Transportation industry braces for potential changes in delivery contracts

Transportation industry braces for potential changes in delivery contracts

aTruckPoster_contentChanges within the transportation industry can be costly and their effects are often unpredictable. A transportation lawyer in Illinois understands this is doubly true when those changes are catalyzed by an outside source.

When government regulators are responsible, carriers have no choice but to follow along or shut their doors.A new wave of regulations are being hotly contested, and one important rule on the federal drawing board would change the way shippers and carriers interact to create contracts.

About the rule

The rule concerns the relationship between drivers and shippers. As it currently stands, shippers or consignees can tell truckers or carriers when they need a load delivered, even if it falls within a very narrow window of time. The carrier must accept that delivery window or risk losing business.  Under the new regulations, rule-makers feel that shippers or consignees could be guilty of coercing drivers to violate federal safety standards in order to stay within expected delivery times. These standards largely focus on service hour overages, which are designed to keep overly tired drivers off the roads.

According to the Journal of Commerce, those found violating this driver-coercion rule would be fined up to $11,000 per incident and may face revocation of their operating authority. This would apply to all carriers, freight brokers and forwarders. Although the rule has not yet been decided, the JOC reports that the rule-making was mandated by Congress in the most recent highway bill. It would extend the regulatory authority of the Federal Motor Carrier Safety Administration to include brokers, shippers and forwarders in addition to their current job of overseeing motor carriers who contract with drivers or operate trucks.

Anticipated effects of the rule

Industry experts warn that the effects of the rule could be widespread and costly for both carriers and shippers. In lieu of the traditional way trucking industry contracts are drawn up and used, this rule would require a much more individualized approach to each contract and supply chain processes would require significant changes.

With the new regulation in place, carriers would be required to verify that drivers have the hours available to move their freight almost immediately. Many within the industry fear that this requirement could create an employer-employee relationship between drivers and brokers, which undermines the very nature of the existing relationship and opens receivers, shippers and transportation intermediators up to lawsuits. A transportation lawyer in Illinois understands that this liability could cost these businesses significant amounts of money each year just in legal defense.

With the looming changes in contracts business relationships within the industry, businesses should do all they can to understand the new regulations and prepare for their implementation. Businesses owners should contact a transportation lawyer in Illinois to learn more about their legal responsibilities as soon as possible.

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