You are getting this month’s Bits and Pieces a bit early. I am in the mountains in Vermont this week and want this out and done so that I can enjoy the time off. Vacation is better than work.  But alas, work goes on and we must continue to pay attention to all that come up in the industry.

News this month:

CVSA ROADSCHECK - The Commercial Vehicle Safety Alliance has reported that that out-of-service rates for commercial motor vehicles did not change much from last year.  This year there were more mobile roadside inspections, with a focus on North American Standard (NAS) Level I inspection, safety belt enforcement, and motor coach inspections, with more than 65,327 truck and bus inspections.  The vehicle compliance rate was 80 percent and driver compliance was 95.6 percent.  NAS Level I inspections compliance rate was 76.7 percent for vehicles and 96.3 percent for drivers.  Hazardous materials inspections showed a vehicle compliance rate of 83.7 percent, and driver compliance rate of 97.5 percent. There were 26,605 CVSA decals issued to vehicles that passed the inspection.

HOURS OF SERVICE RULES - The Federal Motor Carrier Safety Administration has released its first draft of a new Hours of Service rule, one month earlier than required by the settlement of the lawsuit brought against the current rules. The DOT will complete its review and send the proposed rule making to the OMB. The OMB has 90 days to review the proposal before it is scheduled to be published November 4 for the public comment period, which will end Jan. 4, 2011.

ANTI INDEMNITY STATUTES -Louisiana has signed into law a statute which prohibits indemnification clause in motor carrier and construction contracts.  A second statute was put into place which will revoke hazmat and tank endorsements after a second offense for reckless operations.

CANADIAN MOTOR CARRIERS - Effective August 2, 2010, the FMCSA has issued rulemaking that Canadian motor carriers are no longer required to be insured with U.S. based insurers.  Carriers only need to utilize insurance carriers licensed to issue policies in the province or territory where the motor carrier is based.

FOOD SAFETY - The FDA is seeking comments on proposed sanitary transportation practices. A copy of the request for comments can be viewed here and I recommend you take a look and provide this information to your claims department. It provides a chart on all of the FDA regulations addressing the transportation of food products.  The statute defining adulterated products includes products transported in violation of any regulation so these new rules could become a big issue for claims handlers.

This started out as a very quiet month in the industry.  Most of us are focusing on summer and allowing things to quiet down. Then we got to the end of the month and there were a few very significant events which should not slip quietly by.  So before you head to the beach we report the following:

DEMISE OF THE BMC-32 ENDORSEMENT - To the surprise of many in the insurance and transportation industry the FMCSA has decided to do away with mandatory financial responsibility for cargo insurance for many carriers - the BMC-32 endorsement is going away.  The FMCSA has issued its final rule, effective March, 2011, that certain motor carriers operating in interstate commerce will no longer be required to have an endorsement in place in order to operate.  The shipping industry was directed by the FMCSA to protect itself by insuring that the carriers with whom they did business are adequately insured.  Household goods carriers and household good freight forwarders will continue to be subject to the filing requirement.  It is currently unknown what effect the existing filings will have, and whether insurers will be required to cancel all filings and remove the endorsement from existing policies.  We will certainly keep you posted as we learn more about this significant development. A copy of the final rulemaking can be viewed here.

SUPREME COURT CARGO DECISION - The issue of whether an inland carrier can reap the benefits of an international through bills of lading has been the subject of tremendous litigation over the years.  In a rare case, the Supreme Court of the United States has issued an opinion on the issue, putting to rest many of the questions.  In the particular case decided by the high court, the shipment moved under a through bill of lading which required that suit against the parties be commenced in a foreign jurisdiction.  The court rejected the plaintiff’s position that the Carmack Amendment applied to the inland transportation and that the foreign selection clause was a violation of the rights and remedies afforded under Carmack.  This decision has serious consequences for shippers and carriers as it would appear that forum selection clauses, and clauses extending limitations of liability to inland carriers will not be subject to attack any longer. It is interesting that the dissent to this opinion was led by the newest Justice, Sonya Sotomayor.  As you may recall Justice Sotomayor hails from the 2nd Circuit here in New York. The Second Circuit was the court which led the attack on these clauses under the Carmack Amendment. You can read the whole decision here (Kawaski Kisen Kaisha v. Regal Beloit).