Fleet Management News & Business Info | Commercial Carrier Journal
Issue link: http://read.uberflip.com/i/751200
60 commercial carrier journal | november 2016 Carriers prepare tech to meet, exceed shipper requirements BY AARON HUFF D uring the last six weeks, Tyler Hayes has reviewed a handful of contracts from major shippers that con- tain new provisions for complying with the Food Safety Modernization Act and, more specifically, the Sanitary Transportation of Human and Ani- mal Food rule. Hayes is associate general counsel of C.R. England, the nation's largest refrig- erated carrier (CCJ Top 250, No. 19). e Salt Lake City-based company operates more than 5,000 refrigerated trailers and 1,600 intermodal containers. In reviewing C.R. England's com- mercial transactions and contracts, he is spending more of his time these days on regulatory compliance and food safety. Other motor carriers and freight brokers that transport tempera- ture-sensitive loads also are starting to see how the Food and Drug Admin- istration's FSMA and STF rule might impact their operations. "ose of us in the middle of it are still trying to figure out what it will ultimately look like," Hayes says. Based on early indicators, he is concerned that "people that are not carefully reviewing their contracts might end up with more liability than they would have foreseen." New changes FDA proposed the rule in 2013, and a final rule was published April 6, 2016. Enforcement will begin one year aer that date. By April 2017, shippers will be re- quired to communicate their food safety requirements to carriers in the key areas of equipment, operations and training. Carriers must have written policies and be able to document compliance. A failure by a shipper to dictate any of the required steps or failure by a carrier to follow through could result in fines, cargo claims and criminal sanctions. Carriers with less than $500,000 in average annual revenue are exempt from STF compliance. e rule also adds an extra year to the compliance deadline until April 2018 for motor carriers with less than $27.5 million in annual revenue and fewer than 500 employees. While this may seem like good news for small carriers, the rule could make it more difficult – and perhaps impossible – for them to do business with many ship- pers aer April 2017. Small carriers may have no choice but to comply voluntarily. Shippers have to define their require- ments for food safety, and freight brokers have to implement those requirements with carriers. Brokers may have no choice but to avoid doing business with small carriers that haven't complied. "It's going to be interesting to see how this shapes out," Hayes says. "If you have five people in a transaction chain, but only three of them are subject to the rule, how do you deal with the other ones?" Another complication from the rule is that freight brokers will be held liable as shippers. "is alone will cause a boatload of new legal challenges, as most freight brokers don't have insurance to cover them for these types of losses," says Sam Tucker, chief executive officer of Carrier Risk Solutions, an Atlanta-based compliance and fleet safety manage- ment firm. Motor carriers and freight brokers that transport temperature-sensitive loads also are starting to see how FDA's Food Safety Moderni- zation Act might impact their operations.