SURFACE TRANSPORTATION BOARD

CONGRESS ABOLISHES THE ICC AND CREATES
THE SURFACE TRANSPORTATION BOARD

                                   Reproduced with the Permission of Miles L. Kavaller

As you all know by now, the President signed the ICC TERMINATION ACT OF 1995 ("ICCTA") which went into effect on January 1, 1996. Section 101 states: "The Interstate Commerce Commission is abolished." Thus, the oldest federal regulatory agency which served as a model for all other federal as well as state regulatory bodies has, in effect, died of old age at 108 having lived for more than a century.

The ICCTA replaces the Interstate Commerce Act by amending Subtitle IV of Title 49 in the United States Code. While abolishing the ICC, the new law creates a new regulatory body called the SURFACE TRANSPORTATION BOARD ("Board"). It will be comprised of three (3) members and will be part of the United States Department of Transportation. The Board will administer the provisions of the ICCTA just as the ICC administered the provisions of the Interstate Commerce Act. Further, all orders, determinations, rules, regulations, permits, certificates and licenses issued, made or granted by the ICC continue in effect unless modified, terminated, superseded, set aside or revoked by the Board.

Accordingly, all licenses issued as well as the regulations and administrative rulings and orders found in Title 49 of the Code of Federal Regulations remain in effect in conjunction with the applicable provisions in the ICCTA. For example, the ICC's loss and damage claim regulations found at 49 C.F.R. Part 1005 remain in effect. However, the ICC's regulations pertaining to the issuance of operating authority are no longer in effect because the registration provisions in the ICCTA are drastically different from the licensing requirements in the Interstate Commerce Act.

The ICCTA is broken down into three (3) parts. Part A deals with rail, Part B deals with motor carriers, water carriers, brokers and freight forwarders and Part C deals with pipeline carriers. Part B dealing with motor and water carriers, brokers and freight forwarders, by and large, retains the current law. Thus, the Negotiated Rates Act of 1993 ("NRA"), the Transportation Industry Regulatory Reform Act ("TIRRA") and the federal preemption of intrastate economic regulation of motor carriers contained in the Federal Aviation Administration Authorization Act ("FAAAA") are carried forward into the new law with some minor but significant modifications.

Rather than obtaining operating authority in the form of a motor common carrier certificate or permit or broker's license, carriers will now need only register by showing willingness and ability to provide service, comply with safety requirements, obtain appropriate insurance and designate agents for service of process. The distinction between common and contract carriers has been eliminated.

Another significant change in this area requires freight forwarders, deregulated in 1986, to now register with the Board. The definition of forwarder in the Interstate Commerce Act is retained in the ICCTA. A forwarder assembles and consolidates and provides for break bulk and distribution of shipments, assumes responsibility for the transportation from origin to destination and uses motor, rail or water carriers to perform the line-haul transportation.

Under TIRRA, motor common carriers were relieved from the requirement of filing their tariffs. However, carriers are required to provide the shipper, on request, with a written or electronic copy of the rate, classification, rules, and practices, upon which any rate applicable to its shipment or agreed to between the parties is based. While rate bureaus may still establish through routes and joint rates, classifications, mileage guides, rules, divisions and rate adjustments of general application based on industry average carrier costs, and while bureau agreements are subject to approval by the Board, it does not appear as though these rates must be filed. Carriers must participate in the bureau rates, classifications, mileage guides, rules or packaging and must also issue a power of attorney to the publishing agent.

Notwithstanding these requirements, however, the filed rate doctrine which requires carriers to bill and shippers to pay only the filed rate has been abolished for all intents and purposes except as to household goods carriers.

As indicated, operating authorities issued by the ICC remain in effect and carriers are therefore not required to re-register with the Board. New applicants must register. I am informed that, as of this date, the application forms used by the ICC may still be submitted to the Federal Highway Administration for processing. However, the Board has not yet issued regulations concerning the new registration requirements.

The Carmack Amendment has been retained; carriers are still liable for the actual loss or injury to the property. Carriers may also establish rates for which their liability is limited to a declared value, provided that it is reasonable under the circumstances surrounding the transportation and the motor carrier provides the shipper, on request of the shipper, with a written or electronic copy of the rate, classification, rules and practices upon which any rate applicable to a shipment is based. The statute of limitations for filing suit for freight claims remains the same, that is, within two (2) years from the date the carrier provides the shipper with written notice of declination of its claim.

All in all, I see very little substantive change in the law or its administration by the adoption of the ICCTA, the abolition of the ICC and its replacement by the Surface Transportation Board. Perhaps it is now a smaller bureaucracy.