempt from rules that apply to moving companies.

The issue stems from the “limited service exclusion,” a provision enacted in a 2005 law. It states that trucking companies that only provide and move containers are not considered household-goods movers, so they are not subject to the consumer protection regulations, higher insurance standards and registration requirements specific to movers.

“FMCSA believes that Congress did not intend the LSE as a mechanism for companies engaged in traditional household-goods moving to evade regulatory oversight,” the agency said.

Some companies had been doing just that, said Paul Oakley, senior vice president of government affairs at the American Moving & Storage Association. “We’ve seen this in the past, where pretty clearly, a company was serving as an agent to a carrier, and the carrier was claiming it fell within the limited service exclusion but it was not complying with relevant household-goods consumer protection requirement,” Oakley told Transport Topics.

The group wrote FMCSA last year to ask for clarity on the provision.

FMCSA’s notice said it would consider the issue on a case-by-case basis, and it outlined eight factors the agency would consider in determining eligibility for the limited service exclusion, including whether the container company advertises itself as a mover, how it handles referrals to companies that pack goods and the corporate or employment relationships between the parties.

“While no single factor is paramount in assessing the business relationships between a container company and loading-packing labor, the extent of a motor carrier’s control over the individual performing the loading-packing service is highly significant,” FMCSA said.

Sen. Mark Pryor (D-Ark.) spoke about the issue in a Senate speech in December. Pryor, who sponsored the limited service exclusion in 2005, urged FMCSA to give companies a great deal of leeway. He warned that full-service moving companies were trying to prevent the container companies from operating.

“These full-service moving companies are aiming to undermine the clear intent of Congress by avoiding the formal rulemaking or legislative process,” he said. “The changes sought would benefit their companies and damage their competitors within the sector.”

Sen. Marco Rubio (R-Fla.) spoke alongside Pryor and in agreement with his argument.

In the same Federal Register notice, FMCSA said it interpreted the limited service exclusion to say that brokers who arrange such container moves, even if they own the containers, are not subject to household-goods regulations.

That differs from other FMCSA policies that require third parties who broker moves to be registered as household-goods brokers and be subject to certain consumer protection regulations.

The American Moving & Storage Association disagreed with FMCSA’s interpretation.

“We think that’s a legal overreach on their part,” Oakley said, adding that “it leaves the consumer completely in the dark about whose rights and responsibilities it is on these moves.”

FMCSA has given the public until May 1 to comment on its guidance. Oakley said the American Moving & Storage Association will file comments to object to the broker decision.