Bill Would Set Carrier Selection Standards for Brokers

Once again, a bill in Congress proposes to give brokers and third-party logistics providers a “national standard” for due diligence in selecting motor carriers and help shield them from negligent-hiring claims.

Sen. Deb Fischer (R-Neb.), a member of the Senate Commerce Committee, and Sen. Mike Crapo (R-Idaho) introduced the Motor Carrier Safety Selection Standard Act.

The bill would require the U.S. Department of Transportation to establish a national “safety fitness determination” standard for shippers and brokers to use to ensure trucking companies are licensed, registered, and insured.

The proposed standard would require that motor carriers:

• Be registered with the Federal Motor Carrier Safety Administration.
• Meet at least the minimum insurance requirement.
• Not have an unsatisfactory safety rating.

If this standard is followed, a 3PL would be considered to have selected a carrier in “a reasonable and prudent manner.”

The bill also sets interim requirements to help ensure shippers and manufacturers hire safe, reliable drivers that are properly licensed, registered and insured, according to Crapo.

Similar legislation was introduced in February in the House of Representatives by Rep. Mike Gallagher (R-Wisconsin).

Why do Brokers Want a National Standard?

The Transportation Intermediaries Association, which represents brokers and other third-party logistics providers, praised the bill, as did megabroker C.H. Robinson.

“Without a clear federal standard, the result is a confusing patchwork of standards that threaten the nation’s economy and public safety,” said Ben Campbell, chief legal officer of C.H. Robinson.

“Some companies have already begun excluding motor carriers from their logistics networks based on their own assessment of who is ‘safe’ and who is not,” he explained in a news release. “This harms small carriers with five trucks or fewer who make up 90% of the market.

“Congress established the Federal Motor Carrier Safety Administration and their trained safety experts to keep the motoring public safe. With this bill, Senator Fischer will improve safety and increase access to freight for small motor carriers, which will improve the nation’s supply chains.”

It’s not the first time bills to set such a standard have been introduced since a 2012 $5 million jury verdict that may have been the first punitive damages verdict against a transportation broker in a case involving a negligent hiring claim.

It that case, it was shown in court that the motor carrier did not have insurance or operating authority when the broker tendered the load.

The Truck Safety Coalition has opposed previous efforts, saying such a law is designed to shield third-party logistics providers and brokers from liability and that it would “dramatically reduce and redefine the standard of reasonable care 3PLs must exercise in their selection of motor carriers.”

Motor Carrier Safety Selection Standard Act of 2023

The Senate bill calls for the DOT to promulgate regulations to revise the methodology for issuance of motor carrier safety fitness determinations. In promulgating the regulations, the bill says, the transportation secretary “shall consider the use of all available data to determine the fitness of a motor carrier.”

The new regulation, the bill says, must provide a procedure to determine whether a motor carrier is not fit to operate a commercial motor vehicle in or affecting interstate commerce.

The bill wants the rule to provide protection for shippers from negligence claims, providing a procedure where a shipper (or broker) would be considered “reasonable and prudent” in the selection of the motor carrier.

House Version

The House version, H.R. 915, also called the Motor Carrier Safety Selection Standard Act, establishes a standard of care for the selection of brokers and other entities that contract with motor carriers.

Like the Senate bill, the House bill would require brokers to verify that a motor carrier is properly registered with the FMCSA, has obtained the minimum required insurance coverage; and is not determined unfit to safely operate commercial motor vehicles, or otherwise ordered to discontinue operations by the Federal Motor Carrier Safety Administration or a state.

It also calls for the DOT to prescribe a process for revoking the registration of an owner or operator determined unfit to safely operate a commercial motor vehicle.

“When manufacturers select trucking companies to ship their products, they are left without any standard to ensure those trucks are safe or fit to be on the road,” said sponsor said Rep. Mike Gallagher in introducing the House bill. “The lack of a data-driven method to help manufacturers pick the best carriers has led to hundreds of thousands of accidents on roads and highways.

“This bill directs the Department of Transportation to establish a safety rating process for trucking companies and sets an interim standard to ensure manufacturers work with reliable trucking companies that are fully authorized, licensed, and insured."

In May, it was ordered to be reported out of committee by the Committee on Transportation and Infrastructure but has not moved since.

Safety Fitness Determination

Potentially complicating matters is that FMCSA has been working on developing new safety fitness procedures for some time that would be more data-driven.

Ever since CSA was implemented, the goal was to tie that data into how FMCSA determines a motor carrier’s safety fitness rating, but the agency is still only using it to identify carriers for audits.

The agency is currently in the “pre-rule” stage of the federal rulemaking process, “seeking information on how the agency might use data and resources more effectively to identify unfit motor carriers and to remove them from the nation's roadways.”

FMCSA would seek public comment about the use of available safety data, including inspection data, in determining carrier fitness to operate. The agency would also seek public input on possible changes to the current three-tier safety fitness rating structure. The action would also include a review of the list of Federal Motor Carrier Safety Regulations (FMCSRs) that the FMCSA uses in its current safety fitness rating methodology. 

Last fall, officials expected an advance notice of proposed rulemaking to be issued early in 2023.

A previous attempt was abandoned in 2017. At that time the agency was looking to use data from its CSA program in determining safety fitness, but many in the trucking industry said the government needed to fix problems with CSA first.