How would new legislation affect Freight Brokers and Forwarders?
The idea for creating a national carrier hiring standard has been in the air for some time. Now it's back on the table after the H.R. 1120 was introduced in the House of Representatives last February. In its entirety, the bill repeats the legislative language of a similar proposal, presented to the 113th Congress last year.
This bill aims at bypassing the Compliance Safety Accountability (CSA) program used by the Federal Motor Carrier Safety Administration (FMCSA) since 2010 for rating each motor carrier through the behaviour, analysis, and safety improvement categories known as CSA BASICs.
The CSA scores are deemed inadequate and confusing by the trucking industry when it comes to hiring a motor carrier. Also, experts say that creating a national hiring standard will bring the “negligent selection lawsuits” based on CSA data to a minimum.
The FMCSA system requires a freight broker, freight forwarder, shipper, or receiver to use the CSA BASICs to see how safe and reliable a motor carrier is. The rating is done according to the following categories:
- Unsafe Driving;
- Hours-of-Service Compliance;
- Driver Fitness;
- Controlled Substance/Alcohol Regulation Compliance;
- Vehicle Maintenance;
- Hazardous Materials Compliance;
- Crash Indicator.
The obvious problem: freight brokers and shippers find themselves in a position to make a trustworthy decision based on those CSA scores, which change monthly. Besides, the FMCSA is still trying to come up with a rule that would one day link the carrier's safety ratings with those scores, and give a bigger and better picture of the overall standing of the motor carrier.
Furthermore, industry professionals say that because of the CSA data, carrier customers and partners sometimes get involved in lawsuits, charged with negligent hiring practices. Many question the validity and accuracy of the CSA scores, and whether they are enough to hold accountable all hiring entities.
What Is H.R. 1120 Going to Change?
Here comes the long-brewing idea of creating national hiring standards for motor carriers. The language of the bill suggests that freight brokers, freight forwarders, shippers, and receivers would have to go through the following steps before hiring a carrier:
- Check if the motor carrier has current registration with the FMCSA, and whether it is accurate;
- Check if the motor carrier has minimum insurance required;
- Check if the motor carrier has ever been given an “unsatisfactory” rating for safety.
According to the supporters of the bill, those three steps would be sufficient to judge whether a carrier is reliable. Many in the industry believe that a national hiring standard would unite and regulate the best practices. That way, H.R. 1120 would put an end to the unclear and often confusing data of the CSA BASICs, especially when it pertains to the negligent selection of a carrier.
What Does it All Mean for Freight Brokers?
- If the bill passes, it would help create a unified U.S. standard imposed by Congress while eliminating the existing state-by-state “standards.” The latter often becomes a norm backed up by local court decisions on what freight brokers, shippers and other parties must do in order to pick a safe trucking company.
- According to the Transportation Intermediaries Association (TIA), if the bill provides more clarity, it will diminish the ever-growing danger of questionable negligent selection lawsuits rooted in the BASICs data. “Every time a shipper, broker, forwarder, or receiver hires a carrier, they are essentially playing Russian roulette for their business’ livelihood,” said Robert Voltmann, president of TIA, in a statement.
- None of the provisions of the bill means change of the requirements for becoming a freight broker or forwarder, among which is the mandatory freight broker bond, meant to ensure fair play on all levels. Brokers, forwarders, receivers, and shippers need to be more than reasonable, however, because if H.R. 1120 is implemented, hiring would depend solely on the safe/not safe rating issued by the FMCSA. Would it be sufficient?
Legal professionals see a loophole in the proposed legislation, because the way it is worded, it does not mention how to proceed if a carrier has neither CSA scores nor a safety fitness rating. And according to some industry insiders, including QualifiedCarriers.com, the majority of U.S. trucking companies are in that boat.
This fact could mean two things: those carriers may find it hard to get hired if shippers choose not to risk it with unrated trucking companies; or it could motivate motor carriers to strive for the best possible driving record and share it with the industry professionals for landing steady flow of assignments.
Penny for Your Thoughts
If you are part of the trucking industry, tell us what is your opinion in the comments below. Do you think that H.R. 1120 is a step in the right direction? Would it make a difference in the hiring practices or it wouldn't matter? Let us know.
Todd Bryant is the president and founder of Bryant Surety Bonds. He is a surety bonds expert with years of experience in helping freight brokers get bonded and start their business.
DHL Express Invests in Electric Cargo Plane Fleet
DHL Express has ordered 12 fully electric cargo planes to supercharge efforts in reducing carbon emissions across its US delivery network.
The Alice eCargo planes are manufactured by Seattle startup Eviation, and are designed specifically to be configured for either cargo or passengers. The first planes are expected to be delivered to DHL Express in 2024.
“We have found the perfect partner with Eviation as they share our purpose, and together we will take off into a new era of sustainable aviation,” said John Pearson, CEO of DHL Express.
The purchase forms part of DHL’s €7bn investment in reducing CO2 emissions by 2030, with a zero emissions target set for 2050.
“We firmly believe in a future with zero-emission logistics,” Pearson added. “On our way to clean logistics operations, the electrification of every transport mode plays a crucial role and will significantly contribute to our overall sustainability goal of zero emissions.”
What is Eviation's Alice Aircraft?
- Manufacturer: Eviation
- Capacity: 1,200kg
- Range: 815km
- Charge time: 30 minutes
- Launching: 2024
Eviation’s Alice aircraft enable cargo and passenger airlines to operate zero-emission fleets. The plane can be flown by one pilot and is capable of carrying 1,200kg, with a maximum range of 815km.
The aircraft can be fully charged in 30 minutes, which can take place while the vehicle is loaded and unloaded between flights. Eviation says that, because the aircraft has fewer moving parts - or points of failure - than traditional aircraft, they are more reliable and reduce maintenance overheads and downtime.
“With Alice’s range and capacity, this is a fantastic sustainable solution for our global network,” said Travis Cobb, EVP Global Network Operations and Aviation for DHL Express. “Our aspiration is to make a substantial contribution in reducing our carbon footprint, and these advancements in fleet and technology will go a long way in achieving further carbon reductions.”
How Does Alice Compare with UPS’ eVTOLs?
DHL Express is not alone in electrifying the skies. In April, UPS announced a new fleet of eVTOL (Vertical Takeoff and Landing) aircraft, from Beta Technologies, which will enter service in 2024.
UPS’ vehicles can carry 635kg with a 400km range and cruising speeds of up to 170mph. The eVTOLs can carry cargo to several short-hops or one long route on a single charge, and are aimed at healthcare organisation, SMEs and businesses in small or remote communities.
“These new aircraft will create operational efficiencies in our business, open possibilities for new services, and serve as a foundation for future solutions to reduce the emissions profile of our air and ground operation,” said Juan Perez, UPS Chief Information and Engineering Officer.
The first 10 eVTOLs will be delivered in 2024, with the option for UPS to order up to 150 more.