Registration of Brokers and Freight Forwarders of Non-Household Goods, 50115-50117 [E6-14064]

Download as PDF Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Notices E. The development of highway bridges and structures that will withstand natural disasters; F. The documentation and wide dissemination of objective evaluations of the performance and benefits of these innovative designs, materials, and construction methods; G. The effective transfer of resulting information and technology; and, H. The development of improved methods to detect bridge scour and economical bridge foundation designs that will withstand bridge scour. Additional activities include collection of project information, documentation, promotion and wide dissemination of objective evaluations of the performance and benefits of these innovative designs, materials, and construction methods resulting from the project studies. Respondents: 50 State Departments of Transportation, the District of Columbia and Puerto Rico. Frequency: Annual. Estimated Average Burden per Response: 1 hour. Estimated Total Annual Burden Hours: It is estimated that a total of 100 responses will be received to give us a total annual burden of 100 hours. Electronic Access: Internet users may access all comments received by the U.S. DOT Dockets, Room PL–401, by using the universal resource locator (URL): http://dms.dot.gov, 24 hours each day, 365 days each year. Please follow the instructions online for more information and help. Authority: The Paperwork Reduction Act of 1995; 44 U.S.C. Chapter 35, as amended; and 49 CFR 1.48. Issued on: August 18, 2006. James R. Kabel, Chief, Management Programs and Analysis Division. [FR Doc. E6–14068 Filed 8–23–06; 8:45 am] Federal-aid bridge construction and bridge rehabilitation projects as required by 23 U.S.C. 144(r). DATES: This action is effective August 24, 2006. ADDRESSES: The report will be posted on the FHWA Web site at: http:// www.fhwa.dot.gov/bridge/britab.htm. FOR FURTHER INFORMATION CONTACT: Ms. Ann Shemaka, Office of Bridge Technology, HIBT–30, (202) 366–2997, or Mr. Thomas Everett, Office of Bridge Technology, HIBT–30, (202) 366–4675, Federal Highway Administration, 400 Seventh St., SW., Washington, DC 20590. Office hours are from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except Federal holidays. SUPPLEMENTARY INFORMATION: On August 17, 2006, at 71 FR 47558, the FHWA issued a notice announcing the availability of a report describing construction materials used in new Federal-aid bridge construction and bridge rehabilitation projects as required by 23 U.S.C. 144(r). The address section of that notice inadvertently referenced an incorrect Web address to access the report. The purpose of this notice is to correct the Web address for the Annual Materials Report on New Bridge Construction and Rehabilitation. The correct Web address for the report is: http://www.fhwa.dot.gov/bridge/ britab.htm. (Authority: 23 U.S.C. 144(r); Sec. 1114(f), Pub. L. 109–59, 119 Stat. 1144.) Issued on: August 21, 2006. Frederick G. Wright, Jr., Federal Highway Executive Director. [FR Doc. E6–14070 Filed 8–23–06; 8:45 am] BILLING CODE 4910–22–P DEPARTMENT OF TRANSPORTATION BILLING CODE 4910–22–P Federal Motor Carrier Safety Administration DEPARTMENT OF TRANSPORTATION Registration of Brokers and Freight Forwarders of Non-Household Goods Federal Motor Carrier Safety Administration (FMCSA), United States Department of Transportation (DOT). ACTION: Notice of determination. AGENCY: Federal Highway Administration Annual Materials Report on New Bridge Construction and Bridge Rehabilitation Federal Highway Administration (FHWA), DOT. ACTION: Notice; correction. rmajette on PROD1PC67 with NOTICES1 AGENCY: SUMMARY: This document corrects a typographical error in the FHWA’s notice published on August 17, 2006, at 71 FR 47558. The notice announced the availability of a report describing construction materials used in new VerDate Aug<31>2005 15:15 Aug 23, 2006 Jkt 208001 SUMMARY: Section 4142 of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA–LU), which was enacted into law August 10, 2005, authorizes the Secretary of Transportation (Secretary) to register brokers and freight forwarders of nonhousehold goods (otherwise known as general commodities brokers and freight forwarders) if the Secretary finds that PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 50115 such registration is needed for the protection of shippers. FMCSA, which has been delegated authority to exercise the Secretary’s functions and activities regarding broker and freight forwarder registration, is making a finding that registration of brokers and freight forwarders of non-household goods is needed for the protection of shippers. Accordingly, the Agency will continue to register all general commodities brokers and freight forwarders subject to its jurisdiction. FOR FURTHER INFORMATION CONTACT: Mr. Michael J. Falk, Office of Chief Counsel, 202–366–0834; Federal Motor Carrier Safety Administration, U.S. Department of Transportation, 400 Seventh Street, SW., Washington, DC 20590–0001. SUPPLEMENTARY INFORMATION: Background FMCSA’s jurisdiction over interstate property brokers is conferred by 49 U.S.C. 13501, which gives the Secretary jurisdiction ‘‘over transportation by motor carrier and the procurement of that transportation’’ to the extent the transportation is in interstate or foreign commerce. FMCSA’s jurisdiction over interstate freight forwarders is conferred by 49 U.S.C. 13531, which gives the Secretary jurisdiction ‘‘over service that a freight forwarder undertakes to provide, or is authorized or required under [Part B of subtitile IV of title 49, United States Code] to provide’’ to the extent the transportation involved is in interstate commerce. Brokers and freight forwarders are transportation intermediaries who procure the services of motor carriers to transport property. Brokers generally do not handle the freight and do not assume legal liability for cargo loss and damage. On behalf of shippers, they arrange for motor carriers to transport individual shipments from origin to destination. Freight forwarders assemble small shipments into larger shipments, tender them to motor carriers and ensure that the larger shipment is disassembled into smaller shipments upon delivery. Freight forwarders may take physical possession of the shipment in carrying out these functions.1 Freight forwarders issue bills of lading and assume liability for cargo loss and damage. Brokers arranging for transportation of property in interstate commerce were first regulated by the Interstate Commerce Commission (ICC) in 1935; interstate freight forwarders were regulated beginning in 1942. These 1 The statutory definitions of broker and freight forwarder are codified at 49 U.S.C. 13102(2) and 13102(8), respectively. E:\FR\FM\24AUN1.SGM 24AUN1 rmajette on PROD1PC67 with NOTICES1 50116 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Notices entities were required to obtain operating authority from the ICC and meet financial responsibility and other regulatory requirements. The Surface Freight Forwarder Deregulation Act of 1986, Pub. L. 99–521, deregulated general commodities freight forwarders by removing them from ICC licensing jurisdiction. The 1986 Act was intended to ‘‘enable freight forwarders which deal with general commodities to compete more effectively with other transportation services and to improve the financial health of the freight forwarding industry’’.2 The 1986 Act retained ICC jurisdiction over household goods freight forwarders. The ICC Termination Act (ICCTA) of 1995, Pub. L. 104–88, reinstated Federal jurisdiction over general commodities freight forwarders and required all freight forwarders to register with DOT. The Senate report accompanying the legislation noted that since the 1986 Act, freight forwarders of shipments other than household goods were not required to obtain a license from the ICC, but were required to maintain a minimum level of cargo liability insurance. The Senate report also stated that the ‘‘insurance requirement has been difficult to monitor and enforce without a Federal licensing requirement. By extending the registration requirement to all freight forwarders, the bill would fill an inappropriate regulatory gap.’’ 3 The ICCTA continued the licensing (registration) and bond requirements for general commodities brokers, which, according to the Senate report, were ‘‘needed to protect the public from unscrupulous brokers.’’ 4 The Motor Carrier Safety Improvement Act of 1999 (MCSIA), Pub. L. 106–159, created FMCSA and, among other things, conferred on it jurisdiction over brokers and freight forwarders. Prior to SAFETEA–LU, 49 U.S.C. 13903 and 13904 required FMCSA to register all freight forwarders and brokers, provided the prospective registrant was ‘‘fit, willing and able’’ to provide service and comply with applicable regulatory requirements. Section 4142 of SAFETEA–LU continued this registration requirement for freight forwarders and brokers of household goods. However, section 4142(b) amended § 13903 by providing that the Secretary may register a person as a freight forwarder of non-household goods to provide service subject to FMCSA jurisdiction if the Secretary finds that such registration is needed for Rep. 99–120, p. 2 (July 31, 1985). Rep. 104–176, p. 12 (Nov. 21, 1995). 4 Id. the protection of shippers and that the person is fit, willing, and able to provide the service and to comply with applicable regulations of the Secretary and Surface Transportation Board. Section 4142(c) of SAFETEA–LU made a similar amendment to 49 U.S.C. 13904 by providing that the Secretary may register a person to be a broker of non-household goods to provide service subject to FMCSA jurisdiction if the Secretary finds that such registration is needed for the protection of shippers and that the person is fit, willing, and able to provide the service and to comply with applicable regulations of the Secretary and Surface Transportation Board. Significance of Brokers and Freight Forwarders General commodities brokers and freight forwarders offer valuable services to the business community. They work with motor carriers to find less expensive transportation alternatives for commercial shippers and provide additional services to assist shippers, such as shipment tracing, warehousing and storage (freight forwarders) and filing loss and damage claims with the motor carrier responsible for the transportation. Without these transportation intermediaries, shippers would have to devote additional resources to locating and negotiating with motor carriers and would likely have to pay higher transportation costs. Smaller businesses in particular would be disadvantaged by not being able to rely on the services provided by brokers and freight forwarders. Available statistics also indicate a growing reliance on these entities in the shipment of goods. The number of freight forwarder applications filed with FMCSA annually has increased by approximately 80 percent since 2003.6 As with brokers, these figures indicate that freight forwarders represent a growing segment of the transportation industry whose services are relied upon by many commercial shippers to meet their transportation needs. U.S. Census Bureau statistics indicate there were 15,782 establishments involved in the business of freight transportation arrangement in 1997. This industry group includes freight forwarders, marine shipping agents, and brokers. These businesses generated revenues of over $16 billion and employed over 140,000 employees with a cumulative annual payroll of approximately $5 billion. While not all these entities provided services subject to FMCSA jurisdiction, the more current MCMIS data indicate that the number of general commodities brokers and freight forwarders registered with FMCSA exceeds the size of the entire freight transportation arrangement industry reported in 1997. Although FMCSA does not have figures on cumulative revenues and employment for regulated general commodities freight forwarders and brokers, the Census data provide a rough estimate of the potential impact on the regulated freight transportation arrangement industry and the national economy if general commodities freight forwarders and brokers are unable to be relied upon by shippers due to lack of confidence in their activities and financial responsibilities. Freight Forwarders MCMIS indicates that approximately 1,040 active general commodities freight forwarders are registered with FMCSA. Registration of Non-Household Goods Brokers and Freight Forwarders Is Needed for the Protection of Shippers Pursuant to section 4142 of SAFETEA–LU, if the Agency determines that registration of non-household goods brokers and freight forwarders is needed for the protection of shippers, the Agency may require these entities to register. Under 49 U.S.C. 13906(b), brokers must maintain and file with FMCSA a bond, insurance policy or other type of approved security to ensure that the transportation which the broker arranges is provided. Currently, FMCSA regulations require general commodities brokers to file a surety bond or trust fund in the amount of $10,000 (49 CFR 387.307(a)). This requirement is designed to protect shippers who pay brokers who renege on their obligations to arrange for the transportation or to pay the motor carrier. In the latter case, 5 In calendar year 2005, 3,274 applications were filed, compared to 2,518 in 2003 and 2,816 in 2004. 6 In calendar year 2005, 442 applications were filed, compared to 244 in 2003 and 205 in 2004. Brokers FMCSA’s Motor Carrier Management Information System (MCMIS) indicates that approximately 16,930 active general commodities brokers are registered with the Agency as of April 17, 2006. The number of property broker applications filed annually with FMCSA has increased by 30 percent since 2003.5 These figures indicate that property brokers represent an expanding segment of the transportation industry and are being utilized to help meet the transportation needs of a large number of commercial shippers. 2 S. 3 S. VerDate Aug<31>2005 15:15 Aug 23, 2006 Jkt 208001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\24AUN1.SGM 24AUN1 Federal Register / Vol. 71, No. 164 / Thursday, August 24, 2006 / Notices rmajette on PROD1PC67 with NOTICES1 the motor carrier may attempt to bill the shipper, who has already paid the broker for the shipment. It is also designed to protect motor carriers who are not paid for their services but are unwilling or unable to seek payment from the shipper. Section 13906(b) financial responsibility requirements are expressly linked to broker registration by the statute. In other words, without a registration requirement, FMCSA has no statutory authority to impose a bonding requirement to protect shippers and carriers against unscrupulous or financially irresponsible general commodities brokers. As is the case with brokers, the financial responsibility requirements applicable to freight forwarders are expressly linked to the registration requirement. Under 49 U.S.C. 13906(c)(1), FMCSA may register a person as a freight forwarder only if the person files with the agency evidence of public liability insurance to cover negligent operation, maintenance or use of motor vehicles by or under direction and control of the freight forwarder when providing transfer, collection or delivery services. Section 13906(c)(2) permits FMCSA to also require registered freight forwarders to file freight forwarder insurance to cover loss or damage to cargo for which the freight forwarder provides service. There are no independent financial responsibility requirements for the protection of shippers that would apply if general commodities freight forwarders are no longer being registered. Based on the foregoing, FMCSA finds that continued registration of nonhousehold goods freight forwarders under 49 U.S.C. 13903 and nonhousehold goods brokers under 49 U.S.C. 13904 is needed for the protection of shippers. We also note that brokers and freight forwarders must register pursuant to 49 U.S.C. 13901 to engage in interstate transportation. Finally, based on FMCSA’s determination above regarding the protection of shippers, any registration appropriately filed between August 10, 2005 (the date of enactment of SAFETEA–LU) and the date of this Notice shall be effective on the date the registration was approved by FMCSA. Issued on: August 16, 2006. John H. Hill, Administrator. [FR Doc. E6–14064 Filed 8–23–06; 8:45 am] BILLING CODE 4910–EX–P VerDate Aug<31>2005 15:15 Aug 23, 2006 Jkt 208001 DEPARTMENT OF THE TREASURY Submission for OMB Review; Comment Request The Department of Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220. Dates: Written comments should be received on or before September 25, 2006 to be assured of consideration. Community Development Financial Institutions Fund OMB Number: 1559–0016. Type of Review: Revision. Form: CDFI 0020. Title: New Markets Tax Credit (NMTC) Program Allocation Application. Description: The New Markets Tax Credit (NMTC) Program will provide an incentive to investors in the form of a tax credit, which is expected to stimulate investment in private capital that, and in turn, will facilitate economic and community development in low-income communities. In order to qualify for an allocation of tax credits under the NMTC Program an entity must be certified as a qualified community development entity and submit an allocation application to the CDFI Fund. Upon receipt of such applications, the CDFI Fund will conduct a competitive review process to evaluate applications for the receipt of NMTC allocations. Respondents: Private and State, Local or Tribal Governments. Estimated Total Burden Hours: 41,650 hours. Clearance Officer: Matt Josephs, Community Development Financial Institutions Fund, Department of the Treasury, 601 13th Street, NW., Suite 200 South, Washington, DC 20005, (202) 622–9254. OMB Reviewer: Alexander T. Hunt, Office of Management and Budget, Room 10235, New Executive Office Frm 00092 Fmt 4703 Sfmt 4703 Building, Washington, DC 20503, (202) 395–7316. Michael A. Robinson, Treasury PRA Clearance Officer. [FR Doc. E6–13997 Filed 8–23–06; 8:45 am] August 18, 2006. PO 00000 50117 BILLING CODE 4810–70–P DEPARTMENT OF THE TREASURY Submission for OMB Review; Comment Request August 18, 2006. The Department of Treasury has submitted the following public information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104–13. Copies of the submission(s) may be obtained by calling the Treasury Bureau Clearance Officer listed. Comments regarding this information collection should be addressed to the OMB reviewer listed and to the Treasury Department Clearance Officer, Department of the Treasury, Room 11000, 1750 Pennsylvania Avenue, NW., Washington, DC 20220. Written comments should be received on or before September 25, 2006 to be assured of consideration. DATES: Alcohol and Tobacco Tax and Trade Bureau (TTB) OMB Number: 1513–0009. Type of Review: Revision. Title: Application to Establish and Operate Wine Premises Wine Bond. Description: TTB F 5120.25, Application to Establish and Operate Wine Premises, is the form used to establish the qualifications of an applicant applying to establish and operate wine premises. The applicant certifies the intention to produce and/or store a specified amount of wine and take certain precautions to protect it from unauthorized use. TTB F 5120.36, Wine Bond, is the form used by the proprietor and a surety company as a contract to ensure the payment of the wine excise tax. Respondents: Private Sector. Estimated Total Burden Hours: 1013 hours. Clearance Officer: Frank Foote, Alcohol and Tobacco Tax and Trade Bureau, Room 200 East, 1310 G Street, NW., Washington, DC 20005, (202) 927– 9347. OMB Reviewer: Alexander T. Hunt, Office of Management and Budget, Room 10235, New Executive Office E:\FR\FM\24AUN1.SGM 24AUN1

Agencies

[Federal Register Volume 71, Number 164 (Thursday, August 24, 2006)]
[Notices]
[Pages 50115-50117]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14064]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration


Registration of Brokers and Freight Forwarders of Non-Household 
Goods

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), United 
States Department of Transportation (DOT).

ACTION: Notice of determination.

-----------------------------------------------------------------------

SUMMARY: Section 4142 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (SAFETEA-LU), which was 
enacted into law August 10, 2005, authorizes the Secretary of 
Transportation (Secretary) to register brokers and freight forwarders 
of non-household goods (otherwise known as general commodities brokers 
and freight forwarders) if the Secretary finds that such registration 
is needed for the protection of shippers. FMCSA, which has been 
delegated authority to exercise the Secretary's functions and 
activities regarding broker and freight forwarder registration, is 
making a finding that registration of brokers and freight forwarders of 
non-household goods is needed for the protection of shippers. 
Accordingly, the Agency will continue to register all general 
commodities brokers and freight forwarders subject to its jurisdiction.

FOR FURTHER INFORMATION CONTACT: Mr. Michael J. Falk, Office of Chief 
Counsel, 202-366-0834; Federal Motor Carrier Safety Administration, 
U.S. Department of Transportation, 400 Seventh Street, SW., Washington, 
DC 20590-0001.

SUPPLEMENTARY INFORMATION:

Background

    FMCSA's jurisdiction over interstate property brokers is conferred 
by 49 U.S.C. 13501, which gives the Secretary jurisdiction ``over 
transportation by motor carrier and the procurement of that 
transportation'' to the extent the transportation is in interstate or 
foreign commerce. FMCSA's jurisdiction over interstate freight 
forwarders is conferred by 49 U.S.C. 13531, which gives the Secretary 
jurisdiction ``over service that a freight forwarder undertakes to 
provide, or is authorized or required under [Part B of subtitile IV of 
title 49, United States Code] to provide'' to the extent the 
transportation involved is in interstate commerce.
    Brokers and freight forwarders are transportation intermediaries 
who procure the services of motor carriers to transport property. 
Brokers generally do not handle the freight and do not assume legal 
liability for cargo loss and damage. On behalf of shippers, they 
arrange for motor carriers to transport individual shipments from 
origin to destination. Freight forwarders assemble small shipments into 
larger shipments, tender them to motor carriers and ensure that the 
larger shipment is disassembled into smaller shipments upon delivery. 
Freight forwarders may take physical possession of the shipment in 
carrying out these functions.\1\ Freight forwarders issue bills of 
lading and assume liability for cargo loss and damage.
---------------------------------------------------------------------------

    \1\ The statutory definitions of broker and freight forwarder 
are codified at 49 U.S.C. 13102(2) and 13102(8), respectively.
---------------------------------------------------------------------------

    Brokers arranging for transportation of property in interstate 
commerce were first regulated by the Interstate Commerce Commission 
(ICC) in 1935; interstate freight forwarders were regulated beginning 
in 1942. These

[[Page 50116]]

entities were required to obtain operating authority from the ICC and 
meet financial responsibility and other regulatory requirements. The 
Surface Freight Forwarder Deregulation Act of 1986, Pub. L. 99-521, 
deregulated general commodities freight forwarders by removing them 
from ICC licensing jurisdiction. The 1986 Act was intended to ``enable 
freight forwarders which deal with general commodities to compete more 
effectively with other transportation services and to improve the 
financial health of the freight forwarding industry''.\2\ The 1986 Act 
retained ICC jurisdiction over household goods freight forwarders.
---------------------------------------------------------------------------

    \2\ S. Rep. 99-120, p. 2 (July 31, 1985).
---------------------------------------------------------------------------

    The ICC Termination Act (ICCTA) of 1995, Pub. L. 104-88, reinstated 
Federal jurisdiction over general commodities freight forwarders and 
required all freight forwarders to register with DOT. The Senate report 
accompanying the legislation noted that since the 1986 Act, freight 
forwarders of shipments other than household goods were not required to 
obtain a license from the ICC, but were required to maintain a minimum 
level of cargo liability insurance. The Senate report also stated that 
the ``insurance requirement has been difficult to monitor and enforce 
without a Federal licensing requirement. By extending the registration 
requirement to all freight forwarders, the bill would fill an 
inappropriate regulatory gap.'' \3\
---------------------------------------------------------------------------

    \3\ S. Rep. 104-176, p. 12 (Nov. 21, 1995).
---------------------------------------------------------------------------

    The ICCTA continued the licensing (registration) and bond 
requirements for general commodities brokers, which, according to the 
Senate report, were ``needed to protect the public from unscrupulous 
brokers.'' \4\ The Motor Carrier Safety Improvement Act of 1999 
(MCSIA), Pub. L. 106-159, created FMCSA and, among other things, 
conferred on it jurisdiction over brokers and freight forwarders.
---------------------------------------------------------------------------

    \4\ Id.
---------------------------------------------------------------------------

    Prior to SAFETEA-LU, 49 U.S.C. 13903 and 13904 required FMCSA to 
register all freight forwarders and brokers, provided the prospective 
registrant was ``fit, willing and able'' to provide service and comply 
with applicable regulatory requirements. Section 4142 of SAFETEA-LU 
continued this registration requirement for freight forwarders and 
brokers of household goods. However, section 4142(b) amended Sec.  
13903 by providing that the Secretary may register a person as a 
freight forwarder of non-household goods to provide service subject to 
FMCSA jurisdiction if the Secretary finds that such registration is 
needed for the protection of shippers and that the person is fit, 
willing, and able to provide the service and to comply with applicable 
regulations of the Secretary and Surface Transportation Board.
    Section 4142(c) of SAFETEA-LU made a similar amendment to 49 U.S.C. 
13904 by providing that the Secretary may register a person to be a 
broker of non-household goods to provide service subject to FMCSA 
jurisdiction if the Secretary finds that such registration is needed 
for the protection of shippers and that the person is fit, willing, and 
able to provide the service and to comply with applicable regulations 
of the Secretary and Surface Transportation Board.

Significance of Brokers and Freight Forwarders

    General commodities brokers and freight forwarders offer valuable 
services to the business community. They work with motor carriers to 
find less expensive transportation alternatives for commercial shippers 
and provide additional services to assist shippers, such as shipment 
tracing, warehousing and storage (freight forwarders) and filing loss 
and damage claims with the motor carrier responsible for the 
transportation. Without these transportation intermediaries, shippers 
would have to devote additional resources to locating and negotiating 
with motor carriers and would likely have to pay higher transportation 
costs. Smaller businesses in particular would be disadvantaged by not 
being able to rely on the services provided by brokers and freight 
forwarders. Available statistics also indicate a growing reliance on 
these entities in the shipment of goods.

 Brokers

    FMCSA's Motor Carrier Management Information System (MCMIS) 
indicates that approximately 16,930 active general commodities brokers 
are registered with the Agency as of April 17, 2006. The number of 
property broker applications filed annually with FMCSA has increased by 
30 percent since 2003.\5\ These figures indicate that property brokers 
represent an expanding segment of the transportation industry and are 
being utilized to help meet the transportation needs of a large number 
of commercial shippers.
---------------------------------------------------------------------------

    \5\ In calendar year 2005, 3,274 applications were filed, 
compared to 2,518 in 2003 and 2,816 in 2004.
---------------------------------------------------------------------------

 Freight Forwarders

    MCMIS indicates that approximately 1,040 active general commodities 
freight forwarders are registered with FMCSA. The number of freight 
forwarder applications filed with FMCSA annually has increased by 
approximately 80 percent since 2003.\6\ As with brokers, these figures 
indicate that freight forwarders represent a growing segment of the 
transportation industry whose services are relied upon by many 
commercial shippers to meet their transportation needs.
---------------------------------------------------------------------------

    \6\ In calendar year 2005, 442 applications were filed, compared 
to 244 in 2003 and 205 in 2004.
---------------------------------------------------------------------------

    U.S. Census Bureau statistics indicate there were 15,782 
establishments involved in the business of freight transportation 
arrangement in 1997. This industry group includes freight forwarders, 
marine shipping agents, and brokers. These businesses generated 
revenues of over $16 billion and employed over 140,000 employees with a 
cumulative annual payroll of approximately $5 billion. While not all 
these entities provided services subject to FMCSA jurisdiction, the 
more current MCMIS data indicate that the number of general commodities 
brokers and freight forwarders registered with FMCSA exceeds the size 
of the entire freight transportation arrangement industry reported in 
1997. Although FMCSA does not have figures on cumulative revenues and 
employment for regulated general commodities freight forwarders and 
brokers, the Census data provide a rough estimate of the potential 
impact on the regulated freight transportation arrangement industry and 
the national economy if general commodities freight forwarders and 
brokers are unable to be relied upon by shippers due to lack of 
confidence in their activities and financial responsibilities.

Registration of Non-Household Goods Brokers and Freight Forwarders Is 
Needed for the Protection of Shippers

    Pursuant to section 4142 of SAFETEA-LU, if the Agency determines 
that registration of non-household goods brokers and freight forwarders 
is needed for the protection of shippers, the Agency may require these 
entities to register.
    Under 49 U.S.C. 13906(b), brokers must maintain and file with FMCSA 
a bond, insurance policy or other type of approved security to ensure 
that the transportation which the broker arranges is provided. 
Currently, FMCSA regulations require general commodities brokers to 
file a surety bond or trust fund in the amount of $10,000 (49 CFR 
387.307(a)). This requirement is designed to protect shippers who pay 
brokers who renege on their obligations to arrange for the 
transportation or to pay the motor carrier. In the latter case,

[[Page 50117]]

the motor carrier may attempt to bill the shipper, who has already paid 
the broker for the shipment. It is also designed to protect motor 
carriers who are not paid for their services but are unwilling or 
unable to seek payment from the shipper. Section 13906(b) financial 
responsibility requirements are expressly linked to broker registration 
by the statute. In other words, without a registration requirement, 
FMCSA has no statutory authority to impose a bonding requirement to 
protect shippers and carriers against unscrupulous or financially 
irresponsible general commodities brokers.
    As is the case with brokers, the financial responsibility 
requirements applicable to freight forwarders are expressly linked to 
the registration requirement. Under 49 U.S.C. 13906(c)(1), FMCSA may 
register a person as a freight forwarder only if the person files with 
the agency evidence of public liability insurance to cover negligent 
operation, maintenance or use of motor vehicles by or under direction 
and control of the freight forwarder when providing transfer, 
collection or delivery services. Section 13906(c)(2) permits FMCSA to 
also require registered freight forwarders to file freight forwarder 
insurance to cover loss or damage to cargo for which the freight 
forwarder provides service. There are no independent financial 
responsibility requirements for the protection of shippers that would 
apply if general commodities freight forwarders are no longer being 
registered.
    Based on the foregoing, FMCSA finds that continued registration of 
non-household goods freight forwarders under 49 U.S.C. 13903 and non-
household goods brokers under 49 U.S.C. 13904 is needed for the 
protection of shippers. We also note that brokers and freight 
forwarders must register pursuant to 49 U.S.C. 13901 to engage in 
interstate transportation. Finally, based on FMCSA's determination 
above regarding the protection of shippers, any registration 
appropriately filed between August 10, 2005 (the date of enactment of 
SAFETEA-LU) and the date of this Notice shall be effective on the date 
the registration was approved by FMCSA.

    Issued on: August 16, 2006.
John H. Hill,
Administrator.
[FR Doc. E6-14064 Filed 8-23-06; 8:45 am]
BILLING CODE 4910-EX-P