FMCSA Gives Guidance on MAP-21 Implementation, Will Allow for Phased-In Enforcement
The Federal Motor Carrier Safety Administration (FMCSA) provided some questions and answers outlining new financial and licensing requirements to be implemented under the Moving Ahead for Progress in the 21st Century Act (MAP-21). The Q-and-A, a response to many requests from motor carriers and transportation companies, does not mention customs brokers specifically, but does discuss the responsibilities of freight forwarders under the regulations. There's been ongoing concerns as to how the legislation would apply to customs brokers (see 13041101), despite assurance from the National Customs Brokers and Forwarders Association of America that the bill's language exempts most work done by customs brokers (see 12070325).
A freight forwarder is defined by the FMCSA as a person or company that provides for property transportation and:
- Assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;
- Assumes responsibility for the transportation from the place of receipt to the place of destination; and
- Uses for any part of the transportation a rail, motor or water carrier subject to the jurisdiction of either FMCSA or the Surface Transportation Board.
Freight forwarders and property brokers that are involved in interstate commerce and subject to FMCSA jurisdiction are required to register with FMCSA, the notice said. "Freight forwarders that perform both freight forwarder services and motor carrier services (beyond the scope of their freight forwarding operations) must register both as freight forwarders and as motor carriers." Any property broker or freight forwarder who knowingly "engages in interstate brokerage or freight forwarding operations without the required operating authority" is liable for a "civil penalty not to exceed $10,000 and can be liable to any injured third party for all valid claims regardless of the amount," said the FMCSA.
Bond Requirements and Phased-In Enforcement
As of Oct. 1, 2013, all FMCSA regulated property brokers and freight forwarders must obtain and file with FMCSA a surety bond or trust fund agreement in the amount of $75,000. For now, filers cannot use group surety bonds or trust funds to satisfy FMCSA’s financial responsibility requirement, though it "is considering the enforcement implications of group sureties as well as the effect on small entities and new entrants," the agency said.
FMCSA will be providing a 60-day phase-in period beginning Oct. 1, to allow the industry to complete all necessary filings, it said. Beginning Nov. 1,, "FMCSA will mail notifications to all [property] brokers and freight forwarders that have not met the $75,000 minimum financial security requirement. FMCSA will provide 30 days advance notice before revoking the freight forwarder and [property] broker operating authority registrations."
The concern for customs brokers revolves around where the exemptions to the law begin and end. MAP-21 (here) includes several exemptions from the registration and bond requirements. Exempted are:
- a customs broker licensed in accordance with section CFR 19 Part 111.2 of title 19, only to the extent that the customs broker is engaging in a movement under a customs bond or in a transaction involving customs business, as defined by CFR 19 Part 111.1
- non-vessel-operating common carrier or an ocean freight forwarder when arranging for inland transportation as part of an international through movement involving ocean transportation between the United States and a foreign port;
- an indirect air carrier holding a Standard Security Program approved by the Transportation Security Administration, only to the extent that the indirect air carrier is engaging in the activities as an air carrier
(Federal Register 09/05/13