General Jurisdiction Over Freight Forwarder Service

SUMMARY: This NPRM proposes changes to existing regulations regarding

the issuance of bills of lading by freight forwarders and also gives

notice of the FHWA's general jurisdiction over all segments of the

freight forwarding industry (not just household goods freight

forwarders), in accordance with the ICC Termination Act of 1995

(ICCTA), Public Law 104-88, 109 Stat. 803. Before the ICCTA became

effective on January 1, 1996, the former Interstate Commerce Commission

(ICC) had both general and licensing jurisdiction over household goods

freight forwarders only, because the non-household goods segment of the

freight forwarding industry had been substantially deregulated in 1985.

The ICCTA abolished the ICC and gave the Secretary of Transportation

(Secretary) general jurisdiction over all freight forwarder service,

requiring freight forwarders to register with the Secretary to provide

the transportation or service they seek to provide. The Secretary has

delegated this authority over all freight forwarder service to the

FHWA. This NPRM proposes to amend 49 CFR 373.201, which governs the

issuance of bills of lading by household goods freight forwarders, by

expanding its coverage to include the non-household goods segment of

the freight forwarder industry.

DATES: Comments should be received no later than March 31, 1997.

ADDRESSES: Written, signed comments should be sent to: Docket Clerk,

Attn.: FHWA Docket No. MC-96-43, Federal Highway Administration,

Department of Transportation, Room 4232, 400 Seventh Street, SW.,

Washington, D.C. 20590. Persons who require acknowledgment of the

receipt of their comments must enclose a stamped, self-addressed

postcard. Comments may be reviewed at the above address from 8:30 a.m.

through 3:30 p.m. Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: For information regarding rulemaking

and operational issues: Larry Minor, Office of Motor Carrier Research

and Standards, (202) 366-4012; and for information regarding legal

issues: Michael Falk, Office of the Chief Counsel, (202) 366-1384,

Federal Highway Administration, Department of Transportation, 400

Seventh Street, SW., Washington, D.C. 20590.

SUPPLEMENTARY INFORMATION: The FHWA has general jurisdiction over

freight forwarder service as mandated by Congress in section 103 of the

ICCTA. 49 U.S.C. 13531. The ICCTA abolished the Interstate Commerce

Commission (ICC), eliminated unnecessary ICC regulatory functions, and

transferred certain remaining functions to DOT. Prior to the ICC's

termination, however, it had general and licensing jurisdiction over

household goods freight forwarders only, pursuant to former 49 U.S.C.

10561 and 10923. The Surface Freight Forwarder Deregulation Act of

1986, Public Law 99-521, 100 Stat. 2993 (1986), enacted on October 22,

1986 (Deregulation Act) redefined and limited, for the most part, the

regulated forwarding industry to household goods freight forwarders.

The ICCTA, at 49 U.S.C. 13531, expands the jurisdiction of former

49 U.S.C. 10561 and gives the Secretary general jurisdiction over all

service that a freight forwarder undertakes or is authorized to

provide. The ICCTA also expands former 49 U.S.C. 10923 to require the

Secretary to register all freight forwarders for transportation or

service they seek to provide under 49 U.S.C. 13903. Under the ICCTA, at

49 U.S.C. 13901-13905, Congress established a registration system, to

replace the former ICC licensing system, requiring all for-hire motor

property and passenger carriers, property brokers, and freight

forwarders to register with the Secretary to provide such

transportation or service. Accordingly, these new registration

provisions of the ICCTA embrace both forwarders of non-household goods

and household goods.

The purpose of this document is to propose changes to existing

regulations to comport with statutory requirements, give notice of the

FHWA's general jurisdiction over all freight forwarders (not just

household goods freight forwarders), clarify the FHWA's jurisdiction

over freight forwarder service in other areas, and provide guidance to

freight forwarders about how to register with FHWA.

The only regulatory change proposed by FHWA in this document is the

revision of 49 CFR 373.201, entitled Bills of Lading for Freight

Forwarders, to include within its scope the non-household goods segment

of the freight forwarding industry. The proposed revision is consistent

with the FHWA's new statutory jurisdiction, as well as with the bill of

lading requirements imposed on all freight forwarders by 49 U.S.C.

14706(a)(2) and its predecessor provision 49 U.S.C. 11707(a). At this

time, no further amendments or changes are deemed necessary to the

former ICC regulations involving freight forwarders [aside from the

amendments that will be made in separate FHWA rulemaking proceedings

involving registration, insurance, and designation of process agent

requirements] to make them consistent with the provisions of the ICCTA.

Background

Currently, there are approximately 817 active surface freight

forwarders on file at the FHWA. The term ``freight forwarder'' means a

person holding itself out to the general public to provide

transportation of property for compensation and in the ordinary course

of its business--(A) assembles and consolidates, or provides for

assembling and consolidating, shipments and performs or provides for

break-bulk and distribution operations of the shipments; (B) assumes

responsibility for the transportation from the place of receipt to the

place of destination; and (C) uses for any part of the transportation a

carrier subject to jurisdiction under section 103 of the ICCTA, part B

of subtitle IV of title 49, U.S.C. The term, however, does not include

a person using transportation of an air carrier. 49 U.S.C. 13102(8). A

freight forwarder is also not a pipeline, rail, motor, or water

carrier.

Freight forwarders were initially regulated by the ICC in 1942, and

remained subject to virtually the same regulatory requirements until

1986. The ICC regulated surface freight forwarders in five major areas:

Entry, ratemaking, insurance and liability matters, ownership and

control, and Federal-State relations. Congress believed that these

regulatory constraints prevented freight forwarders from responding

efficiently and competitively to changing market conditions, especially

when their competitors and the underlying transportation modes they use

had been substantially deregulated. These concerns resulted in the

enactment of the Deregulation Act.

The Surface Freight Forwarder Deregulation Act of 1986

This legislation substantially deregulated the general commodities

segment of the surface freight

[[Page 4097]]

forwarding industry, but did not deregulate freight forwarders that

dealt with household goods. In 1986, the year the Deregulation Act was

passed, there were approximately 660 surface freight forwarders

operating in the United States (590 non-household goods freight

forwarders and 70 household goods freight forwarders).

Most of the regulatory constraints placed on general commodity

freight forwarders, such as ICC entry and rate regulation, antitrust

immunity for collective ratemaking activities, and the prohibition

against the ownership of a rail, motor, or water carrier were removed

by the Deregulation Act. The Deregulation Act also added a new

subsection (g) to former 49 U.S.C. 11501 (49 U.S.C. 14501 under the

ICCTA), that precluded a State from enacting or enforcing any law or

regulation relating to the interstate rates, routes, or services of any

general commodity freight forwarder.

The Deregulation Act retained Federal regulation over all surface

freight forwarders with respect to cargo liability and claims

settlement procedures. The provisions of the so-called Carmack

amendment at former 49 U.S.C. 11707(a) remained unchanged following the

Deregulation Act and applied to all freight forwarders to ensure that

they were responsible for any loss or damage to the cargo they handle.

Pursuant to the legislative action taken in the Deregulation Act,

the ICC instituted a rulemaking proceeding and made minor revisions in

the Code of Federal Regulations to exclude all freight forwarders,

except household goods freight forwarders, from the scope of most ICC

rules. Regulation of Household Goods Freight Forwarders Under the

Surface Freight Forwarder Deregulation Act of 1986, 3 I.C.C. 2d 162

(1986) (Ex Parte No. MC-184). Congress subsequently passed additional

legislation to further ease entry, rate, and tariff requirements on

motor carriers and household goods freight forwarders. Such legislation

included the Negotiated Rates Act of 1993 (Pub. L. 103-180, 107 Stat.

2044) enacted to handle the on-going undercharge crisis, and the

Trucking Industry Regulatory Reform Act of 1994 (TIRRA) (Pub. L. 103-

311, Title II, 108 Stat. 1683) which eliminated tariff filing

requirements for individually determined rates.

After the Deregulation Act's effective date of December 21, 1986,

non-household goods freight forwarders no longer had to apply for

licensing authority from the ICC. From 1987 to 1994, the ICC granted,

on the average, approximately 100 permits to household goods freight

forwarders during any given fiscal year. Prior to the ICC's termination

in 1995, the ICC regulated approximately 720 household goods freight

forwarders.

The ICC Termination Act of 1995

As noted above, 49 U.S.C. 13531 provides the Secretary with general

jurisdiction over freight forwarder service. Section 13531 is derived

from the provisions of former 49 U.S.C. 10561, which extended

jurisdiction to freight forwarders of household goods only. Section

13531 extends this jurisdiction to include all segments of the surface

freight forwarding industry.

Under the ICCTA, former 49 U.S.C. 10923, which authorized the ICC

to license household goods freight forwarders, was repealed and a new

provision, 49 U.S.C. 13903, was enacted requiring that all freight

forwarders, not just household goods freight forwarders, register with

the Secretary. Accordingly, the registration process is a prerequisite

under the ICCTA to operate as a freight forwarder. Registration will

require a showing that registrants are ``fit, willing, and able'' to

provide service, and meet insurance, safety fitness, and other

requirements. If a freight forwarder desires to operate as a carrier

for the entire move, the freight forwarder must also be registered as a

carrier. 49 U.S.C. 13902. Rules implementing the FHWA's freight

forwarder registration process, including the required insurance and

security needed under the ICCTA, will be promulgated in other

proceedings.

The legislative history indicates that these changes were made

because Congress believed that all freight forwarders act as carriers

in the assembling and delivery of shipments, and both forwarders of

non-household goods and household goods should be subject to the

registration requirements to ensure that they are fit to operate and

are insured. However, Congress was clear that, aside from the

registration requirement, it did not intend to impose additional

regulatory requirements on non-household goods freight forwarders. ICC

Sunset Act of 1995, S. Rep. No. 176, 104th Cong., 1st sess. 42 and 45

(1995).

Presumably this registration-only approach to the forwarding of

non-household goods was taken so as not to frustrate the congressional

goal of the Deregulation Act to reduce the regulatory burden on the

non-household goods segment of the motor carrier industry. By requiring

all freight forwarders to register, however, the FHWA will be permitted

to implement the new statutorily mandated registration system

consistently and fairly among all segments of the freight forwarding

industry.

Accordingly, the FHWA advises all non-household goods freight

forwarders, including those that previously held ICC authority mooted

by the Deregulation Act or those previously issued ICC authority

restricted to forwarding household goods, that they are required to

register with the FHWA in order to operate in interstate commerce.

Until the FHWA adopts regulations to replace the old licensing

system that was previously administered by the ICC, the FHWA has been

processing registration requests submitted by freight forwarders

generally under the licensing regulations at 49 CFR Part 365 and using

ICC application forms with minimal revisions to reflect the ICCTA's

jurisdictional changes. The FHWA's processing approach to the ICCTA's

new registration requirement is consistent with section 204 of the

ICCTA, Savings Provisions, which provides that all legal documents of

the ICC that were issued or granted by an official authorized to effect

such document shall continue in effect beyond the transfer of any

function from the ICC to DOT. See Continuation of the Effectiveness of

Interstate Commerce Commission Legal Documents, 61 FR 14372 (April 1,

1996), where the FHWA has adopted all ICC regulations, decisions, and

orders until such time as changes are warranted. Accordingly, the FHWA

will continue to process registration requests in the manner noted

above until the FHWA implements appropriate changes to conform with the

registration system established by Congress on January 1, 1996.

Persons requesting applications and seeking information about the

registration process should direct their inquiries to the Office of

Motor Carriers Licensing and Insurance Staff, Federal Highway

Administration, 400 Virginia Avenue SW., Suite 600, Washington, DC

20024, telephone (202) 358-7046.

Applications which include registration fees should be sent to

FHWA/OMC/HIA30, P.O. Box 100147, Atlanta, GA 30384-0147. Applications

sent via express mail only should be addressed to FHWA/OMC/HIA30, c/o

Nations Bank Wholesale, Lockbox # 100147, 6000 Feldwood Road, 3rd Floor

East, College Park, GA 30349, Attn: Linda Thomas. Ms. Thomas' telephone

number is 707-774-6443.

Proposed Amendments

As noted above, pursuant to congressional action taken in the

Deregulation Act of 1986, most of the prior regulatory constraints

placed on general commodity freight forwarders

[[Page 4098]]

were removed. In response to that legislation, the former ICC

instituted its Ex Parte No. MC-184 proceeding noted above, to adopt

ministerial revisions excluding all freight forwarders, except

household goods freight forwarders, from the scope of most of its

regulations. In that proceeding it was stated that 49 CFR Parts 1005

and 1081 [the latter now redesignated as 49 CFR Part 373, subpart B]

would not be revised to exclude general commodity freight forwarders

from their scope because:

They relate to some extent to the Carmack liability provisions

that are retained under 49 U.S.C. 11707 for all freight forwarders.

Part 1005 sets forth procedures that regulated carriers and freight

forwarders must follow in investigating cargo loss and damage

claims, although the actual settlement of claims by carriers under

these rules is voluntary. Part [373] sets forth requirements that

freight forwarders must follow in issuing bills of lading. The

Carmack amendment requires all carriers and freight forwarders to

issue bills of lading for property they receive, 49 U.S.C.

Sec. 11707(a)(1), and is central to its liability provisions.

Accordingly, we will separately consider what changes, if any,

should be made to Parts 1005 and [373] to comport with the

legislation in the near future. 3 I.C.C. 2d 162 at 166 (1986).

In 1989, the ICC issued a notice of proposed rulemaking in Ex Parte

No. 55 (Sub-No. 73), Practice and Procedure--Miscellaneous Amendments--

Revisions (not printed) served October 10, 1989, and published on

October 11, 1989, in the Federal Register (54 FR 41643) (Revisions).

Revisions to 24 parts of title 49, Code of Federal Regulations,

including Part 373, were proposed. The ICC stated that this action was

taken to streamline and update its regulations, and make the rules more

understandable and easier to use. The ICC also stated that because most

of the revisions involved editing to remove obsolete, unnecessary, or

redundant material from regulations, the required changes would not be

detailed in that proceeding.

The appendix to the notice of proposed rulemaking in Revisions

shows that the proposed change to Part 373, subpart B involved removing

non-household goods freight forwarders from its scope, thus requiring

only household goods freight forwarders to issue bills of lading.

Although some of the more significant changes were discussed in the

proposed rulemaking, that notice lacks any discussion of why the ICC

proposed amendments to Part 373, subpart B. The final rule is also

silent as to why non-household goods freight forwarders were excluded

from the scope of Part 373, subpart B. Practice and Procedure--Misc.

Amendments--Revisions, 6 I.C.C.2d 587 (1990).

Because Part 373, subpart B existed prior to the ICCTA, the FHWA is

now reviewing this provision in light of 49 U.S.C. 13531, which

provides the Secretary with general jurisdiction over all freight

forwarder service. As noted above, Part 373 relates to the Carmack

liability provisions that are retained under 49 U.S.C. 14706 of the

ICCTA (former 49 U.S.C. 11707). Section 11707 stated that all motor

carriers and freight forwarders subject to the Secretary's jurisdiction

shall issue a receipt or bill of lading for property received for

transportation. In spite of this requirement, following the ICC's 1990

decision in Revisions, the ICC's regulations governing the issuance of

receipts and bills of lading applied to motor carriers and household

goods freight forwarders, but not to non-household goods freight

forwarders. We cannot speculate as to why the ICC removed non-household

goods freight forwarders from 49 CFR 373.201 in apparent contradiction

to that agency's recognition, in its Ex Parte No. MC-184 proceeding,

that the Deregulation Act did not alter the Carmack amendment's

liability and bill of lading requirements with respect to freight

forwarders.

It is clear from the statutory provision at 49 U.S.C. 14706 that

freight forwarders are still required to issue receipts or bills of

lading for property they transport. A receipt and bill of lading are

not synonymous. A bill of lading is the more inclusive document. The

bill of lading is a receipt for the property, a contract of carriage,

and documentary evidence of title to the property.

As a receipt for the goods, the bill of lading recites the place

and date of shipment, describes the goods, their quantity, weight,

dimensions, identification marks, condition, etc., and sometimes their

quality and value. As a contract, the bill names the contracting

parties, specifies the rate or charge for transportation, and sets

forth the agreement and stipulations with respect to the limitations of

the carrier's common-law liability in the case of loss or injury to the

goods and other obligations assumed by the parties or to matters agreed

upon between them. That part of the bill which constitutes a receipt

may be treated as distinct from the part incorporating the contractual

terms. Bills of Lading, 52 I.C.C. 671, citing Porter, Law of Bills of

Lading, section 14.

The bill of lading provisions were implemented in order for the

parties to make a prima facie case against carriers and freight

forwarders under the Carmack Amendment. A bill of lading provides

evidence that goods were delivered to the carrier or freight forwarder

in good condition prior to shipment, or that cargo on arrival was in

damaged condition. If goods are damaged, the freight bill or bill of

lading can specify the monetary loss to cargo resulting from such

damage.

In the past, the former ICC prescribed the proper form and contents

of receipts and bills of lading to be issued by common carriers of

property and freight forwarders in compliance with the statute to

ensure that they convey necessary and essential information.

Potential Impact/Cost of Proposed Rule

The law has long required that all carriers and freight forwarders

shall issue receipts or bills of lading covering freight received for

transportation. A bill of lading is a document that lies at the heart

of every transportation transaction. It is a receipt for the

merchandise and a contract to transport and deliver the merchandise.

Thus, a bill of lading is a bilateral agreement where both sides make

guarantees. Shippers agree to tender certain freight, and carriers and

freight forwarders agree to price and service options. Presumably most,

if not all, freight forwarders have been issuing bills of lading in the

normal course of doing business.

By including non-household goods freight forwarders within its

scope, the revised rule will help to ensure that all parties to a

transaction are aware of their shipping arrangement, as well as the

condition of the cargo at the time it is tendered to a motor carrier

for line-haul transportation. The rule change will benefit both freight

forwarders and their customers alike because it could limit loss and

damage claims. Moreover, no freight forwarder will be put at an

competitive disadvantage. The proposed rule change will provide all

freight forwarders and their customers with actual knowledge of their

transportation transaction. It will also avoid uncertainty over which

freight forwarders are required to issue receipts or bills of lading

for property they accept for transportion in interstate commerce.

The FHWA anticipates that this revision will have no substantial

economic impact on the non-household goods freight forwarder industry

as a whole, the public, or on a substantial number of small entities.

The proposed revision merely includes the non-household goods freight

forwarder segment of the industry within the scope of the bill of

lading provisions. The household goods freight forwarding

[[Page 4099]]

segment of the industry is already subject to this requirement.

To the extent that the non-household goods segment of the

forwarding industry will now be required to comply with 49 CFR Part

373, the FHWA does not anticipate that the burden, total time, effort

or financial resources expended will be substantial. As noted above, in

1986, there were 590 non-household goods freight forwarders and 70

household goods freight forwarders, a ratio of 8.4 to 1. Nine years

later, In 1995, there were approximately 720 household goods freight

forwarders. Assuming the same 8.4 to 1 ratio holds today, there would

be over 6,048 non-household goods freight forwarders that would be

affected by the proposed revision of 49 CFR Part 373.

The proposed amendment to 49 CFR Part 373 will require all freight

forwarders to issue receipts and bills of lading for property they

transport in interstate commerce, a requirement which has been in

effect by statute since 1942 and by regulation until 1990.

Consequently, it is likely that all freight forwarders have already

been issuing such documents in the normal course of doing business.

Consequently, the FHWA does not believe that the rule change proposed

in this proceeding will have an annual effect on the non-household

goods segment of the forwarding industry of $100 million or more, lead

to a major increase in costs or prices, or have a significant adverse

effect on any sector of the economy. This minor rule change will not

per se add to a freight forwarders'' cost of doing business since it

merely reflects what is required of forwarders by their customers.

Accordingly, the FHWA does not believe that this action will create an

unnecessary regulatory burden on the non-household goods segment of the

freight forwarding industry. The FHWA merely intends to update its

regulations to achieve consistency with pre-existing statutory

requirements.

The FHWA seeks comments of all interested parties on the following

questions: (1) What is the estimated total annual burden and frequency

of issuing receipts and bills of lading for the non-household goods

segment of the forwarding industry? (2) Will the proposed rule change

in 49 CFR 373.201 create significant impacts or costs to the non-

household goods segment of the forwarding industry? Why, or why not?

Other Comments

Currently, 49 CFR Part 1005 governs the processing of claims for

loss, damage, injury, or delay to cargo handled by freight forwarders.

As noted above, Part 1005 relates to the Carmack liability provisions

that are retained under new 49 U.S.C. 14706 for all freight forwarders.

This part will eventually be redesignated and incorporated into Chapter

III of Title 49 of the Code of Federal Regulations. There is no need to

revise Part 1005 at this time, but the FHWA believes it is necessary to

further notify all freight forwarders that the previous law pertaining

to the procedures to follow in investigating loss and damage claims at

Part 1005 is continued until such time as changes are warranted. As

previously noted, until the FHWA amends its regulations, section 204 of

the ICCTA, Saving Provisions, provides that all rules and regulations

of the ICC shall continue in effect.

Other Matters

We are further notifying the public that new chapter 145 of title

49, U.S.C., (Federal-State Relations) preserves Federal authority over

intrastate transportation. New section 49 U.S.C. 14501(b) [formerly 49

U.S.C. 11501(g)] incorporates existing prohibitions against intrastate

regulation of freight forwarders by States, and, for the first time,

treats freight forwarders and transportation brokers the same.

Subsection (c) of section 14501 also includes freight forwarders, for

the first time, with motor carriers of property with respect to

preemption of intrastate regulation over trucking prices, routes, and

services. The ICCTA, however, did not preserve the ICC's prior

authority to prescribe intrastate rates for household goods freight

forwarders [formerly 49 U.S.C. 11501(a)(1) and (2)], nor did it affect

Hawaii's right to regulate motor carriers operating within the State of

Hawaii (49 U.S.C. 14501(b)(2)).

While most Federal preemption under chapter 145 is retained,

government regulation is also narrowed in several respects. For

example, State and local governments are able to regulate freight

forwarders of property with respect to motor vehicle safety, financial

responsibility, and other State standard transportation practices if

compliance is no more burdensome than compliance under Federal law. 49

U.S.C. 14501(c)(2) and (3). These exemptions, however, do not apply to

the transportation of household goods. 49 U.S.C. 14501(c)(2)(B).

Additionally, there is an election provision included in the ICCTA. If

a freight forwarder of property is affiliated with a direct air carrier

through common control, it has the right to elect being subject to the

jurisdiction of a State or local government. 49 U.S.C. 14501(c)(3)(C).

Thus, the ICCTA further reduces government oversight of the surface

freight forwarding industry by allowing the States to set

transportation standards, or by giving the carrier alternatives to

being subject to State jurisdiction.

Notwithstanding the expansion of registration jurisdiction, the

ICCTA continues to promote the deregulation theme of the past years

over the non-household goods segment of the motor carrier industry.

Here, the FHWA has merely attempted to review its regulations

applicable to freight forwarders to determine whether any changes are

warranted in order to conform to the ICCTA. We are also trying to

ensure that all freight forwarders are aware that they are now subject

to the jurisdiction of the FHWA for registration purposes. The FHWA

invites comments in this proceeding, specifically addressing

jurisdictional and regulatory issues.

Rulemaking Analyses and Notices

All comments received before the close of business on the comment

closing date indicated above will be considered and will be available

for examination in FHWA Docket No. MC-96-43 at the above address.

Comments received after the comment closing date will be filed in FHWA

Docket No. MC-96-43 and will be considered to the extent practicable,

but the FHWA may issue a final rule at any time after the close of the

comment period. In addition to late comments, the FHWA will also

continue to file, in the docket, relevant information that becomes

available after the comment closing date, and interested persons should

continue to examine the docket for new material.

Executive Order 12866 (Regulatory Planning and Review) and DOT

Regulatory Policies and Procedures

The FHWA has determined that this action is not a significant

regulatory action within the meaning of Executive Order 12866 or within

the meaning of the Department of Transportation's regulatory policies

and procedures. It is anticipated that the economic impact of this

rulemaking will be minimal; therefore, a full regulatory evaluation is

not required. This rule, if adopted, merely includes non-household

goods freight forwarders within the scope of the FHWA bill of lading

regulations. This action will ensure that all parties to a

transportation transaction are aware of their shipping arrangement.

Moreover, the rule change will benefit both freight forwarders and

their customers alike because it could limit loss and damage claims,

and provide them with actual knowledge of their transportation

transaction. The FHWA

[[Page 4100]]

has evaluated the economic impact of the proposed changes on the non-

household goods freight forwarding segment of the industry and has

determined that the proporsal is reasonable, appropriate, and not per

se costly to this segment of the industry. The FHWA believes that non-

household goods freight forwarders issue some type of document similar

to bills of lading already. Nevertheless, comments, information, and

data are solicited on the economic impact of the potential change to 49

CFR Part 373.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354,

5 U.S.C. 601-612), the FHWA has evaluated the effects of this rule on

small entities and has preliminarily determined that this regulatory

action will not have a significant economic impact on a substantial

number of small entities. Small entities that rely on forwarder service

will benefit by including the non-household goods forwarder segment of

the industry within the scope of Part 373. This action will ensure that

all forwarders issue receipts or bills of lading covering forwarder

traffic for which the forwarder assumes full responsibility.

The FHWA does not expect that this action will have a significant

impact on the non-household goods freight forwarding segment of the

industry because they have traditionally been required by Federal law

to issue receipts and bills of lading. This provision merely

reestablishes the consistency between regulatory and statutory

requirements which existed prior to 1990. Moreover, most non-household

freight forwarders, regardless of their size, presumably comply with

the statutory provisions that require them to issue receipts and bill

of lading. This is because the forwarder is the transportation company

upon whom responsibility is placed for issuance of a receipt or bill of

lading and for any loss, damage, or injury to the property caused by it

or by any motor carrier, railroad, or other transportation company to

which such property may be delivered or over whose lines such property

may pass. Accordingly, requiring all freight forwarders to issue a

receipt or bill of lading will not significantly impact the industry

because their issuance will preserve the relations between the

forwarder and its customers once the regulations are promulgated.

Executive Order 12612 (Federalism Assessment)

This action has been analyzed in accordance with the principles and

criteria contained in Executive Order 12612, and it has been

preliminarily determined that this proposal would not have sufficient

federalism implications to warrant the preparation of a federalism

assessment.

While most Federal preemption over State regulation of freight

forwarders is retained under the ICCTA, it is also narrowed in several

instances. The ICCTA encouraged State cooperation in the enforcement of

motor carrier registration and financial responsibility as a condition

of Motor Carrier Safety Assistance Program (MCSAP) funding. Any

additional costs or burdens that the FHWA may impose upon the States

because of this type of narrowed preemption would be generated from the

requirement that the States and local governments are able to regulate

freight forwarders with respect to motor vehicle safety, financial

responsibility, registration requirements, and other State standard

transportation practices if compliance is no more burdensome than

compliance under Federal law. The FHWA does not expect that this action

of expanding the FHWA's regulations to include the non-household goods

freight forwarder segment will infringe upon the State's ability to

discharge traditional State governmental functions. Interstate

commerce, which is the subject of these regulations regarding

interstate operations, has traditionally been governed by Federal laws.

The FHWA does not expect that it would require the States to adopt

these rules once the regulations are promulgated.

Executive Order 12372 (Intergovernmental Review)

Catalog of Federal Domestic Assistance Program Number 20.217, Motor

Carrier Safety. The regulations implementing Executive Order 12372

regarding intergovernmental consultation on Federal programs and

activities do not apply to this program.

Paperwork Reduction Act

The FHWA is proposing to require all freight forwarders to issue

receipts and bills of lading for the property they transport in

interstate commerce. The FHWA believes that the majority of freight

forwarders now issue receipts and bills of lading in the normal course

of their activities. The FHWA further believes that the disclosure of

this information by freight forwarders to shippers and carriers is a

usual and customary practice within the industry. The public,

forwarders, and their customers alike benefit by the disclosure of this

information because it can limit loss and damage claims. Moreover, the

rule change will assist all freight forwarders and their customers by

helping to ensure that they receive actual knowledge of their

transportation transaction. The FHWA requests that the public comment

on the accuracy of the paperwork burden estimate.

National Environmental Policy Act

The agency has analyzed this action for the purpose of the National

Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and has

determined that this action would not have any effect on the quality of

the environment.

Regulation Identification Number

A regulation identification number (RIN) is assigned to each

regulatory action listed in the Unified Agenda of Federal Regulations.

The Regulatory Information Service Center publishes the Unified Agenda

in April and October of each year. The RIN number contained in the

heading of this document can be used to cross reference this action

with the Unified Agenda.

List of Subjects in 49 CFR Part 373

Bills of lading, Highway safety, Highways and roads, Motor

carriers.

Issued on: January 17, 1997.

Rodney E. Slater,

Federal Highway Administrator.

For the reasons set forth above, FHWA proposes to amend title 49,

Code of Federal Regulations, Chapter III, as follows:

1. The authority citation for part 373 continues to read as

follows:

Authority: 49 U.S.C. 13301 and 14706; 49 CFR 1.48.

2. Section 373.201 is revised to read as follows:

Sec. 373.201 Receipts and bills of lading for freight forwarders.

Every freight forwarder shall issue the shipper a receipt or

through bill of lading, covering transportation from origin to ultimate

destination, on each shipment for which it arranges transportation in

interstate commerce. Where a motor common carrier receives freight at

the origin and issues a receipt therefor on its form with a notation

showing the freight forwarder's name, the freight forwarder, upon

receiving the shipment at the ``on line'' or consolidating station,

shall issue a through bill of lading on its form as of

[[Page 4101]]

the date the carrier receives the shipment.

[FR Doc. 97-1882 Filed 1-27-97; 8:45 am]

BILLING CODE 4910-22-P