New Highway Law Restricts ‘Convenience Interlining’
By Daniel P. Bearth, Staff Writer
This story appears in the Feb. 18 print edition of Transport Topics. Click here to subscribe today.
The new highway funding law will curtail the ability of carriers to hand off freight to other carriers through certain types of interline arrangements, a veteran transportation attorney said.
Attorney John Bagileo of Glenwood, Md., said MAP-21, signed by President Obama in July, restricts the practice of “convenience interlining” in which one carrier hires another to transport freight and does not play any active role in the actual shipment.
Interlining was once commonplace in trucking because the federal government restricted carriers’ operating authority to specific areas and commodities. The Motor Carrier Act of 1980 removed most of those restrictions, but the use of interlining continued, primarily as a way for local and regional less-than-truckload freight carriers to handle longhaul shipments.
At a recent conference in Atlanta, Bagileo said provisions in MAP-21 will change the way in which some carriers exchange freight.
“MAP-21 limits convenience interlining by requiring motor carriers to have broker authority separate from its operating authority,” Bagileo said. “Additionally, the carrier will have to inform the customer if it is accepting transportation as a motor carrier, broker or forwarder.
“For all practical purposes, this rule eliminates interlining of freight between two or more carriers, unless the originating carrier physically participates in its transportation,” Bagileo said.
MAP-21 also imposes new bonding and registration requirements on freight brokerage firms and freight forwarders.
Beginning in July, brokers and forwarders must post a $75,000 surety bond or trust fund agreement to protect carriers and shippers against the nonpayment of freight charges. The previous bonding requirement was $10,000 for general freight carriers and $25,000 for household goods carriers.
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