CTB Transportation Law & Regulatory Compliance 3 — Questions and Answers
Question 1: Under the Interstate Commerce Commission Termination Act (ICCTA) of 1995, economic regulation of motor carriers was largely transferred to which body?
- Surface Transportation Board (STB) (Correct answer)
- Federal Motor Carrier Safety Administration (FMCSA)
- Department of Transportation (DOT)
- Federal Trade Commission (FTC)
Correct answer: Surface Transportation Board (STB)
The ICCTA transferred remaining economic regulation of surface transportation from the ICC to the newly created Surface Transportation Board.
Question 2: What does 'double brokering' mean in freight brokerage, and what is its primary legal concern?
- Using two carriers to transport one load, which is always legal
- A broker re-brokering a load to another broker without shipper consent, creating liability gaps (Correct answer)
- A carrier subcontracting to another carrier with shipper approval
- Operating as both a broker and carrier simultaneously on the same load
Correct answer: A broker re-brokering a load to another broker without shipper consent, creating liability gaps
Double brokering occurs when a broker illegally re-brokers a load to another broker without shipper knowledge, creating confusion over liability and often associated with fraud.
Question 3: The Staggers Rail Act of 1980 is relevant to multimodal freight brokers primarily because it:
- Deregulated rail rates, allowing negotiated contracts that brokers can leverage in intermodal shipments (Correct answer)
- Required all rail shipments to go through licensed brokers
- Set maximum rail freight rates that brokers must quote
- Merged rail and truck regulatory oversight under a single agency
Correct answer: Deregulated rail rates, allowing negotiated contracts that brokers can leverage in intermodal shipments
The Staggers Act deregulated railroad pricing, enabling confidential contracts and competitive rates that benefit intermodal brokerage arrangements.
Question 4: A broker's written transportation contract with a shipper contains a clause limiting carrier liability below Carmack Amendment defaults. For this clause to be enforceable, what is required?
- Only the broker's signature is needed
- Signed agreement by both shipper and carrier with a reduced rate offered in exchange (Correct answer)
- Federal court approval
- FMCSA pre-approval of the liability limitation
Correct answer: Signed agreement by both shipper and carrier with a reduced rate offered in exchange
Carmack Amendment liability limitations require a signed written agreement between shipper and carrier, with a lower freight rate offered as consideration for the reduced liability.
Question 5: Under 49 CFR Part 376 (Lease and Interchange of Vehicles), which scenario is directly regulated?
- A broker leasing office space from a carrier
- A motor carrier leasing equipment from an owner-operator (Correct answer)
- A shipper leasing a dedicated fleet from a broker
- A broker subleasing carrier contracts to other brokers
Correct answer: A motor carrier leasing equipment from an owner-operator
49 CFR Part 376 governs the lease of commercial motor vehicles between motor carriers and independent owner-operators, establishing required lease terms.
Question 6: Which legal doctrine can make a broker vicariously liable for a carrier's negligent acts even though the carrier is an independent contractor?
- Respondeat superior (only applies to employees)
- Negligent hiring/selection theory (Correct answer)
- The business judgment rule
- Assumption of risk doctrine
Correct answer: Negligent hiring/selection theory
Courts have held brokers liable under negligent hiring theory when they fail to properly vet a carrier's safety record before tendering a load.
Question 7: The Uniform Commercial Code (UCC) Article 7 governs which aspect particularly relevant to freight brokers?
- Broker licensing requirements
- Bills of lading and warehouse receipts as documents of title (Correct answer)
- Carrier insurance minimums
- Electronic logging device standards
Correct answer: Bills of lading and warehouse receipts as documents of title
UCC Article 7 covers documents of title including bills of lading, which are the primary shipping documents that brokers work with daily.
CTB Transportation Law & Regulatory Compliance 3
Under the Interstate Commerce Commission Termination Act (ICCTA) of 1995, economic regulation of motor carriers was largely transferred to which body?