If you’re looking for some clear insight into the new Highway Bill that was signed into law this July, you’ve come to the right place. Since the law brings with it some important new changes that will affect freight shipping in Los Angeles and beyond, we knew we would have to get down to the facts.
One of the most important changes of the new Highway Bill is that it will end the common practice of motor carriers subcontracting shipments to other motor carriers. Companies should be aware of these new changes to assure that their LTL freight services and other activities comply with the new requirements.
Section 32916 of S. 1813 (the Highway Bill – adopted as 112 Public Law 141) changes the current law and states that motor carriers “may only provide transportation of property with self-propelled motor vehicles owned or leased by the motor carrier…” Because of this new requirement, motor carriers will need to obtain freight forwarder or broker authority to subcontract loads or arrange for transportation of shipments by others.
Section 32917 of the Highway Bill also puts into place tougher restrictions on the criteria to be registered as a motor carrier, broker or freight forwarder authority. Section 32919 also requires brokers and freight forwarders be registered and satisfy various financial requirements. It also imposes civil penalties for any violation of the requirements, which can also be thought of as penalties for unauthorized brokering.
The new Highway Bill will also significantly raise the surety bond requirement for brokers. Prior to this bill, the surety bond requirement remained at $10,000 for over 30 years. However, Section 32919 of the bill raises the surety bond requirement to $75,000. Such a large increase has the potential to eliminate smaller brokers.
While it is still possible that an amendment will be passed to the Highway Bill that will change one or more of the requirements discussed above, we recommend becoming familiar with the law now since it could go into effect as early as July 2013!