Another summer – but this time we get to spend it on the Jersey Shore! No longer stuck in endless traffic we have even more time to create new little secrets to be found in the website. We hope you take some time to enjoy some fun in the sun. I have been remiss in not welcoming the many new subscribers we have to our Premium Subscription. The list has grown so much over the last few months and we welcome you all to CAB and look forward to getting to know you all.
FROM CAB’S LAB™ – As promised, we return this month to report on the latest website features and enhancements released this month.
Design your own Submission Report™: Our Submission Report™ started out as a 2 page, PDF report with only a few sections when it was launched 5 years ago. Today, there are 6 tabs and over 25 different sections that are available on the report. This does not even include all the sub-reports that can be loaded up and drilled-down into. While we believe all the information included in the report is relevant to the entity’s operation, different users of our site may have different needs as it pertains to their specific roles and operations. To help users process the information most critical to them as efficiently as possible, we now offer subscribers the tools to customize which sections will be included in their default view of the Submission Report™. Using these tools, subscribers will have the ability to choose which tabs and sections should be displayed when viewing the Submission Report™ online, when downloading or receiving the automatic PDF by email and when scheduling a report to be sent to you on an automatic frequency. To access these options, log in to your account on CAB’s subscriber site, hover your mouse over ‘My Account’ on the menu bar and choose ‘Preferences’. On the Preferences page, you will now see ““. Clicking on the any of the three icons that follow will allow you to customize which sections will be displayed in the respective reports. Please note: if you do choose a custom format for the website version of the Submission Report, you will have the option of switching between your custom view and the standard, complete Submission Report with all the sections. As always, you can download our updated User Guide for details on changing your settings.
In the news this month we report:
NEW STATUTES – The States are continuing the focus of getting unsafe carriers off the road and punishing unsafe truck operations. This month Louisiana enacted legislation targeting carriers who violate out of service orders. A driver will now see his license suspended for 6 months for violating out of service rules and repeat offenses within 10 years would result in loss of driving privileges for two years. Louisiana also moved to prohibit texting while driving any vehicle. The National Safety Council reports that driver distractions, as well as alcohol and speeding, are leading factors in serious injury crashes. At least 28 percent of all traffic crashes – or at least 1.6 million crashes – involve cell phone use with an additional 200,000 crashes annually involving drivers who are texting.
Ohio also signed into law a bill prohibiting drivers from sending text messages while driving, although it is a secondary offense (meaning you have to be stopped for something else). Alabama, Idaho and West Virginia already acted this year to prohibit drivers from text messaging while at the wheel. The Idaho and West Virginia bans take effect July 1. The Alabama law takes effect Aug. 1. Similar bills are currently waiting signature in Illinois and New Jersey has a number of bills moving quickly through the system.
INTERMODAL CONTAINERS – The FMCSA has modified its equipment reporting requirements. The newest regulation eliminates the requirement for drivers to complete clean inspections and for intermodal chassis providers to file and retain the clean inspection reports. Reports will only be required for intermodal containers which reflect damages. The FMCSA has also indicated that inspection violations which are directed to the equipment provider will not be held against the motor carrier in evaluating crash accountability.
CHAMELEON CARRIER™ REPORTS – This month the FMCSA issued an out-of-service order and record consolidation order against WTSA US Express LLC, TJA Express Transportation and Wolf Trucking Company LLC, all listed at the same address in Racine, WI. According to the FMCSA’s order, WTSA US Express was closed down and deactivated by its owner, Tadeusz Wrzesniewski, and his son Adrian Wrzesniewski, in order to avoid submitting to a mandatory safety review. TJA Express was created as a true Chameleon Carrier™ to replace WTSA. In between the same individuals started up Wolf Trucking as a hedge against FMCSA actions. A separate out-of-service order was issued to Adrian Wrzesniewski for failing to “monitor drivers’ hours of service requirements, violations of drivers’ qualification requirements, commercial drivers’ licensing requirements and the controlled substance and alcohol testing requirements.”
DRIVER TURNOVER – According to the ATA, the annualized turnover rate for large truckload fleets rose slightly in the first quarter of 2012 with a much greater increase for small truckload fleets. It reports that the turnover rate for large truckload fleets rose 2% to 90%, its highest point since the first quarter of 2008. For carriers with revenues of less than $30 million in revenue turnover increased 16% to a whopping 71% in the first quarter; it has not been that high since the second quarter of 2008. Turnover at less-than-truckload fleets is only 8%, up only 1%.
DRUG AND ALCOHOL VIOLATIONS – The FMCSA undertook a drug and alcohol sweep in early May and has released the results of the inspections. The sweep resulted in 287 bus and truck drivers being removed and more than 128 companies facing enforcement actions.
NTSB REPORT – The NTSB has released its report following its investigation into a fatal bus crash last year. The NTSB has recommended that states provide a 10 year driving history on prospective employees of motor carriers, and enact requirements for onboard safety monitoring and speed governors. The report can be viewed here.
NAFTA – The FMCSA has accepted a fourth carrier to its cross-border trucking pilot program. Transportes Del Valle De Guadalupe of Baja California will operate one truck and one driver beyond the commercial border zone. There are currently an additional fifteen carriers with applications pending. In other news, surface trade between the countries is booming, with trade between Canada and Mexico 6.2% higher than last year. There is a total of $85.8 billion traded. U.S.-Canada trade reached $50.1 billion in March, a 2.9 % increase, and U.S.-Mexico trade reached $35.7 billion, an 11.2 % increase. Michigan led all states in surface trade with Canada at $6.3 billion, a 3% increase from March 2011. Texas led all states in surface trade with Mexico at $12.6 billion, an 11.5% increase from March 2011.
In other trending news, BTS reports that freight shipments in April 2012 (109.6) were at the fourth highest level since the early recession month of July 2008 despite the 3.8 percent decline from December 2011 (114.0 on the index), which was the highest level in the 22-year history of the series. After dipping to a recent low in April 2009 (94.3) during the recession, freight shipments increased in 24 of the last 36 months, rising 16.2 percent during that period. The combined freight and passenger TSI rose 0.4 percent in April from its March level. The combined TSI April 2012 level of 111.7 was 2.3 percent above the April 2011 level. The combined index is up 0.6 percent in five years and up 14.2 percent in 10 years despite recent declines.
FMCSA SAFETY RULES – In response to increasing criticism of proposed revisions to its safety rules, the FMCSA has extended, until July 30, the period for public comment on the CSA enhancements announced in March. The new enhancements are designed to strengthen certain BASIC categories by incorporating cargo/load securement violations into Vehicle Maintenance and changing the Cargo-Related BASIC to the Hazardous Materials BASIC to better identify hazmat-related safety and compliance problems. The FMCSA also advised that it would release the study of links between CSA violations and crash risk which was used to develop its methodology for assigning scores. We will, of course, provide with you a link to the report as soon as it is issued.
CASES
AUTO
When one motor carrier hits the cargo being transported by another motor carrier who was parked in a truck stop, the question rests with the jury to determine whether the striking carrier was at fault and should have taken steps to avoid the oversize cargo. The Western District of Virginia also held that the plaintiff had not stated a cause of action for equitable indemnification as the striking motor carrier had not yet been found negligent. The court also held that a claim for contribution must fail when the plaintiff alleged that the loss was the sole cause of the defendant. (Daily Express, Inc. v Howell’s Motor Freight, 2012 WL 2048191)
Even though the motor carrier only needed an MCS-90 for $750,000, when the insurer issued the endorsement reflecting a $1,000,000 limitation, the insurer was obligated to pay that amount when a judgment was rendered against the motor carrier. The court held that while the endorsement could not be issued for amounts below the minimum limits, the coverage afforded by the policy, if greater, would apply. The Northern District in Indiana also held that interest on the payment began to run from the time that the judgment was rendered against the motor carrier, as that was when the obligation to pay arose. (Fairmont Specialty Ins Co. v. 1039012 Ontario, Inc., 2012 WL 2343662)
The Supreme Court of Arkansas held that it was acceptable to exclude evidence of a motor carrier’s violation of post-accident safety requirements – including drug and alcohol testing – as the failure to comply with those regulations were not a factor in the loss itself. The court also held that they could not be used to support any claim for punitive damages. (Brumley v. Keech, 2012 Ark. 263)
CARGO
The Court of Appeals in Texas upheld the preemption doctrine in a pro se action. Plaintiff’s efforts to avoid the limitation of liability by alleging breach of trust, contribution and negligence failed. (Vaughn v. UPS, 2012 WL 2133594)
In the District Court in Utah the court held that the economic loss rule, which prohibits one from recovering more than what was contemplated under a contract, did not apply to the claims of oil a drill machine owner who sued a motor carrier for losses which occurred as a result of damages to the equipment while in transit loss. As the drill owner did not have the contract with the motor carrier the court refused to extend the doctrine. (Patterson UTI Drilling Co. v. Tri-State Trucking, 2012 WL 1922417)
In the Eastern District in Missouri you cannot pursue a broker simply by alleging that it acted as a carrier. Plaintiff’s allegations that the broker agreed to arrange transportation placed it squarely in the broker category and the court denied the motion to amend the complaint to allege carrier liability when there was no reasonable basis for such a claim. (Wallach Trading Co v. Team Freight, 2012 QL 1899380)
A consignee’s efforts to avoid a two year and one day suit clause failed in the 10th Circuit. The court held the consignee did not have an independent claim for recovery under the Carmack Amendment and also held that the consignee was bound by the bill of lading terms even when it was not a party to the bill of lading. (Flying Phoenix Corp. v. Creative Packaging Machinery, 2012 WL 2108175)
The Eastern district in Wisconsin held that a negligence claim against a transportation broker was preempted under the FAAAA. The court also held that a negligence claim asserted under state law for failure to make sure that the motor carrier had adequate insurance for the high value shipment would also fail because it arose as out the contractual agreement and would not support a separate tort. (NonTypical, Inc. v TransGlobal Logistics Group, 2012 WL 1910076)
MISCELLANEOUS
In a discovery dispute between the excess and primary insurance carriers for a trucker, the Eastern District of California held that the primary insurer, who was being sued for failure to settle within its policy limits, was entitled to seek discovery only on communications that the excess insurer had with the primary insurer. What the excess insurer thought about the “carrier liability” claim which was being asserted against a transportation broker for a serious personal injury claim was irrelevant to whether the primary insurer should have settled. (Travelers Indemnity Co. of Ct. v. Arch Specialty Ins. Co., 2012 WL 2116263)
A show cause order why sanctions should not be imposed was issued against a motor carrier, and its principal, when they failed to respond to various court orders to respond to post default judgment disclosure. The Southern District in Ohio found the actions sufficient to warrant sanctions. (Total Quality Logistics v. TW Transportation Solutions, LLC, 2012 WL 2045948)
