Welcome to Summer. We hope you are all taking some time to relax and enjoy a bit of a slowdown as we head into the holiday weekend. Life at the shore is good. Happy 4th of July. This month we report:
FILING INSURANCE LIMITS TO REMAIN THE SAME – The House rejected an amendment to the Transportation, Housing and Urban Development (THUD) Fiscal 2016 appropriations bill that would have opened the doors to an increase in insurance requirements for trucking and bus companies. As the restriction on increasing limits is also in the version passed by the Senate, while differences in the bill need to be worked out in a House-Senate conference and the ultimate bill signed by the President, it appears that there will be a freeze on current insurance requirements on trucking companies. We will let you know if anything more comes up on this issue.
FMCSA ATTACKED – At month end a bill was introduced in the Senate targeted at reformation of the FMCSA. Under the proposal a review of rules, guidance, regulations and enforcement policies would be mandated every five years and numerous steps and protocols put in place to limit the ability of the FMCSA to implement rules, with mandated oversight of the rulemaking process from the Transportation Research Board or the Department of Transportation Office of Inspector General. It will be interesting to see where this goes.
NHTSA REPORT – The Office of Inspector General released a report that the National Highway Traffic Safety Administration and its Office of Defects Investigation is “insufficient” in its handling of vehicle defects. In its audit, OIG looked into ODI’s procedures for collecting vehicle safety data, analyzing data and identifying potential safety issues, and determining which of these issues should be further investigated. The OIG determined that there was a lack of guidance on what information should be reported so that there could be early warning of the defects. All in all it was not a good rating for the department. The report is scheduled to be released later this year.
VEHICLES TRAVELED – We are back out on the road! The Federal Highway Administration has released data that shows Americans drove 987.8 billion miles in the first four months of 2015 Nearly 270 billion vehicle-miles traveled (VMT) were driven in the month of April alone. Broken down by region, the West – composed of 13 states – experienced the most miles traveled at 60.9 billion VMT, a 4.0 percent increase from last April. The Northeast – consisting of nine states – had the smallest VMT at 37 billion, According to a Department of Transportation press release this supports the DOT’s report that predicts a 43 percent increase in commercial truck shipments and a population increase of 70 million by 2045.
CARGO THEFT – The Texas Legislature has reached agreement on a bill to stiffen punishment for truck, rail or container cargo thieves. Under the new law cargo theft will be a specific offense and impose escalating fines and punishment based on the value of goods. Cargo theft in Texas was reported to be $23 million between 2012 and 2014. The bill defines offenders as anyone who “knowingly or intentionally conducts, promotes, or facilitates an activity” involving the receipt, possession, concealment, storage, barter, sale, abandonment or disposal of stolen cargo.
CargoNet also reports that the looming holiday generally results in increased cargo theft. According to CargoNet the upcoming holiday week will likely see the potential for increased activity by cargo thieves this week and next, with the July 1-7 week accounting for 76 cargo theft incidents and nearly $11 million in loss value in the last three years. The very cool infograph created by our friends at CargoNet can be viewed here.
FLEET BANKRUPTCIES – Avondale Partners reports that only 85 motor carriers, with a total of 1,025 trucks, went out of business during the first quarter. The fleets had an average size of 12 vehicles, which is a 90% decrease when measured by truck count year-over-year. Low fuel good rates and tight capacity were significant in helping keep carriers on the road.
AMENDMENTS – The House approved new requirements in the hours-of-service restart study and an amendment permitting the use of twin 33-foot trailers. The bill would require that, before the Federal Motor Carrier Safety Administration could attempt to reinstate the suspended 34-hour restart rule, a study must be completed addressing whether the rule has safety benefits. The Senate has also passed an amendment permitting larger trailers. Now the two need to reconcile the amendments.
SIZE AND WEIGHT LIMITS ON VEHICLES – The DOT released a long awaited study on truck size and weight limits. Unfortunately the report does not say much, despite the size of the report. The DOT stated that “…efforts to assess the full effects of the size and weight of various trucks are hindered by many of the same significant data limitations identified in previous studies. The Department finds that the current data limitations are so profound that no changes in the relevant laws and regulations should be considered until these data limitations are overcome.”
MORE STUDIES – Brookings Metropolitan Policy Program has released reports examining the volume of goods flowing through U.S. ports and across the nation by truck, train, boat, plane, and pipeline, including the fact that trucks continue to dominate domestic goods trade.
“The Great Port Mismatch: U.S. Goods Trade and International Transportation” focuses on the role air, land and sea ports play on the movement of goods at a regional level. The reports are to reveal that:
• Only 4 percent of goods moving through ports start or end in the port’s local market. Ports primarily serve customers in other parts of the U.S.
• The largest 25 port complexes in the U.S. move 85 percent of all internationally traded goods.
• The average international good travels over 1,000 miles within the U.S. to get from a port to its market, underscoring how international trade relies on the domestic freight network.
Another report is “Metro Modes: Charting a Path for the U.S. Freight Transportation Network,”
• Trucks dominate domestic goods trade, carrying up to 75 percent of the value and weight of commodities. Air modes tend to move high-value commodities like precision instruments, and railroads and pipelines specialize in raw materials like energy.
• Between neighboring metro areas like Dallas/Houston and Washington/Baltimore, trucks can account for 90 percent or more of freight activity, and this mode heavily influences their own and national infrastructure needs.
STATE OF LOGISTICS REPORT = CSCMP released its 26th Annual “State of Logistics Report®”. Interestingly it reports that logistics costs rose to $1.45 trillion in 2014, a 3.1% increase from the previous year. The reports also indicates that the transportation sector grew by 3.6 percent in 2014 because of stronger shipment volumes
CURRENT CASES
CARGO
The Southern District in Florida considered the issue of liability for negligent selection of a motor carrier who was alleged to have stolen cargo. The Court concluded that the shipper failed to sustain its burden of establishing negligent selection as there was no admissible evidence that the defendant should have known of the carrier’s propensity for theft, the carrier’s poor safety record did not establish a propensity for theft, and failure to ensure that the carrier had adequate insurance did not support a claim. The Court dismissed the complaint. (Mega International Trade Group v. A-Link Freight, 2015 WL 3823680)
Can a motor carrier have a forum selection clause in a bill of lading under Carmack? The District Court in Texas held that such clauses were in violation of the statutory provisions of Carmack. (Ledet v Across USA Moving, Inc., 2015 WL 75555)
Although not motor truck cargo related, there was an interesting decision in the Southern District of New York over the events of Hurricane Sandy and whether it was legally an Act of God absolving a carrier of liability. The Court concluded, in fully detailing all of the events and the obligations of carriers, concluded that the carrier was not liable for the loss. (Lord & Taylor LLC v. Zim Integrated Shipping Services, 2015 WL 3630443)
The question of whether a domestic shipment IS subject to a through bill of lading, or is an interstate shipment subject to the Carmack Amendment is not easy. The District Court in South Carolina concluded that the issue was not easily resolved, holding that questions of facts required a hearing on the subject. The ocean bill of lading left the place of delivery blank, although there was a consignee whose address was the final location for the interstate delivery and it was unclear if the shipment was prepaid. The Court concluded that those facts needed to be resolved to determine which law applied. The Court also held that whether there was a separate bill of lading may not be relevant to the determination. (G&P Trucking Co., Inc. v, Zurich American Insurance Company, 2015 WL 3842842)
A motor carrier who sought removal to Federal Court on an intrastate shipment found itself subject to payment of fees and costs when the plaintiff moved to remand. The District Court in Arizona held that the motor carrier knew it was an intra-state shipment and not subject to the Carmack Amendment and should not have tried to remove the case. (First Solar Inc. v. JB Hunt Transport, 2015 US. Dist Lexis 80449)
Does the Carmack Amendment preempt a claim for personal injuries incurred while cargo was being unloaded? The Eastern District of New York concluded that it was not preempted, allowing an action to proceed. The Court also held that there were questions of fact as to whether the driver was involved in the unloading process and potentially culpable for the fatality. (Koch v. McConnell Transport Limited, 2015 WL 3470182)
AUTO
A pro se plaintiff’s efforts to argue that an insurer was violating anti-trust laws in the way that it issued trucking policies and handled claims was unavailing in the Northern District of New York. The Court dismissed the Federal claims as untimely and declined to exercise jurisdiction over any state law claims, leaving plaintiff to refile in a State Court. The Court further concluded that the defendant insurer was not estopped to deny that the plaintiff’s policy was not in place at the time of the plaintiff’s alleged loss. (Maki v. Travelers Companies, 2015 WL 3447629)
The Supreme Court in Alabama concluded that a trucking company was entitled to a writ of mandamus compelling the Trial Court to transfer venue to the jurisdiction where the accident occurred. The Court determined that under an interest of justice evaluation the weight compelled the transfer from the venue selected by plaintiff as the only connection to that venue was plaintiff’s residence. (Ex Parte Quality Carriers, 2015 WL 3537471)
The Eastern District in Missouri upheld a Daubert attack on the testimony of an accident reconstructionist expert, William Hampton. While the Court concluded that he could testify as to scientific opinion on the accident reconstruction, he could not testify as you human behavior of the driver as he had no personal knowledge of behavior at the time of the accident. (Jones v. Beelman Truck Company, 2015 U.S.Dist LEXIS 72426)
The issue of whether a motor carrier can be liable for negligence when it has already conceded vicarious liability was considered in the District Court in Nevada. The Court held that there was no independent tort when liability was already accepted. It also concluded that you could still proceed against the driver, further concluding that contributory negligence of the plaintiff was still at issue. (Alvarez v. McMullin, 2015 WL 3558673)
An appellate Court in Texas reversed a judgment against a trucking company and remanded the case back for a new trial. The Court concluded that the Trial Court abused its discretion on the issue of spoliation and that the action likely impacted the verdict against the trucking company. For another trucker the Court held that there was no evidence of responsibility for the loss and dismissed that carrier from the remanded suit. (Smith v Williams, 2015 WL 3526089)
