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Category Archives: Brokers

Marketing…Marketing…Marketing – some pointers on data privacy

A couple of days ago we were shocked to receive notice of a pending lawsuit against TFS for sending out an unsolicited text message to a transport company promoting some of our services on www.TFSMall.com.  The number we had texted information too was listed as a business number with the FMCSA and so was available in the public domain for use by other businesses wanting to contact them.  When you sign up with the FMCSA, you sign a document called an OP1 that says that you accept that your phone number will be distributed to other organizations for them to contact you via either calls, email, or text.

Image result for data privacy

We have and will always be proud of our level of transparency that we have with both our clients, potential clients, vendors and business partners when it comes to information we utilize for in-house marketing and also what we post on our websites.  We have all the relevant disclaimers on our websites and email communications; we want you all to learn and benefit from all of our experiences.

  1. Never use your personal cellphone number for business.  You will be amazed at how many different locations your number will start appearing online and how many calls and texts you will receive.  If you are on a tight budget as a new business, there are a variety of cost effective options available to you.  Google Voice for example, will set you up with a free telephone number that will forward to your cell number.  You can even use their app to dial out from that free number, via your cellphone service.  There is no cost associated with a google voice phone number.  If you need help setting this up our team would be happy to help.
  2. If you are going to be emailing or texting potential business partners, always include in your signature an option to “unsubscribe”.  All email software has an option for setting up a signature, so you can include an unsubscribe option there so that you do not have to keep on typing it in.   Again our team can help you with this if needed.
  3. When sending out emails or texts to a large number of recipients use software that is designed to do the job.   www.constantcontact.com and www.mailchimp.com are examples of email marketing software.  www.skipio.com and www.eztexting.com are examples of text marketing software.  FYI there may be costs associated with using these applications so make sure you do  your due diligence.  If you need help please let us know.

When it comes to the crunch, as a business owner, there are always things that will come along that you will have to deal with  that you were not expecting.  Take them in your stride, take a deep breath and be sure to always work with credible, well organized companies, and build a team that you can trust and rely on!

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Supplemental Comments – Agency ANRPM for RIN 2126-AC10

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Women in Transportation

This is a topic that the team at TFS is reviewing and researching. We hope to have some recorded interviews and/or podcasts soon. If you are a women and work in the industry, please contact us…we want to hear from you!

https://www.abc15.com/news/region-phoenix-metro/central-phoenix/more-women-getting-behind-the-wheel-for-trucking-jobs

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Free Webcast from JOC.com: 2019 Trade & Transportation Outlook: A BCO Primer for a Turbulent Year Ahead

Sign up for this free Webcast from JOC.com – a great free webcast for shippers and forecast for where shipping is heading in 2019.

 

Offered by JOC.com

 

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Register at link below.

 

https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=D41D278E-F739-431A-9189-54B91709CF7E&AffiliateData=2019tradeoutlook&utm_campaign=CL_JOC%20ASIA%20%2012%2F24%2F18%20TF%205pm_PC9156_e-production_E-22870_JL_1223_1701&utm_medium=email&utm_source=Eloqua

 

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FMCSA reminds truckers drug, alcohol clearinghouse coming soon

https://www.thetrucker.com/fmcsa-reminds-truckers-drug-alcohol-clearinghouse-coming-soon/

The clearinghouse will be a professional truck driver database that will serve as a centralized record of all failed drug or alcohol tests, whether from pre-employment screenings, post-crash tests or random. (©2019 FOTOSEARCH)

Remember two years ago, when it seemed like the entire trucking industry was counting down the days to the ELD deadline?

Well, the Federal Motor Carrier Safety Administration (FMCSA) wants drivers to be aware of another countdown happening right now, although with much less hoopla than the Great ELD Panic of ’17.

At the recent Mid-America Trucking Show, Joe DeLorenzo, FMCSA director of enforcement and compliance, gave a presentation to raise awareness about the soon-to-be launched federal CDL Drug and Alcohol Clearinghouse.

Mandated as part of the Moving Ahead for Progress in the 21st Century Act, or MAP-21, in 2012, the same piece of legislation that bore the ELD mandate, the drug and alcohol clearinghouse is scheduled to launch January 6, 2020.

The clearinghouse will be a professional truck driver database that will serve as a centralized record of all failed drug or alcohol tests, whether from pre-employment screenings, post-crash tests or random. All refusals to take a drug or alcohol test will also be recorded.

“I came here with a bit of a mission on the drug and alcohol clearinghouse rule,” DeLorenzo said to the MATS audience. It has come to the agency’s attention the clearinghouse has been flying under the radar, a bit, and not enough drivers seem to know about it or they haven’t gotten a full explanation of what the clearinghouse will contain and what it will be used for.

DeLorenzo said drivers have said to him, “Well, I don’t do drugs, so I don’t have to worry about this.”

“Actually, that’s not the case,” DeLorenzo said. “Everybody needs to know about this and get going on it.”

Starting in January, carriers will be required to query the database as part of the new-driver hiring process to ensure that the candidate does not have any failed tests or refusals in the previous three years. Carriers can only gain access to a driver’s record and make the mandatory query with the consent of the driver, and the only way a driver can give that consent is to be registered in the clearinghouse.

So, technically, drivers are not going to be required to register in the clearinghouse, DeLorenzo said. However, if you ever want to get hired anywhere again you’ll have to be registered in the clearinghouse.

“If you’re just kind of staying where you’re at, no intention of leaving, or if you are working for yourself, or if you are nearing retirement, you may decide not to register,” he said. “But in an industry with 100%-plus turnover, I know people are always looking for a new job, a different job, a better job. Any driver who’s going to apply for a new job after this rule goes into effect is going to have to have an account and is going to have to be able to go in.”

DeLorenzo explained why the clearinghouse has been set up this way. Today, when someone applies for a job, they get tested as part of the process. They fail the test and the carrier doesn’t hire them. Three months later, they stay clean just long enough, the apply somewhere else and that company hires them, not knowing about the prior failure.

Starting January 6, carriers will be required to upload notices into the clearinghouse of all failed drug tests by drivers and driving applicants, as well as all refusals to test, as they occur.

The database is designed to go back three years. At first, employers will have to conduct both electronic queries within the clearinghouse and manual inquiries with previous employers to cover the preceding three years to meet the mandated hiring requirement. As of January 6, 2023, they will only need to check the clearinghouse.

Drivers’ records will only contain positive tests and refusals. When a prospective employer makes a query, they will be told if the record is clean. If there are entries, they will be able to get more details.

If a driver has a failed test, the database will also record whether that driver has completed the return-to-duty process.

Drivers will also be able to review their own records, DeLorenzo said, which is another incentive to register. If a driver finds an entry they wish to dispute, they can file a DataQ request to have it corrected.

The clearinghouse website is already up and running. Drivers can go to Clearinghouse.fmcsa.dot.gov to read about the clearinghouse and to register their email addresses for any updates. Actual registration is scheduled to begin in October.

DeLorenzo said he is hoping to raise more awareness about the clearinghouse now so they start registering in October instead of finding out the hard way come February when they try to apply for a job.

“What I’m trying to avoid, actually, is human nature, which is to wait until the very last minute.”

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ANPRM Submission

Subject: Comment- Agency ANPRM for RIN 2126-AC10 Broker and Freight Forwarder Financial Responsibility

Download document here or visit the downloads page in the TFS Transportation Directory https://www.tfsmall.com/tfsdownloads/

https://www.tfsmall.com/wp-content/uploads/2019/04/AMPRM-Submissions.pdf


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Map-21

https://www.fhwa.dot.gov/map21/

Everyone working in the US transportation and logistics industry should be reading and understand the results from this important piece of information pertaining to “zero claims tolerance policies” and the new guidelines!

Here are the comments from the roundtable meeting on June 16th, 2016

DATE:  June 16th, 2016   

FROM:  Marold Studesville, CEO – Transport Financial Services, FMCSA Filer Acct No. 26027                                                                                                                                                         TO:  Federal Docket Management System – Docket ID No. FMCSA-2016-0102                                                                        RE:  Post-Event Comments – Broker & Freight Financial Responsibility Roundtable, 20 May 2016

INTRODUCTION

Transport Financial Services (“TFS” herein) was one of only two federally authorized BMC-85 security instrument providers specifically invited by the FMCSA to participate in subject roundtable discussion, the other being Pacific Financial Association (“PFA” herein).  Significantly, those particulars of PFA’s operations material to the stated purpose of subject roundtable discussion had been directed to the FMCSA’s attention repeatedly over the course of the past decade by competing BMC-84 security instrument agents and brokers (as distinct from the actual insurance “carriers” involved), which self-serving representations had included the verifiable fact that said “financial institution” within the meaning of 49 CFR 387.307 (c) currently maintains some 3,500 BMC-85 broker and freight forwarder security instrument filings, covering nearly 30% of that entire market.  On the other hand, with less than 10% of PFA’s volume of such filings, the particulars of TFS’s operations material to the stated purpose of subject roundtable discussion had been directed to the FMCSA’s attention only recently by TFS  itself, when on 4 November 2015 my BMC-85 provider became the first qualified business entity ever to actually file a formal “Request for Immediate Suspension” of an FMCSA licensed broker’s actual operating authority “Registration” pursuant to the express provisions of 49 USC 13906 (b) (5). Unfortunately, as of this date no regular informal procedure for the implementation of such a sanction for FUTURE “Requests” of that nature prior to a full course of further rulemaking, which procedural expedient TFS has suggested still might be effected along the lines of just such a pre-rulemaking sanction already manifest in the FMCSA’s 2014 “Order to Suspend Operating Authority Registration” of  Espinal Trucking, MC-795000 (which had been issued without reference to any “CFR” based legal authority whatsoever), has eventuated.

By way of contrast, consider the imprecise multi-stage process entailed in a BMC-85 provider’s mere submission of a “Notice of Cancellation” for a particular broker’s security instrument filing pursuant to certain provisions of 49 USC 13906 (b) (4) still subject to those elements of the most recent iteration of the Form BMC-85 marked “Revised 03/11/2014”, as now preserved though just such a post MAP-21 effective “rulemaking” date.  To quote from the 4th paragraph of TFS’s “Request for Immediate Suspension” discussed at the roundtable, in default of some informal accelerated procedure along the lines of that employed in 2014 in “The Matter of … Espinal Trucking”, MC-795000, for FUTURE “Requests” of that nature, financially stricken “… brokers not only (A) would be unlikely to comply within the thirty (30) day time-specific requirements of BMC-85 numbered paragraphs 7 and 8 … but also would be likely (B) to take advantage of the additional thirty (30) day notification period specified in numbered paragraph 9 thereof prior to cancellation of such a broker’s security instrument filing [whether or not leading to immediate suspension of such a broker’s operating authority registration acordingly] in order to continue booking, dispatching, and billing shippers for movements they probably never even contemplated paying the motor carriers retained during the ensuing sixty (60) day “window” afforded through that full process.”

AREAS OF AGREEMENT

Uniquely, quite unlike the starkly negative reactions of those roundtable participants speaking on behalf of BMC-84 insurance brokerage interests, as well as those speaking on behalf of certain motor carrier and/or transportation intermediary trade associations also sharply critical of both (A) the nature of BMC-85 security instruments as offered, and (B) the administrative procedures employed by that industry generally, the entire roundtable panel appeared to approve of both the theory and practical applications of the “Immediate Suspension” of the actual operating authority registration (as distinct from merely the security instrument filings) of financially failing brokers, which my BMC-85 provider had introduced.

Furthermore, the conspicuous inability of those same roundtable participants speaking in favor of BMC-84 insurance brokerage interests to actually cite, or otherwise demonstrate convincingly any statistically significant pattern of failure regarding any aspect whatsoever of the BMC-85 industry’s ability to pay legitimate claims asserted against that particular class of security instruments over the course of the past five decades (even in comparison with the BMC-84 industry) can only be construed as establishing at least constructive agreement as to the demonstrable efficacy of such “Trust Fund” based arrangements for that entire period of time.

AREAS OF DISAGREEMENT IN GENERAL

To be sure, virtually all such roundtable participants conspicuously unable to assert any but purely anecdotal negative criticisms of the BMC-85 industry up until now generally consistently predicted (albeit without reference to any supporting actuarial data whatsoever) some anticipated EVENTUAL “readily available funds” total meltdown attributable to alleged fundamental shortcomings in that particular variety of transportation intermediary security instruments.  Significantly, such roundtable participants persisted in those predictions despite the fact that the sole basis of the conviction and restitution order finalized against the owner of Oasis Capital, the only BMC-85 provider ever to be terminated pursuant to ICC, FHWA, or FMCSA  regulatory enforcement action for collateral related reasons over the course of the past five decades turned out be predicated ENTIRELY on imputed fiduciary abuse involving a failure to effect timely REFUNDS (and not to any deficiencies pertaining to the initial collection and verification) of “the funds comprising the corpus of …

[each such particular]

trust fund” involved in that quite unique enforcement action (to cite BMC-85 numbered paragraph 5).

Essentially, in the interests of avoiding redundancy with respect to the responses of the the BMC-85 industry participants generally to the starkly negative reactions of those roundtable participants speaking on behalf of insurance brokerage interests, as well as to those speaking on behalf of certain motor carrier and/or transportation intermediary trade associations also sharply critical of both (A) the nature of such security instruments as offered, and (B) the administrative procedures employed by the BMC-85 industry generally, particularly when considered within the context of the “Topics for Roundtable Discussion” enumerated under categories (1) through (6) at the conclusion of the FMCSA’s “Notice” for subject “Financial Responsibility Roundtable” posted on 27 April 2016, TFS hereby reiterates and incorporates the entirety of PFA’s post-event “Comments regarding FMCSA roundtable on May 20, 2016”, submitted previously over the signature of that BMC-85 provider’s CEO, John Gilding, as an organic element of these TFS “Post-Event Comments” as well through this reference.

AREAS OF DISAGREEMENT IN PARTICULAR

More particularly, TFS disagrees with those frequently repeated assertions recorded during the course of subject roundtable discussion  to the effect that BMC-85 providers simply are not entitled to assume the financial security responsibilities established through such “Trust Fund Agreements” as actual “Trusts”, or to represent themselves as “Trustees” thereof, absent concurrent state licensing and regulation for that express purpose,  To be sure, those frequently repeated assertions necessarily would entail the assumption that such arrangements could only be initiated lawfully through each “Trustor” having ALREADY secured $75,000 in cash or an immediately negotiable check prior even to approaching a BMC-85 provider, which then must be deposited with some OTHER state authorized and regulated “financial institution” in an insured account (or kept in the form of cash in a drawer) in order to qualify as “readily available funds” for payment “directly to a shipper or motor carrier any sum or sums which Trustee, in good faith, determines that the Trustor has failed to pay and would be held legally liable” (to cite numbered paragraph 6 thereof).

Well, In the first place, quite apart from the obvious consideration that a number of the participants responsible for such an assertion were themselves attorneys who (one must assume) had not bothered to become licensed as “trust companies” prior to opening their “Client Trust Accounts”, since such arrangements naturally would be subject to regulatory preemption for such purposes by state bar licensing agencies, such “officers of the court” consistently ignored the fact that essentially comparable BMC-85 “Trust Fund” arrangements naturally would be subject to regulatory preemption by the FMCSA has been clearly established by both (A) the unequivocal provisions conveyed through BMC-85 numbered paragraphs 1 through 11, and (B) the express itemization of the full range of state regulated “Financial Institutions” within the meaning of 49 CFR 387.307 (c) still qualified (“as of October 1st, 2014”) to apply to the FMCSA for authority to file, issue, and administer BMC-85 security instruments, as expressed in paragraphs (1) through (8) thereof.  Significantly, the category “trust company” is only ONE of the more than a dozen varieties of state authorized and regulated “financial institutions” (including such business entities as collection agencies, check cashing parlors, and pawn brokers pursuant to the somewhat nonspecific language of paragraph (8) of that subsection) designated for such purposes.

As a matter of fact, paragraphs (1) through (5) of 49 CFR 387.307 (c) designate no less that that precise number (five) of those categories of “financial institutions” commonly referred to as “banks” (with the only reference to the actual term “trust company” having been included, as if in an afterthought, in paragraph (2) thereof).  By way of an historical overview, the very first iteration of the Form BMC-85 had been developed by the ICC in response to the situation prior to the Motor Carrier Act of 1980, back when there were fewer than 50 licensed “property” brokers (and virtually no remaining “passenger” brokers) in the entire country.  For that reason, consequent (A) to the consideration that at the time the only capacity in which such transportation intermediaries has been authorized to serve in economically regulated interstate transportation was as non-exclusive “agents” for more than one authorized motor carrier, and (B) to the consideration that in those days motor carriers tended to be utterly disinterested in non-exclusive “agents”, as distinct from exclusive, or “bona fide agents” within the current meaning of 49 CFR 371.2 (b), for obvious competitive reasons, it follows (C) that almost the only exception to such a tendency prior to 1980 would have been in the case of established business entities, such as large warehouse operators, able to command a significant volume of over-the-road traffic in their own names, and which characteristically could be expected already to have  secured significant “bank” (or other commercial funding sources) lines of credit.

Given these circumstances. the residual effect of what must have been remarkably successful commercial advocacy at the time for an alternative to BMC-84 filings (which even now provide egregiously minimal protection to a broker or freight forwarder’s own assets consequent to the prevalence of corresponding Draconian un-filed “Indemnity” or “Indemnification” agreements) is still reflected in the current (“as of October 1st, 2014”) language of paragraphs (1) through (5) of 49 CFR 387.307 (c) referenced in the previous paragraph hereof.  Accordingly, over the course of the past half century if a prospective broker wishing to draw on an established line of credit with their “bank” (or any other state licensed lender) also qualified to apply for a BMC-85 Filer Number as a “financial institution” within the current meaning of 49 CFR 387.307 (c), it was (and still would be now) pointless for such a federally registered “financial institution”, having (A) already loaned or advanced all or a portion of the statutory collateralization for a BMC-85 “Trust Fund” to an established client while acting as a “bank” (or any other state licensed lender), then (B) to actually cut a check for that requested amount, then (C) to take a picture of that check to show to any federal or state regulatory (or insurance brokerage industry) doubters, and only then (D) to “invest the funds” immediately tendered back to that same state regulated credit source (now acting as a federally authorized and regulated “Trustee”) in accordance with the “sole discretion” provisions of BMC-85 numbered paragraph 5.  More recently of course, letters of credit and pledged receivables (given that the qualification “without resort … to collection” of pledged receivables established by 49 USC 13906 (b) (1) (C) is rendered redundant by the fact that the entire purpose of UCC Article 9 is the “liquidation” of pledged receivables PRIOR to “collection”) have played a constructive role as well since 1980.

In other words, overly literal interpretations of the language of BMC-85 numbered paragraph 4 to the contrary, the primary consideration entailed in proper implementation of such security instruments would still devolve upon such a “Trustee’s” ability to ensure sufficient liquidity necessary (A) to “pay, up to a limit of” of the statutory security requirement all legitimate claims in a timely fashion, as well as (B) to refund all unexpended collateral to which any “Trustors” involved would be entitled following effective cancellation of BMC-85 filings with no claims pending.  As noted above in the “Areas of Agreement” section of these “Post-Event Comments”, when considered within the context of PFA’s own post-event “Comments” incorporated herein by reference in the “Areas of Disagreement in General” section hereof, the consideration that no actually verifiable pattern of BMC-85 providers failing to maintain sufficient liquidity necessary to pay virtually all legitimate claims on a timely basis exists has been demonstrated only recently by the fact that (following several years of state and federal regulatory and criminal investigations) the owner of Oasis Capital, once again the ONLY such BMC-85 “Trustee” to have been terminated for collateral related reasons over the course of the past five decades, was charged and convicted ONLY of violating that security instrument provider’s federally mandated fiduciary obligation to the “Trustors” involved. Hence the demonstrable continuing value of the Form BMC-85 “Trust Fund Agreement” to the shippers and motor carriers relying on such arrangements. 

THE NATURE OF THE FORM BMC-85 “TRUST FUND AGREEMENT”

Quite apart from the obvious consideration that frequently recorded statements by those roundtable participants objecting to virtually every aspect of such a security instrument’s characteristics and usages when issued by BMC-85 providers OTHER than state licensed “trust companies” within the current meaning of 49 CFR 387.307 (c) (2), to the effect that such purportedly “nonconforming” BMC-85 providers should have no legal right whatsoever to use the terms “Trust Fund”, “Trust”, and/or “Trustee” in conjunction with marketing, executing, filing, and administering such security instruments, sounds more than just a little bit silly when referring to federally mandated, drafted, and captioned “Form BMC-85 TRUST FUND Agreements” (emphasis supplied) routinely accepted for filing by the FMCSA on that basis.  Apparently, such unreasonably critical roundtable participants have failed to realize that they have been asking the FMCSA to turn the whole concept of “federal preemption” of state level regulatory arrangements affecting interstate commerce on its head.

 To reiterate, as an element of long established federal regulations still unchanged since 49 CFR Parts 300 to 399 were “Revised as of October 1, 2014”, the category “trust company” is only ONE of more than a dozen categories of state authorized and regulated “financial institutions” within the current meaning of 49 CFR 387.307 (c) eligible to apply for and (absent any derogatory information to the contrary) receive FMCSA “Filer” Account Numbers allowing them to act as FEDERALLY authorized and registered “Trustees” named on FEDERAL Form BMC-85 Trust Fund Agreements.  Hence the preemptive legal significance of the numbered paragraphs of that security instrument, which establish in exhaustive detail all the requisite elements of FEDERAL “Trust Fund” management authorization and procedures relevant only to FEDERAL statutory and regulatory imperatives when considered within the context of those aspects of interstate commerce material to the roundtable discussion at issue, to an extent which renders any corresponding state level “Trust Company” standards, practices, and usages in such regards not only redundant, but subject to the obvious consideration that any possible conflict between the two levels of regulatory authority must be resolved in favor of the former, pursuant to the Commerce Clause of the U.S. Constitution.     

Significantly, BMC-85 numbered paragraphs 1 through 11, excluding numbered paragraph 12 which pertains only to state level jurisdiction and venue (albeit only “to the extent not inconsistent with the rules and regulations of the FMCSA”), have no counterpart in the Form BMC-84 security instrument, since at all times material to such regulatory arrangements the “readily available funds” mandated for the payment of legitimate claims administered by a BMC-85 provider are those merely held in trust for any broker or freight forwarder involved (until expended or refunded eventually with no claims pending), while at all times material to such regulatory arrangements the “readily available funds” mandated for payment of legitimate claims administered by a BMC-84 provider are those incorporated in such a licensed insurance carrier’s state mandated reserves (albeit subject to reimbursement by any broker or freight forwarder involved).

That’s why, while sharing with the Form BMC-84 essentially the same set of recitals invoking 49 USC 13906 (b), and by inference subsection (c) as well, thereby expressed in the initial unnumbered paragraphs of both security instruments, the fundamental distinction between the two categories of FMCSA mandated forms is apparent through even the most cursory analysis of BMC-85 numbered paragraphs 1 through 11, introduced though the purely contractual preamble that “the trustor and trustee, to accomplish the above [purposes set forth in the recitals] agree as follows:”  More specifically:

BMC-85 numbered paragraphs 1 and 2 are essentially procedural in nature, and correspond closely to the text of and/or regulatory imperatives cited in the preceding recitals;

BMC-85 numbered paragraph 3 establishes both (A) the requirement that “said Trustee shall exclusively manage the security and trust fund” subject to such arrangements, and (B) expressly precludes commonality of “any interest, financial, proprietary, or otherwise, whatsoever” between Trustee and Trustor;

BMC-85 numbered paragraph 4 establishes the requirement that, as a matter of just such a judicially enforceable civil covenant between Trustor and Trustee established thereby, that “Trustee acknowledges the receipt of the sum of Seventy Five Thousand Dollars ($75,000) … to be held in trust under the terms and conditions set forth” therein, albeit (A) subject most recently to the express regulatory provisions established by 49 USC 13906 (b) (1) (C) to the effect that, if not accepted initially in cash, such a “sum” nevertheless must be tendered and maintained in the form of “… assets readily available to pay claims without resort to personal guarantees [as distinct from legitimate institutional guarantees such as bank letters of credit] or collection [as distinct from immediate liquidation upon assignment pursuant to UCC Article 9] of pledged accounts receivable”, as well as (B) subject for the past five decades to the express regulatory provisions of BMC-85 numbered paragraph 5;

BMC-85 numbered paragraph 5 establishes the requirement that, as a matter of just such a judicially enforceable civil covenant between Trustor and Trustee established thereby, “Trustee may, WITHIN ITS SOLE DISCRETION [emphasis supplied], invest the funds comprising the corpus of the trust fund consistent with its fiduciary obligation under applicable law”, such that the application of just such a “fiduciary obligation” requirement under FEDERAL (even if not concurrent state) regulation underlies the criminal restitution award in favor of the Trustors (and NOT any of the claimants) involved assessed post MAP-21 against the owner of BMC-85 provider Oasis Capital, as referenced in the “Areas of Disagreement in Particular” section hereof;

BMC-85 numbered paragraph 6 establishes the requirement that, even though each BMC-85 “Trustee shall pay, up to a limit of Seventy Five Thousand Dollars ($75,000) DIRECTLY to a shipper or motor carrier [and NOT to some court through an interpleader, a procedure all too characteristic of many BMC-84 initiated preemptive legal actions] any sum or sums which Trustee IN GOOD FAITH determines that the Trustor … would be HELD LEGALLY LIABLE [emphasis supplied], bearing in mind the obvious consideration that as employed in that context “directly”, “held legally liable”, and “in good faith” are well established terms of art intentionally restrictive of each BMC-85 Trustee’s options in such regards, absolutely NO such contractually determined limitations on a BMC-84 surety’s options in such regards are apparent in either the text of that security instrument itself, or any corresponding un-filed “Indemnity” or “Indemnification” agreements (constituting a BMC-84 provider’s almost always far less restrictive equivalent of BMC-85 numbered paragraphs 1 through 11) ever directed to the attention of TFS’s staff, consultants, or attorneys;

BMC-85 numbered paragraphs 7 through 9 which, as referenced in the second paragraph of the “Introduction” section hereof, have been characterized as establishing “the imprecise multi-stage process entailed in a BMC-85 provider’s mere submission of a “Notice of Cancellation” for a particular broker’s security instrument pursuant to certain provisions of 49 USC 13906 (b) (4)” such that, to quote from the 4th paragraph of TFS’s “Request for Immediate Suspension” discussed at the roundtable, in default of some informal accelerated procedure along the lines of that employed in 2014 “In the Matter of … Espinal Trucking”, MC-795000, for FUTURE “Requests” of that nature as well, financially stricken “… brokers not only (A) would be unlikely to comply within the thirty (30) day time-specific requirements of BMC-85 numbered paragraphs 7 and 8 … but also would be likely (B) to take advantage of the additional thirty (30) day notification period specified by numbered paragraph 9 thereof prior to effective suspension of subject broker’s registration thereby afforded in order to continue booking, dispatching, and billing shippers for movements they never even contemplated paying the motor carriers retained in that process for during the ensuing sixty (60) day “window” afforded through that full process”;

BMC-85 numbered paragraph 10 establishes the requirement that, with respect to “… sums due the Trustee as a result, directly or indirectly, of the administration of the trust fund under this agreement … in no event shall such sums be paid from the corpus of the trust fund” established thereby, a provision with absolutely no counterpart in the language of the Form BMC-84, as epitomized in the “Complaint in Interpleader” action filed by BMC-84 provider Great American Insurance Company AGAINST three (3) full caption heading pages of motor carrier (including collection agency and factoring company assignees) claimants, docketed as Case No. 2:14-CV-06952 in U.S. District Court for the Central District of California, during the course of which proceeding the entire “penalty of the bond” at issue certainly would have been consumed almost entirely by Great American’s attorney’s legal fees and court costs (had not TFS’s current transportation consultant directed the entire affair to the attention of veteran transportation attorney Hank Seaton whose law firm, Seaton & Husk, having previously been active in opposing such efforts prior to the $75,000 security requirement, personally contacted Great American’s counsel and reportedly secured an agreement to withdraw that complaint, in order to refile a modified version in another venue);  And,

BMC-85 numbered paragraph 11 establishes the requirement that “Trustee shall maintain a record of all financial transactions concerning the Fund, which will be available to Trustor upon request and reasonable notice and to the FMCSA upon request”, thereby constituting a “requirement” neither expressed nor implied in the language of the Form BMC-84 itself (whether or not provided for in the language of any corresponding un-filed “Indemnity” or “Indemnification” agreement between surety and principal for equivalent purposes).

CONCLUSION

Accordingly, by way of an instructive analogy based upon the distinctions between the two categories of transportation intermediary security instruments established and analyzed throughout the five previous sections of these “Post-Event Comments” on subject roundtable discussion laid out in what was intended to be a useful expository sequence above, it’s obvious that the distinction between BMC-84 Surety Bonds and BMC-85 Trust Fund Agreements is comparable to the distinction between criminal or traffic court “Bail Bonds”, issued by state authorized and regulated “bonding companies” and therefore analogous to BMC-84 filings, on the one hand, and “Cash Bonds”, tendered directly to the administrative staff of the courts involved and therefore analogous to BMC-85 filings, on the other hand,  To be sure, in the case of  BMC-85 filings the FMCSA has followed the lead established by the ICC in effectively “contracting out” such constructive “Cash Bond” arrangements to state authorized and regulated “financial institutions” within the current meaning of 49 CFR 387.307 (c), albeit obviously subject to the underlying fundamental legal interpretation that, pursuant to both (A) certain standard implications of common law in a general sense, and (B) the imputed intent of Congress in a specific sense, it then follows (C) that the FMCSA always has and continues to retain effective complete control over every aspect the “funds comprising the corpus of the trust fund” underlying each BMC-85 filing (to a degree obviating further rulemaking in that respect), and (D) that as whole the BMC-85 industry (with the sole exception of Oasis Capital) has yet to fail to live up to their collective responsibilities with respect to the National Transportation Policy in such regards.

RECOMMENDATIONS

Whereupon, predicated on the verifiable circumstances cited in the “Areas of Agreement” section of these “Post-Event Comments”, specifically “… the conspicuous inability of those same roundtable participants speaking in favor of BMC-84 insurance brokerage interests to actually cite, or otherwise demonstrate convincingly any statistically significant pattern of failure regarding any aspect whatsoever of the BMC-85 industry’s ability to pay legitimate claims asserted against that particular class of security instruments over the course of the past five decades”, when considered within the context of PFA’s own previously submitted post-event “Comments regarding FMCSA roundtable on May 20th, 2016”, a presentation stressing heavily certain unethical (if not downright criminal) motives imputed to such adverse parties, TFS hereby recommends that the FMCSA forgo as unnecessary any extensive re-regulation and enhanced direct regulatory supervision of transportation intermediary security arrangements not currently causing any significant problems.  Rather, TFS hereby recommends that the FMCSA follow up on my BMC-85 provider’s previously submitted recommendations regarding some immediate informal (and hardly staff time-intensive) regulatory implementation process for “Immediate Suspension” of the actual operating authority “Registration” of potentially disruptive financially stressed brokers (as identified through statements under oath submitted by such brokers’ security instrument providers) pursuant to 49 USC 13906 (b) (5).

AFFIRMATION

In witness whereof I, Marold Studesville, the undersigned CEO of Transport Financial Services named and acting on the date stated in the caption heading above, hereby swear and affirm that all material representations offered in support of these “Post-Event Comments” and included recommendations are true and complete to the best of my knowledge and belief’

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How can the Trucking Industry Bridge the Talent Gap?

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Avoid getting stiffed: New flag on brokers with bonds pending cancellation can be effective recon tool

In early November, FMCSA stood up what amounts to a new flag on brokers/forwarders and motor carriers whose surety bonds/insurance have been marked  for cancellation by the provider.

This example of a new surety notice of pending cancellation is in the FMCSA’s Licensing and Insurance public-facing page for a broker who notified its surety provider, Transport Financial Services, it was voluntarily ceasing business at the end of the year, says TFS President Marold Studesville. Brokers whose bonds have been cancelled after a run-up in claims, too, will be thus flagged, partially sealing a loophole that allowed dishonest brokers to conduct business with no intent to pay even as they went under — or were formed with no intent to pay to begin with.

“The goal is to help the public who does business with these regulated entities know that an insurance company or financial institution that made the initial filing has submitted a pending cancellation of the entity’s policy in our system,” say reps from FMCSA’s Licensing and Insurance division. “The notice will remain in place until either the effective date of the updated filing has occurred, or that the authority has been revoked, due to the failure to comply with the insurance requirements.”

Read the complete article here.

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Highway robbery: Combating dishonest brokers

Small fleet owner Scott Jordan once had something of a maxim he’d repeat about his business dealings. “In all the years I’ve been in business,” around seven years as an independent, he’d say, “I’ve never been screwed over by the broker or shipper, only the trucker.”

 

Last year, that changed in a big way on a load that Jordan booked for one of his owner-operators. Working with a sizable broker, he was led to believe the freight was something of a need-it-now item. Complications ensued, appointments for delivery were rescheduled repeatedly, and rate confirmations were updated to reflect the changes. After reaching an agreement to store the load for about a week, it turned into a $3,800 load, well over the initial rate.

Written by Todd Dills originally published here. Read the rest of the article.

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YOUR SHOPPING BAG