On November 4, 2024, the Federal Motor Carrier Safety Administration published a Notice of Proposed Rulemaking (NPRM) to extend the compliance date of certain provisions of the broker and freight forwarder financial responsibility final rule FMCSA adopted in 2023.
As PrePass wrote then, the 2023 final rule made significant changes in what assets may be used to meet the $75,000 security amount required of brokers and freight forwarders and which types of entities can serve as their financial backers.
The final rule also required immediate suspension of broker/freight forwarder operating authority when available financial security fell below the $75,000 amount set in federal law and placed responsibility on the sureties and trustees backing brokers and freight forwarders to notify FMCSA and cancel coverage when they became aware of broker/freight forwarder financial failures or insolvencies. In turn, those sureties and financial institutions could be ruled ineligible to provide financial backing for three years and face civil penalties if they failed to notify FMCSA.
These final rule provisions initially had an effective date of January 16, 2025. Through this NPRM, FMCSA seeks to extend that effective date of these provisions to January 16, 2026. FMCSA notes that there are other provisions of the 2023 broker and freight forwarder financial responsibility final rule which already have an effective date of January 16, 2026, so this NPRM would consolidate the effective date for all provisions.
But the main FMCSA impetus for extending the effective date is to allow the implementation of the new FMCSA online registration system during 2025. FMCSA says that the new automated registration system will support effective compliance management, specifically helping FMCSA, as well as the regulated entities, to meet the 7-day timeframe adopted in the 2023 final rule for suspension of broker/freight forwarder operating authority.
As with any NPRM, public comments are welcome. This one has a short fuse: 15 days, with comments due by November 19, 2024.