The MOL Comfort Ocean Calamity

The Carrier of Goods by Sea Act states that the carrier is responsible for vessel seaworthiness, the safety of goods in route, and the proper manning of the vessel. Items the carrier is not responsible for include negligence of the master navigator, fire, accidents at sea, acts of God, acts of war, seizure, mutiny, insufficiency of packing of goods, and other situations in which the ocean carrier's actual fault is in question. 

Without ocean freight insurance, a company can be held responsible and liable for such incidents. In order to protect your company and your assets, a viable and comprehensive insurance plan must be set in place.

In June of this 2013, the MOL Comfort ocean container vessel fractured in two separate sections during an incredible storm on the Indian Ocean. The vessel suffered extensive damage to the bow and stern; as a result, the ship surrendered all of its cargo to the sea. Presently, officials are still rooting for the cause to the catastrophe aboard the MOL that caused such devastating loss. 

A possibility that is currently under investigation points to structural weakness that caused the wreck of the UK container ship, the MSC Napoli, in 2007. The investigation into the UK ship's demise showed flaws which were concluded to have been caused by a change in the hull design of the ship. The MOL Comfort ship was constructed one year after the Napoli, at which time the change in design of the hull had not yet been corrected. 

Following the MOL disaster, Mitsui OSK lines pulled the six sister ships of the MOL in order to inspect their hulls. Each were designed and constructed around the same time and at the same shipyard as the MOL Comfort and the UK's MSC Napoli. It is feared investigation will show discrepancies in the hull designs. 

At this time, insurance agents in the US feel the MOL disaster will not effect current insurance rates for cargo carriers. It is certain Mitsui's MOL disaster will send shockwaves through the Japanese ocean shipping market because of he number of ships involved in the bad hull design. 

Ocean freight insurance is sometimes a company's only defense from potential disaster. It is important to have a thorough and comprehensive plan and agents that have the knowledge to protect your investment even in the most unique situations. For more information, please contact us.

The Bmc 84 Broker Bond may present some serious challenges to surety markets writing the bond

Many property brokers, freight forwarders and sureties are still trying to figure out all the fine details of the BMC-84 Surety Bond. Requirements of the bond were revised under the highway reauthorization law also known as MAP-21. The amount of the BMC-84 Surety Bond has been increased from $10,000 to $75,000. This new law mandates sureties to pay out claims in the following manner:

1. broker consents to payment
2. broker fails to respond following notice and the surety deems the claim as valid or
3. claim is unable to be resolved and is reduced to a judgement.

Sureties are now required to pay valid claims despite bond principal objections. Sureties must also respond to claims against the freight broker surety bond within 30 days. In addition, any action taken against a surety to recover a claim, entitles the prevailing party to recover attorney fees. However, it is not clear whether those costs can be collected along with the claim. Questions have also arisen concerning the possibility of the old BMC-84 freight broker's bond must be replaced with the new one. Some are asking if a rider or endorsement increasing the bond amount to $75,000 will comply with the new requirements. In answer, the FMSCA has announced that riders and endorsements will be accepted. One last big concern is the fact that there are still no clear cut guidelines outlining how a surety can be relieved of its liability even when the total amount of the bond had been paid out in claims.

With all these questions hanging in the air, sureties are anxiously hoping the new rules will be clarified soon

FMCSA Helps Veterans Move From Military to Civilian Life

More than 300,000 new jobs are expected in commercial trucking before 2020, according to the Bureau of Labor Statistics. On July 3, FMCSA (Federal Motor Carrier Safety Administration) announced almost $1 million in new grants to help train veterans and military families to fill these positions. 

The grants were awarded to six colleges across the country as part of the Commercial Motor Vehicle Operator Safety Training (CMVOST) grant program and could provide training for as many as 300 new commercial transportation students. The announcement was publicly applauded by the Disabled Veterans National Foundation as a smart way to keep veterans competitive in the job market.

Programs that aim to support military service men and women and their families may be inspired by federal initiatives such as the White House's Joining Forces. Joining Forces, announced by First Lady Michelle Obama and Dr. Jill Biden, in part provides employment and educational resources for veterans and their families. 

Some note that military personnel are naturally suited for the commercial transportation industry, as many service men and women have received training in operating heavy equipment and have fulfilled roles in managing supply chains within the military. With this understanding, initiatives such as the CMVOST's grant program are part of the commercial transportation industry's commitment to helping veterans and their families transition from military to civilian life. For example, in May 2011, FMCSA relaxed commercial learner permit rules to waive the skills test for individuals demonstrating at least two years of safe driving experience in military equivalents of commercial motor vehicles.

Transportation Intermediaries Association (TIA) launched its own Veteran Initiative in March of this year. TIA, partnering with the U.S. Chamber of Commerce, Paralyzed Veterans of America, and Troops to Transportation Logistics (T2TL) seek to connect returning and disabled veterans with TIA members who are looking to hire. The program has been successful. By June, TIA noted that over 350 veterans had been identified as qualified candidates for positions at over 60 TIA companies.

Tips for FMCSA Registration and Compliance 

Motor carriers face a variety of regulations that they must follow based on many aspects. The FMCSA (Federal Motor Carrier Safety Administration) requires different types of licenses and insurances for motor carriers. The system can easily become complicated, especially if you are unsure about what motor carrier classification you are under. In addition, freight brokers face different requirements than common or contract carriers. Here are some starting tips that every motor carrier business should be aware of.

Do I Need a USDOT Number?

The answer to this question is almost always yes. The minor exception to this rule is if a motor carrier has non-hazardous material and both the vehicle and cargo never leave the state they are registered in. However, many states have additional programs that require a USDOT number even if the cargo is not hazardous. Contact your state's Office of Motor Carrier Safety to clarify if your motor carriers are required to have a USDOT number. 

The Process to Receive a USDOT Number

In order to apply for a USDOT number a Motor Carrier Identification Report must be filled out. There is no fee for this application and it can be found at this website. Information will need to be written down such as the past year's carrier mileage, the company operation, and information about passengers and cargo. There is also an online registration assistant to make the process run much more smoothly.

Insurance Requirements

• If a business is a common carrier, or provides for-hire truck transportation and is open to the public, the FMCSA requires liability insurance, but insurance for cargo is not necessary.
• If a business is a contract carrier, or hires specific individuals and requires a contract, only liability insurance is necessary.
• Both common and contract carriers carrying household goods are required to have liability insurance and cargo insurance.
• If you are a broker, or your business manages the transportation of property through motor carriers, the FMCSA requires a surety bond or trust fund agreement.

Invest in Reliable Insurance

These tips only cover very basic information about the FMCSA's requirements. It is incredibly important to make sure you are following all of your federal and state requirements. Global Solutions Insurance Services can provide reliable insurance for motor carriers. Both domestic and international logistics insurance can be provided. GSIS also has experienced staff that can help customize your insurance to fit your business' needs. If you are interested in more information, please do not hesitate to contact us at 310-379-9660 and we would be happy to assist you with any questions you may have about our services

Federal Maritime Commission Calls for Comments on Proposed Changes to OTI Bond

The Federal Maritime commission is accepting feedback on proposed changes to the OTI Bond. The purpose of these amendments is to adapt to a changing market. The new regulations will affect the licensing, financial responsibility requirements and duties of Ocean Transportation Intermediary's. The FMC's aim is to improve transparency and regulatory effectiveness as well as streamlining processes and reducing regulatory burden. Opinions are due by July 31, 2013 and can be sent to Karen V. Gregory, Secretary Federal Maritime Commission 800 North Capitol Street, N.W.Washington, D.C. 20573-0001 Phone: (202) 523-5725 Email: secretary@fmc.gov. 

These can be sent as confidential or non confidential. For non confidential, include an original as well as five paper copies and if possible a PDF to secretary@fmc.gov. Include Docket No. 13-05, Comments on Ocean Transportation Intermediary Regulation Revisions in your subject line. 

If you want your comments to be kept confidential, they must be sent by mail or courier. These must include a transmittal letter marked confidential and detail the extent of the confidential treatment being requested. Responses to requests including confidential material must contain the complete filing and be marked by the filer as "Confidential Restricted" with the confidential segments marked very clearly on each page. Confidential filings must contain an original and a copy of the public version which shall leave out confidential segments and be clearly marked "confidential materials excluded" on each affected page. For submissions or parts of submissions asking for confidential treatment, the Commission will allow such to the extent of the law.

Any questions about the filing process or treatment of confidential material should be directed to the Commission's secretary, Karen V. Gregory at the address or phone number above.

Understanding Your Cargo Insurance

Not all cargo insurance are the same. The breadth of coverage, service, pricing, and loss prevention varies with each insurer. A low cost policy might save you money, but it could also mean you have less coverage. Because cargo insurance covers the legal liability of the carrier as the transporter of freight, carriers cannot afford to be cheap with cargo insurance. The carrier may have to do some research, but if the carrier knows what to look for, there are many cargo insurers that offer good policies at an affordable cost. It also helps if the insurance agent that understands the nature of your business.

Here’s what to look for when considering cargo insurance:

1. Description of Covered Property: This section of the policy informs you what is covered and what isn’t. For example, if you have a policy that covers only ferrous metals, it the cargo doesn’t contain iron, aluminum, or copper, it wouldn’t be covered. If the policy excludes garments, clothing wouldn’t be covered. Another example is that if the policy excludes electronics in which anything that can be plugged in or uses batteries wouldn’t be covered.
2. Insuring Agreement: There are two different types of insuring agreements. Be sure to know which insurance agreement you have. The Named Peril Policy covers only those perils that are listed, subject to exclusions. Perils include the overturn of a vehicle, collision bridge collapse, and so on. Theft is usually covered, but exclusions or endorsements may remove coverage for driver theft or theft from a vehicle which was left unattended. If the incident in question is not covered on the list then you will not be covered.
3. Exclusions: This is the section of the policy where you find that certain perils are not insured. Exclusions, as mentioned above, included theft by the drive (or any other employee), theft from an unattended vehicle (many policies will cover an unattended vehicle if it is completely locked and located in a secure place), and loss when the trailer is not attached to a power unit.
4. Scheduled Vehicle Policies: When the FMCSA removed the cargo insurance requirement, the BMC-32 endorsement was eliminated as well; therefore, the use of a truck that is not listed on policy will no longer be covered. No exceptions.
5. Endorsements: Endorsements covers modifications to the policy. This allows the insurer to expand, restrict, or eliminate coverage. One example is that some cargo policies exclude temperature damage, but with a endorsement coverage is provided if the damage is caused by damaged refrigeration unit. Pay close attention to endorsements since they can add to or limit your policy. Endorsements included removal of refrigeration breakdown coverage due to lack of maintenance records, providing limited theft coverage for unattended vehicles if certain security requirements are met, or removal of any theft coverage for an unattended vehicle. Carriers make a common mistake of looking only at the Exclusions section when analyzing a cargo policy. Be sure to read the full policy and understand its limits.

Do your research and find an insurance agent who has working knowledge of your industry and will answer your questions.  

FMCSA and Senator Charles Schummer Announce Steps to Reduce Bridge Strikes

200.  That's how many bridge strikes occur in NY state alone.  At least 2 trucks hit the Onondaga Parkway Bridge in upstate NY every year, despite 13 separate signs detailing the 10' 9" clearance, and a NYS Department of Transportation ban on truck traffic on that route.  In 2010, one of those strikes was responsible for 4 deaths and over 2 dozen injuries.  How does this keep happening?  One clear answer is the inappropriate use of GPS navigational devices by commercial vehicle operators.

In fact, 80% of bridge strikes by commercial vehicles in New York State have been attributed to the use of passenger vehicle-based GPS devices.  In an effort to alter this trend, the FMCSA (Federal Motor Carrier Safety Administration) and New York State Senator Charles Schumer have instituted a major campaign to increase driver education and understanding of the risks of using the wrong GPS devices to determine truck routes.

Senator Schumer, a long-time advocate of safe driving and sponsor of distracted driving legislation, has pushed hard for the Federal Department of Transportation to examine this issue and to determine methods to mitigate the damage to property as well as the safety risks involved. Although the originally focused on creating legislation limiting and carefully regulating the use of GPS navigation tools, he has now partnered with the FMCSA to develop recommendations and educational programs on the proper use of the technology.

As a result, the FMCSA has begun issuing official recommendations on the proper use of GPS devices in freight vehicle routing.  As part of the new CDL rules required by the Moving Ahead for Progress in the 21st Century Act (MAP-21), specific training in the appropriate use of GPS navigation tools has been proposed as a requirement for all new entry-level certification programs for commercial motor vehicle operators.  

Ongoing commercial driver education will also train and remind drivers to only use GPS systems designed specifically for the industry.  These specialized applications take into account the specifics of the truck they're in, including the height, weight and contents, and will route the trucks onto safe, appropriate roads. The GPS applications available to consumers focus on passenger vehicles only and frequently route trucks onto unsafe or restricted routes, causing them to crash into low overpasses and bridges.

Multiple education and awareness programs have also been developed, both by the industry and the FMCSA.  In partnership with Senator Schumer, a visor card has been designed and distributed reminding drivers of key items to keep in mind when using GPS navigation technology, including: a) use of commercial vehicle-specific technology only, and keeping any software up to date; b) avoiding distracted driving scenarios where the driver is more focused on the device than their driving, and c) ensuring that the driver has entered in all the relevant vehicle information into the system (height, weight) prior to travel so that the suggested routes are appropriate for that specific vehicle. The American Trucking Research Institute (ATRI) and the American Trucking Association (ATA) have also conducted major research studies on this issue as well as developing multiple education and outreach efforts to increase awareness of this issue.