The days when a shipper or consignee could tell a trucking company to deliver a load within a certain narrow time window or face penalties or loss of business are coming to an end, speakers at the Transportation and Logistics Council’s 41st annual conference told attendees.
As reported by the Journal of Commerce, experts said that shippers are being warned to prepare for major and potentially costly changes in the way they contract or hire trucking companies to move freight as economic, regulatory and legal pressures reshape the transportation landscape.
Under a driver coercion regulation being proposed by the FMCSA, a shipper or consignee could be accused of “coercing” the truck driver to violate federal safety rules in order to make that on-time delivery, and coercion will carry stiff financial penalties.
“The driver coercion rule-making could be the most significant change we’ve seen in transportation in our lifetime,” Mike Regan, chief relationship officer at TranzAct Technologies, told the more than 200 shippers, carriers and brokers at the conference.
“How many of you are now prepared to verify that when a truck driver pulls up to your dock, he has the hours available to move your freight?” Regan asked. No one in the audience, which included more than a few receivers and shippers of freight, raised their hand.
If the rule is put into effect as proposed, shippers would need to make substantial changes to supply chain processes.
The driver coercion rule-making is just one part of a larger trend in regulation and governance that could have far-reaching and long-lasting effects on transportation. The Compliance, Safety, Accountability, or CSA, initiative came under fire, with speakers and attendees calling the FMCSA’s release of a smartphone app sharing CSA scores “a poke in the eye,” JOC reports.
The use of those CSA scores in accident litigation could have the most significant and widespread impact. “We’re going to see the whole way we contract with carriers change as part of a paradigm shift,” said Hank Seaton, an attorney with the Seaton & Husk law firm.
The days when a freight broker or shipper has thousands of small carriers to choose from and a one-size fits all procurement contract are numbered, Seaton suggested, because brokers and shippers face greater liability in negligent hiring lawsuits following accidents.
“Courts are treating shippers who hire their own motor carriers more like brokers, and brokers may be responsible for motor carrier negligence,” said Ronald L. Bair, a shareholder in the Bair Hilty law firm who has defended companies against negligent liability lawsuits.
Seaton also said the coercion rule-making will force changes in shipper practice. “Prepare to pay detention charges and accommodate carrier unloading on arrival,” he said. “A lot of receivers say ‘if it’s not here on time, we’ll reject it,’ ” Seaton said, but not for much longer.
“The concept of ‘reasonable dispatch’ (delivery within a reasonable time, depending on conditions) is really what shippers are going to have to live with,” he said. “That whole dynamic is going to come into play as a result of the regulatory focus on safety.”