TIA Comments on Highway Bill

The Board of Directors of the Transportation Intermediaries Association met recently to discuss unexpected language appearing in the final version of the highway bill signed by President Bush on August 10, 2005. Particular language has the potential to eliminate the need for non-household goods brokers and freight forwarders to register with the Federal Motor Carrier Safety Administration (FMCSA). Elimination of broker and forwarder registration could also lead to the eradication of bonding and insurance requirements for the property broker and freight forwarder industry. The legislation gives the Secretary of Transportation discretion over whether or not to continue those requirements, hinging upon him finding “that such registration is needed for the protection of shippers.”

The Department of Transportation (DOT) has yet to issue a public statement regarding plans to carry out this new legislation. Some industry commentators have expressed the opinion that the law automatically eliminates the regulation of brokers and freight forwarders. TIA clearly understands the potential impact of this legislation and its impact on the transportation industry; the more accurate view is that current regulations will remain on the books and will remain enforceable until DOT decides whether or not the rules should be changed.

Daniel T. Yoest, Chairman of the Board of TIA, remarks, “Typically, in this type of legislation, language is provided that dissolves present regulatory requirements, if that were the true intent of Congress. Since this bill does not have any language removing the present regulations, our industry should remain business as usual until DOT has a chance to clarify its direction and intent.” Yoest goes on to comment that “it is the position of TIA that the current regulations for licensing and bonding are adequate and TIA believes that the present regulations should be applied and enforced across all parties, including motor carriers that are presently brokering freight. Any ills in the industry can be and are cured by implementing good and sound business practices by shippers, 3PLs, and carriers.”

In the meantime, to assist carriers and shippers in making sure that they are choosing responsible and reliable brokers and forwarders, TIA has posted a checklist on its website at www.tianet.org on how to qualify a transportation broker and freight forwarder. Also available on the site is the model shipper-broker contract recommended by TIA. By spring of next year, TIA anticipates the completion of a model broker-carrier contract. Both contracts contain criteria which should be followed when doing business with property brokers and freight forwarders. Additionally, in September TIA will launch its TIA Watch Dog website that is designed for TIA members to report and monitor the most serious problem brokers and carriers.