Issue link: https://read.dmtmag.com/i/183648
broker basics out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments;, the transportation from the place of receipt to the place of destination. He then uses for any part of the transportation a carrier subject to jurisdiction under this subtitle. The term does not include a person using transportation of an air carrier. So what authority does a truckload motor carrier need in order to legally subcontract a truckload shipment to another motor carrier? The first question to be answered is what is a truckload shipment? There appears to be consensus that a 10,000 pound shipment is considered a "truckload" shipment. This could be legally important as MAP-21 requires all motor carriers to hold freight forwarder authority if they wish to subcontract loads to other motor carriers when the origin carrier will not transport the shipment for any part of the trip. In order to understand why this requirement makes no sense, we need to briefly review the regulatory history of freight forwarding. In 1932 Congress brought the motor carrier industry under the regulation of the Interstate Commerce Commission (ICC) - Motor Carrier Act of 1932. Freight forwarders sought operating authority from the ICC. The ICC held that the applicants did not qualify to be either common carrier by motor vehicle or contract carriers by motor vehicle. Congress brought freight forwarders under regulation by the ICC by enacting the Freight Forwarder Act (FFA) of 1942. From 1942 to the mid-1950's there was no requirement for an intermediary for trailer load or carload shipments. By this time the railroads had essentially abandoned the LCL (less-than-carload) business to freight forwarders, pool car consolidators and the few remaining inter-urban trolley lines. Thus, when Congress was marking-up the FFA of 1942, Congressional debate centered around exempting brokers, nonprofit associations of shippers, warehousemen and pool-car operators from regulation as these entities, it was argued, do not do all of the things required under the definition to constitute a freight forwarder. The rapid growth of rail piggyback service in the late 1950's created significant regulatory headaches for the ICC. Originally, the service was offered to freight forwarders as they were the only players capable of generating the volumes of business the railroads were seeking. As originally structured, shippers were required to tender two loaded semitrailers for rail carriage at one time. An enterprising former railroad sales agent got the idea of "marrying two pigs" from two separate shippers for one move, thus meeting the rail carrier's minimum volume commitments. The ICC, charged with "protecting" freight forwarders from unlicensed competitors, tried to stop this practice first by rule making procedure, then in court. The ICC argued that these unlicensed "Shippers' Agents" and other entities such as ocean carriers were in fact, operating as unlicensed freight forwarders in violation of the ICA. The ICC lost the case as the court ruled that in order to be found to be a / Owner operator/ october 2013 / / 52 OO 1013 broker basics.indd 2 9/6/13 2:11 PM