Issue link: https://read.dmtmag.com/i/183648
Feature Broker Story Basics By Robert Mucci How Does the Commercial Motor Vehicle Safety Enforcement Act of 2012 Affect the Way You Do Business? T o state that this law is confusing and self-contradictory is a vast and risky understatement. And that unto itself is a bad combination when you are trying to run a business. However, it is the law and motor carriers, freight forwarders and brokers need to be aware that MAP-21 contains insurance traps for unwary transportation entities. The law requires transportation entities to be classified as either a motor carrier; freight forwarder; or a broker. There's no grey area here. From there, the Department of Transportation/FMCSA must issue a distinctive registration number to the person for each such authority to provide transportation or service for which the person is registered. Let's take a look at how MAP-21 applies to each entity; Motor Carriers, Freight Forwarders; and Brokers For Motor Carriers… The new law prohibits subcontracting shipments to another carrier (commonly known as sub haulers) which the origin carrier has contracted to transport unless the origin carrier. According to the new law, physically transports the cargo at some point or the original motor carrier has obtained a separate registration as a freight forwarder or broker for transportation. Just to clarify, a Broker means a person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier. It's important to remember that motor carriers are not brokers as it pertains to this section, when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport. In the past, numerous conflicts between shippers and motor carriers have arisen over whether the motor carrier which agreed to transport the cargo had legally bound themselves to transport or had made arrangements for the broker of the shipment on behalf of the shipper. Basically, the law eliminates the carrier from representing themselves as the transportation carrier then switching roles, without the shipper's knowledge, into that of a broker. If a carrier does not move the freight, then they will need to disclose to the shipper that they are acting in another capacity; either as a freight forwarder or broker assuming they have registered as one or the other or both. No secrets can be kept. For Freight Forwarders… Here's where Congress, masters of their craft, have muddied the already murky waters. The Interstate Commerce Act defines a freight forwarder as a person holding itself / Owner operator/ october 2013 / / 50 OO 1013 broker basics.indd 1 9/6/13 2:10 PM