FMCSA’s Bad Solution

This Editorial appears in the Sept. 7 print edition of Transport Topics. Click here to subscribe today.

The Federal Motor Carrier Safety Administration has proposed “fixing” the underperforming revenue aspects of its Unified Carrier Registration agreement by shifting more of the financial burden to the nation’s law-abiding trucking fleets.

Somehow, the federal government’s involvement in helping the industry resolve inequities in the original system — the much-maligned Single State Registration System — has led to a bizarre result, where carriers’ fees continue to rise under a system designed to reduce them (click here for p. 1 story).

You may remember that UCR was created because an unfair burden was placed on for-hire fleets under SSRS, whereby registration fees collected from truckers were pooled and then distributed to the states based on traffic flows.

So, in a move to ensure that other highway users — namely private fleets and freight brokers — paid their fair share into those interstate truck registration pools, Congress created UCR in 2005. The goal was to provide fairness in collecting funds for the system, without penalizing the states by reducing revenue.

Under SSRS, fleets were paying $10 per truck. UCR, effective in 2007, was to begin collecting fees based on several size brackets of fleets and, because more trucks were supposed to be included in it, costs were expected to decline for many for-hire fleets.

But part of the agreement provided that UCR had to raise at least as much revenue as had been raised by SSRS, to make sure that states didn’t lose money.

Unfortunately, it appears that many states have been less than diligent in making sure that the new companies covered by UCR actually are paying their fees. It seems that as few as 70% of the companies that were expected to pay into the UCR pool actually are sending their money.

As a result, according to FMCSA, without a fee increase next year, UCR would generate only $51 million and not the $113 million it is required to collect.

FMCSA’s solution is not to hold the states accountable for collecting the cash from the nonpayers. Rather, in the arcane logic of a misguided bureaucracy, it now has proposed a major jump in fees for the carriers that are paying into the fund today.

We all agree that something needs to be done to fix the situation. But we believe that FMCSA’s approach of punishing the companies that comply with the rules, to the benefit of the companies that fail to comply, is bad policy and needs to be reversed.