Wednesday, April 09, 2008

New HHG Carrier Regulations

The Federal Motor Carrier Safety Administration has proposed a new rule requiring interstate household goods carriers to submit reports on a quarterly basis summarizing a list of information concerning claims and claim inquiries filed with the carrier. The general public, including yourself, has until April 21, 2008 to file comments or objections to the proposed rule. For the reasons stated in this post, you may wish to file comments or objections.

Under the proposal, any carrier holding interstate authority to transport household goods will be required to file a report on a quarterly basis. The report may be filed in paper or on the web. That part is fine.

The report will require each carrier to provide a list of information about the company itself and then a summary of complaint information for the quarter, such as number of shipments handled, number of oral complaints, number of written complaints, rates or charges, a description of the services, how claims are handled, number of claims for loss or damage in excess of $500, number of claims for loss or damage in excess of $500 settled during the reporting period, number of claims in excess of $500 declined and the number of claims in excess of $500 still pending.

Under this rule, carriers are subject to a minimum penalty of $650 for each violation and for each day the violation continues. There is also a maximum penalty of $6,500 for failing to file a report or failing to file a report within thirty days from the due date, failing to make the report in the manner required, falsifying a report, making a false or incomplete entry, or failing to preserve records as required in the rule.

I have several concerns. I suggest you consider the following:

A. There is no minimum volume of interstate shipments required. Any carrier authorized to transport household goods in interstate commerce will be required to file quarterly. Therefore, if a carrier holds interstate authority but transports no shipments in a quarter, it is still required to file.

B. The rule itself is not clear. I would expect a rule of this nature to read that these claim statistics apply only to interstate shipments. However, under the proposal, the reporting requirements extend to both interstate and intrastate shipments. Therefore a carrier will be required to report each and every shipment and each and every claim, whether interstate or intrastate.

C. The potential fines are significant. The proposed penalties for failing to file start at a minimum of $650 for each violation and go up to a maximum penalty of $6,500. There are so many requirements under the certification a carrier will need to make each quarter, that even minor errors may result in violations and significant penalties.

It appears to me that this rule is ill conceived. It also appears to me that the purpose for enacting the rule is to target carriers who have claims filed. Finally, it appears to me that the true purpose of this rule is to raise revenues for the Federal Motor Carrier Safety Administration. I feel the rule is so poorly written that a carrier trying to comply is going to be subject to jeopardy on a quarterly basis, for any reporting error.

I suggest that anyone involved considers a response or objection. Please keep in mind that the response must be filed so that it is received by April 21, 2008.


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