Welcome summertime. I hope you are all taking some time to enjoy the weather, although I must say it has been pretty hot up here in the East Coast where we have spent the week sweltering in a severe heat wave. But at least it makes you slow down a bit – because it is too hot to move very fast.
This month we report:
OUT OF SERVICE REPORTS – Here is this month’s list of carriers identified as imminent hazards and put out of service by the FMCSA. The number is lower than last month but the focus continues to be on passenger carriers. These passenger carriers were put out of service: Advanced Ventures LLC of Springfield, VA as an imminent hazard to public safety, Lucky River Transportation Corp d/b/a Lucky Star of Boston, MA as an imminent hazard to public safety and Midnight Express, LLC of Olathe, KS because “company’s owners, Adam Breidenthal, Derrick Hansroth and Edward Goetz, were operating an unauthorized and unsafe commercial transportation service.” . There was one trucking company, E & K Trucking, Inc. of Commerce City, CO, which was declared an imminent hazard because it was still operating despite having it operating authority revoked for safety reasons in December 2012.
POLITICAL CHANGES – As of press time the DOT does not have their newest leader. Mr. Foxx is still awaiting the expected Senate nomination. With the recent passing of Sen. Frank Lautenberg, there was a space in the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety and Security. Sen. Mark Warner of Virginia will chair that subcommittee.
CARGO THEFT REPORT – Freightwatch has reported that cargo thefts from commercial trucks are down in the U.S. for the second quarter. However, the average value of those losses has increased. In the period from March through May 2013, FreightWatch recorded a total of 185 thefts in the United States, with 79 thefts in March, 44 in April and 62 in May, according to its latest report. The average loss value per incident during this period was $156,408. Compared with the previous quarter, thefts fell by 16 percent, although the average loss value increased by 9 percent.
In the period from December 2012 through February 2013, FreightWatch recorded a total of 199 thefts in the U.S., with 77 thefts in December, 53 in January and 69 in February. The average loss value per incident during this period was $133,711. Compared with the previous quarter, thefts fell by 20 percent and average loss value dropped by 39 percent.
Food and drinks, were once again the most commonly stolen type of load, with 50 thefts reported in the quarter. These thefts composed 27 percent of all incidents from March to May. The pharmaceutical industry experienced 21 thefts, 11 percent of the total, and 19 thefts, 10 percent of all thefts, of electronics.
California remained the state with the most thefts, followed by Texas, Florida, Illinois and Georgia. The 49 thefts in California alone accounted for 26 percent of all thefts nationwide.
Unsecured parking was the most common spot targeted by cargo thieves in the incidents in which location types were recorded. Incidents involving theft of trailer, 126 in all, accounted for 68 percent of all thefts. The clothing/shoes category had the highest average loss value at $432,750.
HOURS OF SERVICE – As the clock ticks towards the effective enforcement date of the new hours of services rules trucking executives seek a further delay from Congress pending their fight to modify the rules. In addition, an ATRI study concludes that that the upcoming restrictions to the 34-hour restart provision of the hours-of-service rule for truck drivers will cost the trucking industry $189 million annually — a $322 million difference from the $133 million benefit that the Federal Motor Carrier Safety Administration estimated when it wrote the new restrictions. The changes include the fact that drivers can only use the 34-hour restart to reset their weekly driving limits once every seven days. In addition, the restart will have to include two periods from 1 a.m. to 5 a.m.
CSA – The FMCSA has announced that there will be coming changes to CSA to help make it clearer that fleets’ scores are not meant to be safety ratings. The changes will not affect how FMCSA calculates scores or uses CSA to prioritize its enforcement actions. FMCSA also seeks to make it clear that a carrier should not be considered unsafe just because the agency does not have data on that carrier.
NAFTA – The Teamsters union and the Owner-Operator Independent Drivers Association have filed for reconsideration of the court’s prior decision that upheld the government’s cross-border Mexican trucking plan. Additional Mexican carriers are expected to be approved and given operating authority.
ATA AMERICAN TRUCKING TRENDS 2013 – The ATA report was released this month, which concludes that trucking continues to be the force to be dealt with in the movement of freight. The report indicates that trucks moved 9.4 billion tons of freight in 2012, or 68.5% of all domestic shipments and generated $642.1 billion in gross freight-related revenues, or 80.7% of the nation’s freight bills. In addition, trucking employs 6.9 million people, and the majority of trucking companies are small businesses – with 90.5% operating six or fewer trucks. Only 2.8% of fleets operate more than 20 trucks.
FUNNY MAPS – I had to put this link in because we speak to so many of you through out the country each day. I thought it is funny to see how differently we speak and call common items. Check it out when you have nothing to do. (thanks Steve Gardner for keeping it light.)
LARGE TRUCK SAFETY – The ATRI released its large truck safety report, which evaluated a decade of medium- and heavy-duty truck crash records and identified notable crash trends specific to each population. Using an ATRI-designed “crash rate index”, ATRI isolated specific variables such as vehicle type, crash location, and weather to determine the degree to which certain factors influenced crash trends for medium- and heavy-duty trucks. The analysis revealed noticeable differences in safety trends between different truck sizes, with medium-duty generally performing worse than heavy-duty trucks. In addition, the results indicated disparities between interstate and intrastate motor carriers. A copy of the report can be viewed here.
NATIONAL FREIGHT ADVISORY COMMITTEE – The members of the National Freight Advisory Committee have been announced. The Advisory Committee is comprised of 47 voting members from outside the Department of Transportation. The Deputy Secretary and Under Secretary of Transportation for Policy, as well as representatives from other Federal agencies with freight-related obligations will serve as ex-officio members. Members will serve two-year terms and meet at least three times per year. Unfortunately there are no insurers on the list of members.
CASES
CARGO
The 4th Circuit moved toward a more stringent application of a limitation of liability. While a bill of lading was issued which referenced a carrier’s tariff, the court held that when the bill of lading did not specifically reference the applicable price list governing the shipment and the shipper was not familiar with the list, the requirement under Carmack that there be an agreement to a limitation was not met. (ABB v. CSX Transportation, 2013 WL 2451088)
The owner of a tractor trailer used to transport cargo bore no liability for a cargo loss when the driver hit a bridge. The Middle District in Louisiana held that the owner could not be liable as a carrier under Carmack. (Maass Flange Corp. v. All-State Hot Shot, LLC, 2013 WL 2422874)
Who is responsible when an imposter arrives and takes the cargo? The Western District of New York held that a shipper who sells goods FOB origin bore no responsibility for a loss after the goods were taken by an imposter. The plaintiff’s efforts to allege the claim as one of negligent failure to verify the truck could not defeat the contract agreement. (Stampede Presentation Products v. Productive Transportation, Inc., 2013 WL 2245064)
Over in Ohio, the Court of Appeals upheld a UPS limitation of liability and also concluded that the cargo owner was not in privity with UPS when UPS was actually engaged by a UPS store for the transport. (Verhoogen v. UPS, 2013 WL 2444716)
The District Court in New Jersey remanded a case back to state court which was filed against various trucking companies alleging fraud and breach of contract actions in billing practices. The court held that the action was not subject to the preemptive effect of the ICCTA, compelling removal to state court. (Mitsui OSK Lines v. Evans Delivery Co., Inc., 2013 WL 2477271)
AUTO
A one million dollar verdict against a trucking company was upheld by the 8th Circuit following a trial on a personal injury action in which negligence was acknowledged. The 8th Circuit concluded that the trucking company waived its right to object to the plaintiff’s expert testimony on medicals when it was advised, in discovery, that the physicians would be called and defendant was given an opportunity to object or demand additional information. (Bradshaw v. FFE Transportation Services, 2013 WL 2372138)
A shipper was held to have a duty to insure a safe workspace and therefore potentially liable for the death of a truck driver who was injured when cargo struck him. While the motor carrier and the shipper knew that the cargo was not strapped down when the driver arrived, that did not preclude the Court of Appeals in Indiana from finding that the shipper continued to have a duty to the driver. (Huffman v. Dexter Axle Company, 2013 WL 2367995)
How quick the accident can occur! The Appellate Court in Illinois held that a motor carrier’s auto policy applied when the motor carrier hired an owner operator who was on his way, at the request of the motor carrier, to the mechanic to get his vehicle inspected before actual assignments were handed out. The Court also held that the numerical designations used by the insurer were sufficiently ambiguous when applied to leased vehicles, concluding that the vehicle was covered under the policy. The non-trucking use policy was held inapplicable to the loss. (Progressive Premier Insurance Company of Illinois v. Emiljanowicz, 2013 WL 2326857)
The Northern District in California, applying the contractual agreed upon Ohio law, held that a motor carrier breached its contractual obligation to defend and indemnity a shipper in a personal injury action. The indemnity extended to actions in which the shipper was alleged to have committed its own negligent acts in causing the loss. The court also held that there were questions of fact as to whether the shipper waived the obligation to be named as an additional insured on policies when it accepted certificates of insurance without the named insured acknowledgement. (Chiquita Fresh North American v. Greene Transport Co., 2012 WL 2468249)
A trucking company was not responsible for the violent attack by a driver on a third party. The Court of Appeals in Kentucky held that a motor carrier is not obligated to do a background check and is entitled to trust the information provided on an employment application. Finally the court held that the use of the vehicle was not connected to the violence. (Carberry v. Golden Hawk Transportation, 2013 WL 3105549)
One insurer was permitted to pursue its insured for recovery of large deductibles in the insurer’s place of business, rather than the motor carrier’s location. The Middle District of Pennsylvania concluded that the insurer availed itself of the services provided by the insurer in Pennsylvania by submitting the various claims to that location. (Lincoln General Insurance Co. v. A&G Commercial Trucking, 2013 WL 2896824.)
Happy 4th of July. Please take a moment to remember all of our servicemen and women who are out there protecting our ability to celebrate this National holiday.
