CTB Transportation Law & Regulatory Compliance 5 — Questions and Answers
Question 1: The Preventing Unfair Loading Practices rule under FMCSA regulations addresses which broker conduct?
- Brokers misrepresenting carrier insurance to shippers
- Brokers coercing drivers to violate hours-of-service rules to meet shipper deadlines (Correct answer)
- Brokers operating without a valid surety bond
- Brokers double-brokering loads without shipper consent
Correct answer: Brokers coercing drivers to violate hours-of-service rules to meet shipper deadlines
Anti-coercion rules prohibit brokers (and shippers) from pressuring drivers to violate federal safety regulations including hours-of-service limits.
Question 2: Under what circumstances does the Surface Transportation Board (STB) have jurisdiction over a freight broker dispute rather than the FMCSA?
- When the dispute involves rail intermodal movements (Correct answer)
- When the broker handles loads over 10,000 lbs
- When the shipper is a government entity
- The STB never has jurisdiction over broker disputes
Correct answer: When the dispute involves rail intermodal movements
The STB has jurisdiction over rail transportation economic matters, so intermodal disputes involving the rail portion may fall under STB rather than FMCSA jurisdiction.
Question 3: A carrier submits a freight bill 18 months after delivery. Under the standard limitations period for carrier claims against shippers, is this claim timely?
- Yes, brokers and carriers have up to 3 years to file freight bills
- No, the standard limitation for carrier undercharge claims is 18 months from delivery (Correct answer)
- Yes, because there is no statutory limit on freight bill collection
- No, the limit is 6 months under the Carmack Amendment
Correct answer: No, the standard limitation for carrier undercharge claims is 18 months from delivery
Under 49 U.S.C. § 14705, motor carriers have 18 months from delivery to file undercharge claims, making an 18-month-old bill at the deadline.
Question 4: Which exemption under 49 U.S.C. § 13506 allows certain agricultural commodities to move without standard broker licensing requirements?
- The fresh fruit and vegetable exemption for unprocessed agricultural products (Correct answer)
- The livestock exemption for all farm products
- The grain exemption for commodities traded on futures markets
- There are no agricultural exemptions from broker licensing
Correct answer: The fresh fruit and vegetable exemption for unprocessed agricultural products
Certain unprocessed agricultural commodities (fresh fruits and vegetables, livestock, etc.) have historically been exempt from some DOT economic regulations, though broker registration still generally applies.
Question 5: Under the Truth in Brokering provisions proposed under FMCSA rulemaking, brokers would be required to disclose what information to shippers?
- The broker's profit margin on each transaction
- Whether the broker has a contractual relationship with the carrier used (Correct answer)
- The carrier's full safety inspection history
- All prior cargo claims filed against the carrier
Correct answer: Whether the broker has a contractual relationship with the carrier used
Proposed truth-in-brokering rules focus on transparency about broker-carrier relationships and financial arrangements to prevent undisclosed conflicts of interest.
Question 6: Which legal concept determines whether a broker's failure to screen a carrier constitutes negligence when the carrier causes a highway accident injuring a third party?
- Strict liability for all broker-arranged shipments
- The foreseeability of harm from using an unqualified carrier (Correct answer)
- Respondeat superior, because the carrier is the broker's agent
- The economic loss rule, which bars tort recovery for property damage
Correct answer: The foreseeability of harm from using an unqualified carrier
Negligent entrustment/hiring claims against brokers turn on whether it was foreseeable that using a carrier with a poor safety record could result in harm.
Question 7: If a freight broker is acquired by a publicly traded holding company, which additional regulatory compliance obligation arises specific to the broker's operations?
- Sarbanes-Oxley Act internal controls over financial reporting for the brokerage segment (Correct answer)
- FMCSA approval of the ownership change within 30 days
- Mandatory renegotiation of all carrier contracts
- Immediate increase of the surety bond to $750,000
Correct answer: Sarbanes-Oxley Act internal controls over financial reporting for the brokerage segment
When a broker becomes part of a public company, Sarbanes-Oxley requirements for internal financial controls and public disclosure apply to its operations as part of the consolidated entity.
CTB Transportation Law & Regulatory Compliance 5
The Preventing Unfair Loading Practices rule under FMCSA regulations addresses which broker conduct?