For years, carriers have been reincarnating themselves under new names in an attempt to escape out-of-service orders, penalties, shut downs, and terrible safety records, presenting a dangerous atmosphere to shippers, customers, and everyone on, and off, the road. But the Federal Motor Carrier Safety Administration is hoping to crack down on just that with a new revision set to take effect this May.
A Growing Problem
Chameleon carriers are becoming a serious problem in the transportation industry. A recent study conducted by the GAO found that in 2010, 1,136 new applicants were attributed as chameleon carriers, increasing by 377 since 2005, with 94% being freight carriers. 1
Take, for example, last December, when Devasko Dewayne Lewis was charged as being a chameleon carrier. Lewis operated Lewis Trucking Company, which was issued an out-of-service order in 2008 as an imminent safety hazard. Lewis formed a new trucking company, DDL Transport LLC, which was also put out-of-service in September 2011. When asked whether he had any interaction with another carrier in the past, Lewis stated that he had not, failing to mention Lewis Trucking Company. Lewis was indicted on federal charges for “making a false statement and seven counts of continuing operation after imposition of an out-of-service order.” 2
In the six year span, (2005 through 2010), the GAO reported an increased number of crashes among chameleon carriers compared to non-chameleon attributed carriers.
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According to the GAO, “chameleon attributes were three times more likely than all other new applicant carriers to later be involved in a severe crash. 1 In fact, according to the report, 18% of those new applicants with chameleon attributes during 2005-2010 were involved in serious crashes compared to 6% of those with non-chameleon attributes.
So what’s being done to prevent these chameleon carriers from operating? Let’s take a look at the FMCSA’s revision process.
The Revision
In 2004, the FMCSA’s proposal stated that “Payment waives respondent's opportunity to further contest the claim, and will result in the notice of claim becoming the final agency
order,” which was then revised in 2005. 3
However in a 2010 case, the FMCSA explained that by allowing a respondent’s proceedings to become terminated if they paid their penalty in full went against the FMCSA’s enforcement policy, “which requires that the Agency assess the maximum statutory penalty for each violation of law by any person who is found to have committed a pattern of violations of critical or acute regulations issued to carry out such a law or to have previously committed the same or related violation of critical or acute regulations issued to carry out such a law.” 3
In response, the FMCSA stated last December that it would revise the “rules of practice for motor carrier, intermodal equipment provider, broker, freight forwarder, and hazardous materials proceedings,” holding several comment sessions. 3
Last week, the FMCSA acknowledged that it needed to “monitor the safety performance history of carriers who `reincarnate' as a new carrier when faced with enforcement action in order to focus Agency enforcement efforts,” and thus, preventing them from the ability to evade accountability, establishing procedures that would become effective May 29th, 2012. 3
The revisions are as follows (Provided by http://www.regulations.gov/#!documentDetail;D=FMCSA-2011-0259-0010):
-“The Agency clarifies that paying the full proposed civil penalty in an enforcement proceeding, either in response to a Notice of Claim or later in the proceeding does not allow respondents to unilaterally avoid an admission of liability for the violations charged.”
-“The Agency establishes procedures for issuing out-of-service orders to motor carriers, intermodal equipment providers, brokers, and freight forwarders it determines are reincarnations of other entities with a history of failing to comply with statutory or regulatory requirements; these procedures will provide for an administrative review before the out-of-service order takes effect.”
-“The Agency establishes a process for consolidating Agency records of reincarnated companies with their predecessor entities.”
What do you think of the FMCSA’s revisions? How do you feel chameleon carriers should dealt with?
Road Scholar Transport promotes the operation of only safe and qualified carriers on the road, that’s why we are giving you five ways in which you can help reduce the risk of hiring chameleon carriers:
-Research a carrier’s CSA (Comprehensive Safety Analysis) scores. This can be done by going to the FMCSA website (www.fmcsa.dot.gov) and clicking on Safety & Security, Company Safety Record, Safety Fitness Electronic Records System, Company Snapshot, and then entering the carrier’s DOT number, MC number, or name. By clicking on SMS Results, you will gain valuable information regarding the number of out-of-services and accidents a carrier had as well as citations, helping you choose a safe carrier.
-Receiving daily updated authority/insurance data from carriers through products such as CarrierWatch.
-Research the company’s background. How long have they been in business? Conducting business with a company who has been operating in the industry for several years and is well-established can help you avoid choosing carriers that are constantly re-incarnating themselves under new names to avoid penalties/out-of-service orders.
-Check the chameleon carrier database. CarrierWatch grants you the ability to view a list of trucking companies whose operating authority has been revoked.
-Ask around. Why not go directly to the source of who has experience using a particular carrier? Referrals are a powerful tool in receiving insider information about a carrier’s reputation.
What measures are you taking to reduce the risk of hiring chameleon carriers? Post your responses at http://gsfn.us/t/2tte9.
1 http://www.gao.gov/assets/590/589530.pdf
2 http://www.truckinginfo.com/safety-compliance/news-detail.asp?news_id=75616&news_category_id=12
3 http://www.regulations.gov/#!documentDetail;D=FMCSA-2011-0259-0010
