MAP-21's new requirements for freight forwarders and brokers

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On July 6, 2012, the President signed the Moving Ahead for Progress in the 21st Century Act (MAP-21). This was the first multi-year transportation authorization since 2005 and funds surface transportation programs at over $105 billion for fiscal years 2013 and 2014. According to the Department of Transportation, it transforms the framework for investments to guide the growth and development of the country’s vital transportation infrastructure.

MAP-21 was enacted on October 1, 2012 and its requirements will go into effect on October 1, 2013. MAP-21 directs the Federal Motor Carrier Safety Administration (FMCSA) to begin 29 new rule-makings within a 27-month period, which does not include current rule-makings underway. In addition, it requires FMCSA to implement 34 programmatic changes and produce 15 reports.

In a nutshell, MAP-21 does the following:

  1. Requires disclosure of family ownership of multiple transportation companies: Carriers, brokers and freight forwarders must disclose any familial relationships with owners of other transportation companies.
  2. Includes a ban on “reincarnated” carriers. DOT can revoke registration or authority of a “reincarnated” carrier or levy a fine. This also applies to failure to disclose important facts.
  3. Requires event on board recorders (EOBRs) on all interstate commercial motor vehicles (CMVs) within two years: The Department of Transportation (DOT) will issue rules within a year, so that by 2014, CMVs will install an “electronic logging device” to “improve compliance” with hours of service (HOS).
  4. Establishes a national driver registry: There will be a national registry of drivers with CDLs, including driving history and drug and alcohol test results.
  5. Imposes minimum driver training standards: Within one year, the DOT will establish national driver training standards for a commercial driver’s license.
  6. Creates a Unified Registration System (URS): All motor carriers, brokers and freight forwarders must register, and carriers and brokers must register with separate authority for each function.
  7. Increases the broker bond to $75,000: Brokers are required to post a bond or other financial security of at least $75,000, starting October 1, 2013. The original version had a $100,000 minimum. That got horribly panned by several industry associations.
  8. Imposes stricter regulation of bond and trust companies: More transparency and fairness are required in the payment of claims by bond and trust companies.

The bonding requirement mentioned above will be included in the upcoming URS 2 rule to be issued by FMCSA that will incorporate and implement all the new registration requirements, including new registration fee and registration requirements for brokers and freight forwarders.