Broker and Freight Forwarder Financial Responsibility Roundtable |
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Larry W. Minor
Federal Motor Carrier Safety Administration
27 April 2016
[Federal Register Volume 81, Number 81 (Wednesday, April 27, 2016)]
[Notices]
[Pages 24935-24937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09849]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2016-0102]
Broker and Freight Forwarder Financial Responsibility Roundtable
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of meeting, request for public comment.
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SUMMARY: FMCSA announces that it will host an informal roundtable
discussion pertaining to property broker and freight forwarder
financial responsibility. The meeting will focus on the adequacy of
existing trust fund industry practices, Federal requirements for such
institutions, and the underlying instruments they issue for use by
brokers and freight forwarders submitting the Broker's or Freight
Forwarder's Trust Fund Agreement (FMCSA Form BMC-85) to satisfy the
[[Page 24936]]
Agency's financial responsibility rules. The Agency seeks information
from motor carriers and shippers that have experienced challenges
receiving compensation for claims against freight forwarders and
brokers due to insufficient funds. The meeting will be public.
Individuals with diverse experience, expertise, and perspectives are
encouraged to attend. This meeting does not pertain to increasing motor
carrier, broker, or freight forwarder minimum financial responsibility
limits. If all comments have been exhausted prior to the end of the
session, the session may conclude early.
DATES: The roundtable discussion will be held on Friday, May 20, 2016,
from 9:30 a.m. to 4:30 p.m., Eastern Time (ET) at the U. S. Department
of Transportation, Media Center, 1200 New Jersey Avenue SE., Ground
Floor, Washington, DC 20590. The entire proceedings will be public.
ADDRESSES: You may submit comments bearing the Federal Docket
Management System Docket ID (FMCSA-2016-0102) using any of the
following methods:
Federal eRulemaking Portal: Go to http://www.regulations.gov.
Follow the online instructions for submitting comments.
Mail: Docket Management Facility: U.S. Department of
Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor,
Room W12-140, Washington, DC 20590.
Hand Delivery or Courier: West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5
p.m., ET, Monday through Friday, except Federal holidays.
Fax: 1-202-493-2251.
Each submission must include the Agency name and the docket number
for this notice. Note that DOT posts all comments received without
change to www.regulations.gov, including any personal information
included in a comment. Please see the Privacy Act heading below.
Docket: For access to the docket to read background documents or
comments, go to www.regulations.gov at any time or visit Room W12-140
on the ground level of the West Building, 1200 New Jersey Avenue SE.,
Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The online Federal document management system
is available 24 hours each day, 365 days each year. If you would like
acknowledgment that the Agency received your comments, please include a
self-addressed, stamped envelope or postcard or print the
acknowledgement page that appears after submitting comments online. The
docket FMCSA-2016-0102 will remain open indefinitely.
Privacy Act: In accordance with 5 U.S.C. 553(c), DOT solicits
comments from the public to better inform its rulemaking process. DOT
posts these comments, without edit, including any personal information
the commenter provides, to www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.
FOR FURTHER INFORMATION CONTACT: For information concerning this
notice, contact Dr. Gerald Folsom, Office of Registration and Safety
Information, (202) 385-2405, or by email at Gerald.folsom@dot.gov.
For information about the public meeting: Ms. Shannon L. Watson,
Senior Policy Advisor, Federal Motor Carrier Safety Administration,
1200 New Jersey Avenue SE., Washington, DC 20590, by telephone at 202-
366-2551, or by email at Shannon.Watson@dot.gov. If you have questions
on viewing or submitting material to the docket, contact Docket
Services at 202-366-9826. Business hours are from 8:00 a.m. to 4:30
p.m. ET, Monday through Friday, except Federal holidays.
SUPPLEMENTARY INFORMATION:
I. Public Participation and Request for Comments
FMCSA encourages participation in the roundtable discussion and the
submission of comments and related materials. Documents for discussion
at the meeting should be submitted to the docket at least 7 business
days in advance of the meeting.
A. Submitting Comments
If you submit a comment, please include the docket number for this
notice (FMCSA-2016-0102), indicate the specific section of this
document to which each comment applies, and provide a reason for each
suggestion or recommendation. You may submit your comments and material
online or by fax, mail, or hand delivery, but please use only one of
these methods. FMCSA recommends that you include your name and a
mailing address, an email address, or a phone number in the body of
your document so that the Agency can contact you if it has questions
regarding your submission.
To submit your comment online, go to http://www.regulations.gov and
put the docket number, ``FMCSA-2016-0102'' in the ``Keyword'' box and
click ``Search.'' When the new screen appears, click on the ``Comment
Now!''' button and type your comment into the text box in the following
screen. Choose whether you are submitting your comment as an individual
or on behalf of a third party and then submit. If you submit your
comments by mail or hand delivery, submit them in an unbound format, no
larger than 8\1/2\ by 11 inches, suitable for copying and electronic
filing. If you submit comments by mail and would like to know that they
reached the facility, please enclose a stamped, self-addressed postcard
or envelope.
Confidential Business Information
Confidential Business Information (CBI) is commercial or financial
information that is customarily not made available to the general
public by the submitter. Under the Freedom of Information Act, CBI is
eligible for protection from public disclosure. If you have CBI that is
relevant or responsive to this Notice, it is important that you clearly
designate the submitted comments as CBI. Accordingly, please mark each
page of your submission as ``confidential'' or ``CBI.'' Submissions
designated as CBI and meeting the definition noted above will not be
placed in the public docket of this Notice. Submissions containing CBI
should be sent to Mr. Brian Dahlin, Chief, Regulatory Analysis
Division, 1200 New Jersey Avenue SE., Washington, DC 20590. Any
commentary that FMCSA receives which is not specifically designated as
CBI will be placed in the public docket for this rulemaking.
FMCSA will consider all comments and materials received during the
comment period.
B. Viewing Comments and Documents
To view comments, go to http://www.regulations.gov and insert the
docket number, ``FMCSA-2016-0102'' in the ``Keyword'' box and click
``Search.'' Next, click the ``Open Docket Folder'' button and choose
the document listed to review. If you do not have access to the
internet, you may view the docket by visiting the Docket Management
Facility in Room W12-140 on the ground floor of the DOT West Building,
1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays.
II. Background
MAP-21 Section 32918
In the Moving Ahead for Progress in the 21st Century Act (MAP-21)
(Pub. L. 112-141), Congress enacted Section 32918, Financial Security
of Brokers and Freight Forwarders. Section 32918
[[Page 24937]]
raised the financial security amount for brokers to $75,000 and
extended the financial security requirement to freight forwarders for
the first time. FMCSA implemented those requirements in a 2013 Omnibus
rulemaking (78 FR 60226) (Oct. 1, 2013), codified at 49 CFR 387.307(a)
(brokers) and 49 CFR 387.403(c) and 387.405 (freight forwarders).
Brokers or Freight Forwarders are required to have either a BMC-84
Surety Bond or BMC-85 trust fund on file with the Agency as a condition
of obtaining FMCSA operating authority.
MAP-21 added requirements pertaining to the composition of trust
fund assets (49 U.S.C. 13906(b)(1)(C),(c)(1)(D)), the immediate
suspension of broker or freight forwarder operating authority if their
financial security falls below $75,000 (49 U.S.C. 13906(b)(5),(c)(6)),
and the payment of claims in the event of financial failure or
insolvency (49 U.S.C. 13906(b)(6),(c)(7)). Additionally, it gave FMCSA
the authority to take direct enforcement action against surety
providers, either through administrative proceedings, court action or
suspending their ability to make financial security filings with the
agency. (49 U.S.C. 13906(b)(7),(c)(8)).
Since MAP-21's enactment, various parties have filed numerous
complaints with the agency pertaining to BMC-85 trust fund providers.
Multiple entities have sought guidance from the Agency, pertaining to
the portions of section 32918 not covered in the omnibus rule,
particularly regarding procedures to be followed in connection with the
insolvency or financial failure of a broker.
As an agency whose primary mission is to promote motor carrier
safety, 49 U.S.C. 113(c), FMCSA requests additional input from
stakeholders in connection with broker/freight forwarder financial
security. The Agency seeks to ensure that shippers and motor carriers
can collect on the required broker/freight forwarder financial
instruments and that appropriate guidance on section 32918 is available
to interested parties while avoiding the diversion of Agency resources
from critical safety functions. The Agency believes that this
roundtable discussion will help gather critical information on how to
best meet its responsibilities pursuant to section 32918.
FMCSA seeks attendance or participation by all interested parties
at the roundtable discussion, including but not limited to, various
aspects of the brokerage and freight forwarding industries (including
small business segments of the industry and their representatives),
motor carriers (including the household goods industry), shippers,
owner-operators, the surety bond industry, BMC-85 trust fund filers,
groups representing small businesses, state regulators of loan and
finance companies and insurance companies, Federal surety bond
regulators and all other interested parties.
As a result of this roundtable discussion, FMCSA hopes to develop a
clear path toward implementing fully section 32918 of MAP-21.
Topics for Roundtable Discussion
FMCSA welcomes comments or questions before and during the
roundtable discussion. The roundtable will center on the following
questions but may be expanded as necessary for a full discussion of the
relevant issues:
(1) Which, if any, BMC-85 Trust Fund holders routinely deny claims
made by shippers and motor carriers against those trust funds?
(2) What is the nature of the assets that are being held in BMC-85
trust funds and what is the most desirable composition of the assets?
For example, should trust funds consist solely of cash or other highly
liquid financial instruments? What types of instruments constitute
``highly liquid?'' Aside from cash, what else can satisfy MAP-21's
mandate that trust funds consist of ``readily available assets . . .
?'' Should the Agency define the classes of investments held in trust
relative to risk profile of the issuer and identify the relative
liquidity of such assets or should it rely on other sources for such
information?
(3) Aside from FMCSA, are BMC-85 trust fund filers being regulated
by any other governmental entity? If so, what is the nature of their
regulation by state or other authorities?
(4) What actions can FMCSA take to ensure that motor carriers and
shippers are able to collect on BMC-85 trust funds where legitimate
claims are filed with the financial institution?
(5) Should the Agency act to address potential issues associated
with the solvency of BMC-85 trust funds? If so, what type of action
would be most appropriate? What type of FMCSA action pertaining to 49
U.S.C. 13906(b)(6) and (c)(7)(payment in cases of financial failure or
insolvency) is necessary? Would agency guidance, as opposed to
rulemaking, be sufficient?
(6) Should FMCSA require brokers and freight forwarders to
demonstrate the creditworthiness of the entity with whom brokers or
freight forwarders intend to execute a trust fund, based on a
determination of creditworthiness by the applicable state regulatory
authority or the Department of Treasury Financial Management Service?
FMCSA will utilize the comments received in advance of the
roundtable discussion to further frame the issues.
Accessibility Needs
The U.S. Department of Transportation is committed to providing
equal access to the roundtable discussion. If you need special
accommodations for the roundtable, such as sign language
interpretation, please contact Ms. Shannon L. Watson, Senior Policy
Advisor, FMCSA, by telephone at 202-366-2551, at least one week prior
to the event to allow us sufficient time to arrange for such services.
We will make every attempt to fulfill requested accommodations.
Issued on: April 21, 2016.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2016-09849 Filed 4-26-16; 8:45 am]
BILLING CODE 4910-EX-P