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Temporary Operating Authority Gives Private Fleets Chance To Get Moving Again

Temporary Operating Authority Gives Private Fleets Chance To Get Moving Again

Companies operating private fleets sidelined by the coronavirus epidemic have an opportunity to put those assets on the road by applying for temporary operating authority from the Federal Motor Carrier Safety Administration (FMCSA).

The FMCSA on Friday issued a Notice of Enforcement Discretion Determination whereby the agency will accept requests for temporary operating authority — and waive the registration fee of roughly $100 — for carriers seeking for-hire status to help with relief efforts during the coronavirus emergency.

The FMCSA typically makes temporary operating authority available only during "exceptional circumstances" such as natural disasters or national emergencies, and usually only after it has issued an emergency declaration as it did last week in the case of COVID-19.

But because the emergency waiver issued for the current crisis is an unprecedented national waiver affecting supply chains across the entire country, it could be particularly valuable for private fleets with idle equipment, according to a trucking regulatory expert.

"Most for-hire carriers already have permanent interstate operating authority and therefore don't need temporary authority," Andrew Light, an attorney with the law firm Scopelitis, told FreightWaves.

"But where I see this getting a lot of interest is from companies that haul their own goods as private carriers. Private carrier fleets sitting idle can certainly provide a for-hire service in responding to this emergency. I've had several calling to find out how quickly they can get temporary authority, which takes about three or four days."

Light cautioned, however, that while FMCSA may routinely grant temporary authority in a national emergency, carriers must file proof of auto liability insurance that shows the company has the requisite coverage to haul freight under the authority. Excluding the transportation of hazardous materials, the insurance coverage needed for trucks that weigh 10,000 pounds or more is $750,000; trucks under 10,000 pounds require $300,000 in coverage.

Because the carrier's insurance company did not base its original coverage on for-hire status, "the insurers might see this as a different type of risk and be hesitant to insure it," Light said, "so you would definitely need to consult with your insurer."

Light also recommended that carriers considering applying for temporary authority look into getting traditional truck cargo insurance, given that a company's current coverage may cover only the commodity that the company produces and transports.

"In selecting cargo coverage, most truckload shippers require at least $100,000, but you should check with the potential customer, if known, as to its requirements."


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Posted-In: Coronavirus Covid-19 Federal Motor Carrier Safety Administration FreightwavesNews Markets

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