Waynes World - June 2008
VEHICLE MILEAGE TAX STUDIED, MORE BENEFITS
OF HAVING AN APU, ROADCHECK 2008, AND...
BEING CAREFUL WHEN
DEALING WITH BROKERS
by Wayne Schooling
BEING CAREFUL WITH BROKERS. Oak Harbor Freight Lines recently brought a lawsuit against Sears Roebuck & Co. (shipper) and National Logistics Corp. (broker) to recover nearly half a million dollars for the transportation of Sears’ freight. Pursuant to the industry standard bills of lading, Sears was held liable directly to the freight carrier for unpaid shipping costs even though the majority of the costs had already been paid by Sears to the broker. The court ruled that the Carrier contract between the motor carrier and the broker did not constitute a waiver or alter Sears’ liability of lading, that the Carrier contract was not the sole lawful contract concerning payment obligations, and Equitable Estoppel (a legal term) did not bar the freight carrier from collecting the freight charges directly from Sears. Further, the court did not abuse its discretion in setting a date for the accrual of pre-judgment interest or by applying the rate set by state law rather than the federal rate. The court made the ruling because of the way all of the paperwork had been transacted between all parties in this specific case. Once the broker failed to pay Oak Harbor, Sears became liable for paying the motor carrier – even though Sears had already paid the broker. If you have to deal with brokers, then be smart and make sure they are one of the 27 approved companies of the Transportation Intermediaries Association (TIA). The TIA (www.tianet.org) has a program that guarantees up to $100,000 in payments to their motor carrier customers.
STOPPING DISTANCE RULE REVISED. A rule mandating a reduction in stopping distances for heavy-duty trucks is rumored to be coming this month. The anticipated revision of the Federal Motor Vehicle Safety Standard 121 is expected to shorten stopping distances for heavy-duty trucks by 20 to 30%. Today, most tractors stop in 255 to 292 feet. The 30% target cannot be met with 15” x 4” drums on steer axles. To meet the stopping distance cut to 248’ for tractors would require 16-1/2” x 7” front drums and 8-5/8” wide rears. If a 75 mph requirement is added, trucks will need front air disc brakes.
VEHICLE MILEAGE TAX STUDIED. With the traditional method of funding new highways and maintaining existing roadways, the National Highway Trust Fund is on the verge of going broke. Congress has been looking for new ways to tax motorists without increasing the federal gas tax, which has been 18.4 cents a gallon since 1993. Diesel fuel is taxed at a rate of 24.4 cents a gallon. With automobiles getting better fuel efficiency, the cost of road building and repairing rising astronomically and inflation taking a bite out of the tax dollar, the feds predict that the Highway Trust Fund will go into the red in 2012. So, a congressional study commission gave the state of Oregon a chance to see if a Vehicle Mileage Tax (VMT) fee is workable. After all, people pay their electric and water bills based on use, so now transportation officials wonder if a road tax can be based on use. To find out, Oregon DOT decided to conduct a real-world VMT test that included 285 volunteer vehicles, 299 motorists and two service stations in Portland. Heavy-duty trucks were not a part of this pilot project, but the VMT tax could easily be tailored to accommodate the inclusion of heavy-duty trucks. A mileage reader was installed inside each vehicle which recorded the miles-traveled data, which was then read wirelessly at a fuel station. The reader attached to a 64-year-old Portland, OR resident volunteer kept a precise accounting of how many miles he drove and where, as well as what time of day he was on the road. It recorded mileage for every trip to the grocery store, health club, neighborhood public school, and even to the family’s rental property. The commission specifically recommended that the United States transition to a VMT fee by 2025. Until then, the commission recommended increasing the current federal gas taxes up to 40 cents a gallon (a suggestion that seems to lack substantial political support in Congress because of the already high prices of fuel).
KANSAS LAB STOPS TESTING. Physicians Reference Laboratory of Overland Park, KS has withdrawn from the U.S. Department of Health & Human Services (HHS) as an authorized lab to test truck and bus drivers for illegal drugs. Motor carriers and others subject to the U.S. DOT’s drug testing rules in 49 CFR Part 40 must only use testing labs that appear on the HHS list of federally-approved labs. Motor carriers should protect themselves and make sure that they are using a Nationally Accredited Substance Abuse Program to avoid problems like these.
MORE BENEFITS OF AN APU. Auxiliary power units (APUs), initially pushed by federal and state governments to reduce air pollution despite concerns over their initial costs, are attracting more buyers who purchase them for the fuel savings, now that diesel is over $4.00 a gallon. Drivers who idle less than one hour a day have reported saving $100 a month in fuel, while drivers who idle 7 or more hours in 24 have said they save more than $1,000 every month. In California, legislation that became effective on 1/1/08 now requires heavy-duty trucks to be equipped with an automatic engine shut-off device that limits idling to 5 minutes, and APUs on trucks manufactured in 2007 or later must either be equipped with diesel particulate filters or have their exhaust plumbed into the truck engine’s diesel particulate filter. Be sure to be extra careful in the city of Sacramento, CA where if caught idling longer than 5 minutes you can be fined up to $25,000!
ROADCHECK TIME AGAIN. Roadcheck 2008, an annual 72-hour truck and bus inspection blitz, will be held June 3-5. Inspectors will be out in force along the highways performing thousands of truck, bus and driver inspections. Last year’s 3-day inspection event recorded the highest driver out-of-service rate since 1999. Of the truck drivers inspected, 6.2% of them were placed out-of-service while only 3.8% of the bus drivers were placed OOS. Almost 22% of the inspected vehicles were placed out-of-service. For a majority of those vehicles, brakes were the problem. So be on the lookout, and make sure that you (and your truck) are doing everything legal and correct - especially on June 3-5!
~ NTA remains a name you can trust. Our website (www.ntassoc.com) is your official U.S. DOT Internet Training Site and we are administrators of a Nationally Accredited Drug and Alcohol Program. If you have any questions, call me at (562) 279-0557 or send me an e-mail to wayne@ntassoc.com. Until next month, “Drive Safe – Drive Smart!”