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Regulatory changes brokers can't ignore
- Oct 16, 2018
- Pat Pitz
In a year where capacity has been historically tight, building out carrier networks has been particularly difficult for freight brokers.
Making sure you have access to the capacity needed to serve your shipper customers also means your brokerage needs to be able to adapt to changing regulatory climates. At this year's DAT User Conference, Chris Burroughs – Senior Director of Government Affairs at the Transportation Intermediaries Association (TIA), a trade association for freight brokers and 3PLs – featured an update on regulations that affect freight brokers.
Here are a few of regulations that Burroughs highlighted:
National Carrier Hiring Standard
The National Carrier Hiring Standard seeks to limit the liability of brokers and shippers when selecting a carrier. It states that before giving a load to a carrier, the broker or shipper must simply confirm that he carrier has operating authority from FMCSA, has the minimum insurance required, and has not been assigned an "unsatisfactory" CSA safety rating.
TIA has been pushing to get the hiring standard included in the Federal Aviation Administration (FAA) Reauthorization funding bill. The standard was included when the House of Representatives approved the bill, but it hit a roadblock in the Senate and never made it into the final bill. Burroughs said TIA will try to get the standard included in an future bill, such as an infrastructure funding package that may come up in the coming year.
Recently, two large asset-based 3PLs outside of California were assessed large financial penalties by the California Air Resources Board (CARB). Burroughs said CARB is now defining a California-based broker as a business that arranges transportation within California no matter where their business is domiciled. In response, TIA has updated its Model Broker-Carrier Contract and added a sample certification addendum to have motor carriers sign when they do not have an official CARB certificate on file.
Sanitary Transportation of Food
This regulation went into effect this past April for small companies (brokerages with less than 500 employees) and a year earlier for large companies. It changed the definition of a "shipper" to include brokers and 3PLs, who ultimately could be held responsible for adulterated food. Burroughs said that shippers may look to the broker to take responsibility for temperature control and sanitary conditions, but that brokers should push back as much as possible and let the carrier handle the transportation operations when transporting food.
One governmental action that freight brokers have benefited from this year is the tax reform package that decreased the corporate tax rate from 35% to 21%. Businesses can take advantage of expense write-offs, including the full cost of new equipment, interest paid on loans, and charitable contributions.
URS to replace MC numbers
The Unified Registration System uses a company's USDOT number as its sole unique identifier for motor carriers, brokers, freight forwarders, etc., and discontinues the use of docket numbers such as MC, MX, and FF Numbers. The URS system is currently being used to register NEW carriers and brokers, but the changeover for EXISTING companies has been delayed indefinitely because of issues with the software program.
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