CTB Transportation Law & Regulatory Compliance 2 — Questions and Answers
Question 1: Under 49 CFR Part 371, a freight broker must provide shippers with the carrier's actual charges upon request within how many days after the shipment?
- 30 days
- 15 days (Correct answer)
- 7 days
- 60 days
Correct answer: 15 days
Brokers must provide actual carrier charges to shippers within 15 days of a written request under 49 CFR Part 371.
Question 2: Which federal agency has primary authority to enforce household goods moving regulations under the SAFETEA-LU Act?
- Federal Motor Carrier Safety Administration (FMCSA) (Correct answer)
- Surface Transportation Board (STB)
- Federal Highway Administration (FHWA)
- Department of Commerce
Correct answer: Federal Motor Carrier Safety Administration (FMCSA)
The FMCSA holds primary enforcement authority over household goods movers and brokers under SAFETEA-LU provisions.
Question 3: A broker arranges transport for a shipment and the carrier causes cargo damage. Under the Carmack Amendment, who bears primary liability to the shipper?
- The broker, jointly with the carrier
- The carrier that physically transported the goods (Correct answer)
- The broker alone, as the contracting party
- The shipper's insurance company
Correct answer: The carrier that physically transported the goods
Under the Carmack Amendment, the carrier that physically transports the goods bears primary liability for cargo loss or damage.
Question 4: What is the purpose of the Truth in Lending Act as it may apply to freight broker credit agreements with carriers?
- It requires brokers to disclose interest rates and credit terms in writing (Correct answer)
- It sets maximum interest rates brokers can charge carriers
- It prohibits brokers from extending credit to carriers
- It mandates brokers maintain a credit line with banks
Correct answer: It requires brokers to disclose interest rates and credit terms in writing
The Truth in Lending Act requires clear written disclosure of interest rates and credit terms in any credit arrangement.
Question 5: Under 49 U.S.C. § 13904, a broker's operating authority (license) may be suspended or revoked if the broker fails to maintain which required financial instrument?
- Commercial general liability insurance
- A surety bond or trust fund of at least $75,000 (Correct answer)
- Workers' compensation insurance
- Errors and omissions insurance
Correct answer: A surety bond or trust fund of at least $75,000
FMCSA may revoke broker authority if the required $75,000 surety bond (BMC-84) or trust fund (BMC-85) lapses.
Question 6: A broker contracts with an unlicensed motor carrier to move freight. If cargo is damaged, what additional legal exposure does the broker face beyond contract liability?
- Criminal penalties only
- Potential liability as a carrier under the Carmack Amendment (Correct answer)
- No additional exposure beyond contract terms
- Automatic loss of broker's surety bond
Correct answer: Potential liability as a carrier under the Carmack Amendment
Brokers who arrange transport with unauthorized carriers may be deemed to have acted as a carrier themselves, triggering Carmack Amendment liability.
Question 7: Which provision of MAP-21 (Moving Ahead for Progress in the 21st Century Act) directly impacted freight brokers' financial requirements?
- Increased the minimum broker surety bond from $10,000 to $75,000 (Correct answer)
- Required brokers to carry $1 million in cargo insurance
- Mandated electronic logging for all broker transactions
- Eliminated the trust fund option for broker financial security
Correct answer: Increased the minimum broker surety bond from $10,000 to $75,000
MAP-21, enacted in 2012, raised the required broker surety bond from $10,000 to $75,000 to better protect shippers and carriers.
CTB Transportation Law & Regulatory Compliance 2
Under 49 CFR Part 371, a freight broker must provide shippers with the carrier's actual charges upon request within how many days after the shipment?