FMCSA’s Anne S. Ferro about the Moving Industry – Exclusive Interview

Each year millions of Americans relocate. In fact a recent survey of the U.S. Census Bureau reported an increase in the movers rate from the record low 11.6 percent in the year of 2011 to 12 percent in the year of 2012. Actually, for the last year 36.5 million people moved in the USA. And, besides the increase in the movers rate, another milestone for the Moving Industry took place – July, 2012, President Obama signed into law a new two year transportation re-authorization bill, the Moving Ahead for Progress in the 21st Century Act (“MAP-21”) that took effect October 1, 2012.

The MAp-21 law gives credit to the FMCSA to order the return of household goods held hostage which seems to be one of the most common reason for consumer complaints according to the Chairman John Rockefeller’s report. So, as we are engaged to always provide you with news from the Moving Industry and in-depth advice on moving related issues, this time we asked FMCSA Administrator Anne S. Ferro about the licensing, the regulations, and the safety standards for moving companies. Ms Ferro also shares some insightful advice on how we can protect from rogue movers and experience a smooth move.

M. Irwin: What criteria do you employ to evaluate applicants? What are the exact standards that each applicant has to meet before obtaining the proper license?

Anne S. Ferro: The Federal Motor Carrier Safety Administration (FMCSA) conducts a rigorous screening and vetting process of all for-hire household goods (HHGs) and passenger carriers applying for authority to operate. By statute, motor carriers seeking operating authority registration must demonstrate that they are fit, willing and able to comply with applicable regulations (49 USC 13902). The process requires that FMCSA conduct an extensive check of Agency and external data in order to determine whether the carrier may be attempting to reincarnate as a new carrier in order to evade a past history of safety or consumer protection regulatory violations. FMCSA published a notice of policy in the Federal Register on August 2 clarifying the Agency’s “fit, willing and able” standard (77 FR 46147).

M. Irwin: How many companies were registered for the year 2011, and how many household carriers have received license for 2012?

Anne S. Ferro: In (CY) 2011, FMCSA had a total of 5,052 active household goods carriers registered. FMCSA has granted applications for 836 HHG motor carriers in CY 2012. The database continues to fluctuate because of carriers leaving the industry for a variety of reasons, with the current total of carriers holding active household goods authority being approximately 4,500.

M. Irwin: What are the most common carriers’ violations?

Anne S. Ferro: The most common violations cited during FMCSA compliance reviews in (CY) 2011 include:

• 49 CFR 375.401(g) – Failing to ensure a company representative and/or shipper sign the estimate of charges.
• 49 CFR 375.519(a) – Failing to obtain weight tickets for shipments weighed.
• 49 CFR 375.213(b)(1) – Failing to provide the required shipper information.
• 49 CFR 392.9a(a) – Unauthorized Transportation (Operating Authority).
• 49 USC 13702 – Charging a rate not contained in the tariff.

M. Irwin: What are the respective fines and punishments?

Anne S. Ferro: Penalties Associated with Moving Fraud Violations

49 USC 14901

• In general – If a carrier fails or refuses to comply with any regulations issued by the Secretary [of Transportation] or the [Surface Transportation] Board relating to protection of individual shippers, the carrier, receiver, or trustee is liable for a civil penalty of not less than $1,000 for each day the violation continues (49 U.S.C. 14901(d)(1)).
• Estimate of Broker without Carrier Agreement – If a broker provides an estimate of the cost of transporting household goods without entering into an agreement with the carrier that will provide the transportation; the broker is liable for a civil penalty of not less than $10,000 for each violation (49 U.S.C. 14901(d)(2)).
• Unauthorized Transportation – If a motor carrier or broker provides transportation or services for household goods without registration, such person (business) is liable for a civil penalty of not less than $25,000 (49 U.S.C. 14901(d)(3)).
• Violation relating to Transportation of Household Goods – Any person that knowingly engages in or knowingly authorizes an agent or person to: 1) falsify documents used in the transportation of household goods; or 2) charge for accessorial services which were not performed; is liable for a civil penalty of not less than $2,000 for each violation and not less than $5,000 for each subsequent violation (49 U.S.C. 14901(e)).
• In determining and negotiating the amount of most civil penalties FMCSA assesses for HHG violations, the degree of culpability, history of prior conduct, the degree of harm to the shipper or shippers, ability to pay, the effect on ability to do business, whether the shipper has been adequately compensated before institution of the proceeding, and such other matters as fairness may require shall be taken into account (49 USC 14901(c)).

49 USC 14915

• Hostage Load – Whoever is found holding a household goods shipment hostage is liable for a civil penalty of not less than $10,000 for each violation (49 U.S.C. 14915(a)(1)).

Suspension of Operating Authority Registration

In situations where an authorized household goods carrier is found to have held HHG hostage, the Agency may suspend the carrier’s operating authority registration for a period of 12 to 36 months (49 U.S.C. 14915(a)(3)).

M. Irwin: How many licenses were revoked for the year 2011, and how many licenses have been revoked for the year 2012? What were the reasons for the license revocation?

Anne S. Ferro: In CY 2011, FMCSA revoked or suspended the operating authority registration of 1,206 Household good carriers. In CY 2012, FMCSA revoked or suspended 723 licenses of HHG Brokers, Motor Carriers, and Freight Forwarders. A majority of these revocations or suspensions were for failing to maintain the proper amount of insurance.

M. Irwin: Two months ago Chairman John Rockefeller released a Committee report and brought up the question about the moving brokers’ practices that create the conditions for bad moving experiences. How does the Federal Motor Carrier Safety Administration regulate moving brokers?

We are strategically using our resources to try to catch companies that intentionally do harm to innocent people and damage the industry at large. Our vetting program (implemented in 2009) reviews applications from household goods motor carriers, brokers, and freight forwarders before granting them operating authority. The vetting process is an in-depth investigation of the applicant to determine if it is a reincarnated carrier, broker, or freight forwarder, or has affiliations with unsafe or non-compliant entities. We have also expanded our efforts and established guidance and procedures to revoke/suspend the operating authority of motor carriers and brokers that continually violate the safety and/or consumer protection regulations. For more information on FMCSA’s regulation of HHG brokers, please refer to 49 CFR Part 371, Subpart B (HHG brokers) and 49 CFR Part 371, Subpart A (all brokers).

FMCSA regulates moving brokers through its HHG Broker Rule codified at 49 CFR Part 371, Subpart B. Brokers are required to provide their MC (Motor Carrier) numbers on their ads and Internet websites, broker only for carriers that have valid HHG operating authority from FMCSA, provide federal consumer protection information to shippers and maintain written agreements with carriers before providing written estimates on behalf of those carriers. In addition:

• HHG Brokers are required to have a $25,000 surety bond or trust fund on file with FMCSA as well. This amount increases to $75,000 beginning October 1,2013, thanks to changes enacted by Congress in the Moving Ahead for Progress in the 21st Century Act (MAP-21), the 2012 surface transportation reauthorization law.
• HHG brokers also need to obtain and maintain valid operating authority from FMCSA in order to broker the transportation of HHG.

M. Irwin: With the MAP-21 Law you plan to raise the safety standards in the moving and transportation industry. What are the key rules and regulations you will implement?

Anne S. Ferro: The MAP-21 legislation includes new consumer protections for HHG shippers and MAP-21 includes new authority for FMCSA to order the return of household goods held hostage. Specifically, it provides FMCSA with the discretion to award to the affected consumer all or a portion of a civil penalty collected from fines against a HHG moving company holding a hostage load. Additionally, it allows FMCSA to negotiate civil penalties with movers. These new authorities became effective on October 1,2012.

Beginning October 2014, FMCSA is expected to have a new rule in place to require interstate HHG moving companies to pass a proficiency exam that demonstrates their knowledge and intent to comply with federal consumer protection laws as a condition of receiving DOT operating authority.

M. Irwin: What are key steps that everyone has to undertake in order to move safely according to you?

Anne S. Ferro: Consumers need to become informed of their rights and responsibilities as consumers. Every consumer should check the FMCSA Protect Your Move website. FMCSA has prepared tools that consumers can use to help choose a responsible moving company. These tools can be found on the Protect Your Move website.

Information is power when it comes to planning a move, and we strongly encourage all consumers to learn about their rights and responsibilities before signing any moving contracts with HHG or Broker companies. Every consumer should review key tips and tools that will help them choose a responsible moving company.

Protect Your Move is the place to go to:

• Make sure a mover is registered with the federal government to offer interstate moving services.
• Check the company’s complaint history.
• Understand your rights and responsibilities as a consumer.
• And find our helpful checklist on precautions consumers should take before hiring a moving company, including how to research the company’s consumer complaint history and on-road safety performance records.

FMCSA has created great, easy to use checklist to help consumers protect their move. If consumers have complaints, we ask them to call our Consumer Complaint Hotline at 1-888-DOT-SAFT and report it immediately. Consumers are also encouraged to visit the U.S. Department of Transportation Inspector General’s “Wanted Fugitives” website.