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Proposed rule would make it easier for FMCSA to shut down reincarnated carriers

On June 29, FMCSA ordered Three Angels Farms, its officers and vehicles out-of-service after safety investigators found multiple safety infractions that substantially increased the likelihood of serious injury to the traveling public. A few weeks later, the agency shut down Terri's Farm when it determined it was a reincarnation of Three Angels Farms. (The Trucker file photo)

The Trucker Staff

11/9/2012

WASHINGTON — The Federal Motor Carrier Safety Administration will on Tuesday publish a Notice of Proposed Rulemaking that gives the agency the ability to more quickly shut down carriers chameleon carriers.

The NPRM says the agency is targeting carriers which have “egregious” disregard for safety compliance, which permit persons who have shown egregious disregard for safety compliance to exercise controlling influence over their operations or which operate multiple entities under common control to conceal noncompliance with safety regulations.

“The proposal would further strengthen the FMCSA’s ability to take unsafe trucks and buses off the road if the agency finds that a carrier purposefully employs officers with a history of blatant disregard for safety,” an FMCSA spokesperson said. “Under the proposal, if FMCSA suspects that an officer of a truck or bus company has demonstrated a pattern of avoiding regulatory compliance or ignoring civil penalties for safety violations the agency would investigate the carrier’s management structure and its operations to determine if it is deliberately concealing safety violations or a negative safety history. If a pattern of unsafe practices is found, FMCSA would suspend or revoke the company’s authority to operate.”

Currently, if the agency suspects that a company has reincarnated itself under a new name, the agency would have to establish a pattern of safety violations within the new company before shutting it down.

The proposed rulemaking would thus allow the FMCSA to link the new company with an existing company with a pattern of serious safety violations and would be able to shut down the new company on that basis even before it carried a single load, sources said.

The FMCSA said in the notice that it has determined that each year a small number of motor carriers have attempted to avoid regulatory compliance or mask or otherwise conceal noncompliance by submitting new applications for registration, often under a different name, to continue operations after being placed out-of-service.

At least twice in 2012, the agency has shut down a reincarnated carrier.

In July, the FMCSA ordered Alabama-based trucking company MTI Transportation LLC to immediately cease all transportation services based on evidence that it was a chameleon operation for two unsafe truck companies previously shut down by the agency, namely BM&L Trucking LLC, and IDM Transportation Inc.

In August, the FMCSA ordered Tennessee-based trucking company Terri’s Farm to immediately cease all interstate transportation services based on evidence that it was a chameleon operation for an unsafe carrier previously shut down by the agency, Three Angels Farms.

In the NPRM, the agency cited an Aug. 8, 2008, fatal bus crash in Sherman, Texas, that the FMCSA said highlighted the danger posed by motor carriers and other persons who avoid regulatory compliance or mask or otherwise conceal noncompliance. Seventeen motor coach passengers died, and the driver and 38 other passengers received minor-to-serious injuries. The investigations conducted by FMCSA and the National Transportation Safety Board revealed that the motor carrier was operating without authority and a reincarnation of another bus company that had been previously placed OOS for safety violations and that both companies were under the control of the same person.

Based on these findings, the FMCSA instituted a vetting process for for-hire passenger and household goods carriers that involves a comprehensive review of registration applications to determine whether the applicants are reincarnations or affiliates of other motor carriers with negative compliance histories or are otherwise not willing and able to comply with the applicable regulations.

“Although the vetting process was a significant improvement to the previous registration review and regulatory compliance process, it is not a complete solution to the problem of regulatory avoidance because it does not impose sanctions, and, therefore, deter, the motor carriers or individuals who engage in or condone egregious disregard for safety compliance,” the NPRM said.

The Trucker staff can be reached to comment on this article at editor@thetrucker.com.

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JB Hunt