[Federal Register Volume 62, Number 18 (Tuesday, January 28, 1997)]
[Proposed Rules]
[Pages 4096-4101]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1882]



[[Page 4095]]

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Part II





Department of Transportation





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Federal Highway Administration



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49 CFR Part 373



General Jurisdiction Over Freight Forwarder Service; Proposed Rule

  Federal Register / Vol. 62, No. 18 / Tuesday, January 28, 1997 / 
Proposed Rules  

[[Page 4096]]



DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Part 373

[FHWA Docket No. MC-96-43]
RIN 2125-AE00


General Jurisdiction Over Freight Forwarder Service

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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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