Category Archives: Legislative Issues

Collecting Small Trucking Invoices

Local trucking sometimes involves the collection of small invoices.  Sending out bills is good;  but getting a new customer can be nerve-wracking.  Will they be happy with the service?  Will they pay their invoices?  Did they switch because their previous carrier cut them off?  References and credit checks only go so far, and that is not far enough.  Ultimately, it is always a risk to add a customer.  Here are some ways to lessen the risk.

Let’s suppose that your shiny new customer has failed to pay the first few invoices.  What to do now?  Legal action is very expensive, and you can never be sure of the outcome.  Here are a few ideas to try after your in-house efforts to collect are exhausted:

  1. Invoice Other Parties to the Transaction:  There are numerous court cases and their rulings sometimes conflict, but there is enough case law out there to justify your taking this step.  Unless section 7 of the BOL is executed, you can try to collect freight charges from other parties to the shipment.  It may be the shipper, or consignee, or both if arranged by a third party.  Start with an apologetic call in which you inform them that, even though they may have paid for shipping already, they are liable to you for the charges because “……………” (whoever is not paying you) did not pay the freight invoice.  You can tell that other party that you are sorry, of course, to have to take this course of action, but the law is clear, and it was put in place to protect carriers like your company from situations exactly like this.  Gently suggest that they call the offending party and encourage the invoice to get paid, solving the problem.  This puts huge pressure on your customer, as now THEIR customer or vendor is angry with them.  If this initial call does not do the trick, go ahead and issue an invoice, and follow with collection calls to everyone.
  2. Find a Specialized Attorney:  There are attorneys and firms that specialize in small collections and can be effective with claims under $1,000.  Typically they start with a series of letters and then go to lawsuit.  Here is a common arrangement:  You send the attorney copies of unpaid invoices (with supporting documents and any explanations).  The attorney will try to collect and, if successful, will charge you a fee between 20-30% of anything collected.  If this fails, you may be offered the choice to file a lawsuit by paying for court costs (different in every state, often over $100).  After this point the attorney keeps about 50% of anything collected.  The attorney may suggest you accept less than the amount owed, meaning you end up with well under 50% of the original charges.  What you’ll be left with is better than nothing, and in particular, the act of documenting the deadbeat customer will help future carriers make better credit decisions.  Word gets around.  Because some shippers are in the habit of stiffing local trucking companies on a regular basis, your taking strong action in this way will make it less likely that shippers will pick your company as a victim.
  3. Settle:  It is unpleasant, but sometimes the situation calls for a business decision.  Try calling and asking what THEY think is the fair amount to pay–and then, when an amount is mentioned, just accept.  Better to get something rather than nothing. The process of settling is not only much faster but also probably yields the same amount (after fees) as a collection placement.  Make sure you have a system in place that prevents accepting more work from that party in the future.

Appeals Court Vacates EOBR Regulation

Because the proposed EOBR regulation did not address how the rule could prevent EOBR devices from being used to harrass drivers, a federal appeals court in the Seventh Circuit (in Chicago) vacated the regulation on August 26th.

Click here to see the article in CCJ.

As we’ve posted before, the EOBR rule generally would not have applied in local trucking because of the 100- or 150-mile HOS exemption.  Despite this setback for the FMCSA, the EOBR issue is not dead.  Watch this space for further news.

–The Editors

HHUT: When To File, When To Pay in Local Trucking?

The Internal Revenue Service today advised truckers and other owners of heavy highway vehicles that their next federal highway use tax return, usually due Aug. 31, will instead be due on Nov. 30, 2011.

Because the highway use tax is currently scheduled to expire on Sept. 30, 2011, this extension is designed to alleviate any confusion and possible multiple filings that could result if Congress reinstates or modifies the tax after that date. Under temporary and proposed regulations filed today in the Federal Register, the Nov. 30 filing deadline for Form 2290, Heavy Highway Vehicle Use Tax Return, for the tax period that begins on July 1, 2011, applies to vehicles used during July, as well as those first used during August or September. Returns should not be filed and payments should not be made prior to Nov. 1.

To aid truckers applying for state vehicle registration on or before Nov. 30, the new regulations require states to accept as proof of payment the stamped Schedule 1 of the Form 2290 issued by the IRS for the prior tax year, ending on June 30, 2011. Under federal law, state governments are required to receive proof of payment of the federal highway use tax as a condition of vehicle registration. Normally, after a taxpayer files the return and pays the tax, the Schedule 1 is stamped by the IRS and returned to filers for this purpose. A state normally may accept a prior year’s stamped Schedule 1 as a substitute proof of payment only through Sept. 30.

For those acquiring and registering a new or used vehicle during the July-to-November period, the new regulations require a state to register the vehicle, without proof that the highway use tax was paid, if the person registering the vehicle presents a copy of the bill of sale or similar document showing that the owner purchased the vehicle within the previous 150 days.

In general, the highway use tax applies to trucks, truck tractors and buses with a gross taxable weight of 55,000 pounds or more. Ordinarily, vans, pick-ups and panel trucks are not taxable because they fall below the 55,000-pound threshold.

For trucks and other taxable vehicles in use during July, the Form 2290 and payment are, under normal circumstances, due on Aug. 31. The tax of up to $550 per vehicle is based on weight, and a variety of special rules apply to vehicles with minimal road use, logging or agricultural vehicles, vehicles transferred during the year and those first used on the road after July.

Texting (or Not) While Driving — the Local Trucking Angle

As of this writing, 34 states, the District of Columbia, and Guam have adopted laws prohibiting texting while driving. These laws cover all drivers, not just truck drivers.

Click here to see a table of all current state texting laws.

Illinois, Texas, and Arkansas also ban any use of cell phones in school and construction zones.

safe local trucking driving

Don't Text and Drive Your Truck!

Also, for just over a calendar quarter now, no truck driver in the nation may text while transporting hazmat.  Click here to read more.

What is your experience with local trucking and the new texting laws?

–The Editors

HOS Rule Release Delayed Until October 2011

The FMCSA has decided to delay, until October, the release of its new Hours of Service (HOS) rules, according to an article published today in The Journal of Commerce.

Click here to read the full article.

The new ruling is not likely to be beneficial to trucking companies, even local trucking firms.  As we’ve noted before, we do not believe the new proposed regulations to be of any benefit. Rather, they will harm local trucking companies.  The newest federal safety data show that the reduction to eleven-hour days was sufficient to dramatically reduce accidents and injuries.  Any further reduction is unnecessary and will be harmful to the industry and to the drivers who work for local trucking and cartage firms.

If you have concerns about how the pending HOS rules affect your local trucking business, don’t just sit on your hands;  contact your elected representatives!

–The Editors

New HOS Data Has ATA Firing Back at FMCSA

The American Trucking Association was back on offense yesterday, calling on the FMCSA to scrap its proposed changes in HOS (hours-of-service) rules.  The ATA claims that new federal safety data do not support the FMCSA’s proposed changes to HOS because the current rules have dramatically lowered accident rates and are therefore sufficient.

Here is a link to the article in CCJ:

http://www.ccjdigital.com/new-safety-data-prompts-ata-to-again-call-on-fmcsa-to-retain-hos-rules/

Remember, the good news for local trucking, cartage, and P&D is that, whether implemented or not, the changes currently being debated in HOS regulations will not affect local trucking companies. Most local truckers operate under the 100 Air-Mile Exemption (115 statute miles as the crow flies) where a driver is allowed to record duty time using a time clock instead of RODS (logbook or EOBR).   The rules of 60 hours per week, 12 hours per day, with one 16 hour day permitted per week, etc.  remain unchanged.

HOS (Hours of Service) Regulations and Local Trucking

How Will New Hours of Service Regulations or HOS Affect Me?

The good news is that the changes currently being debated in HOS regulations will not affect local trucking companies.  Most local truckers operate under the 100 Air-Mile Exemption (115 statute miles as the crow flies) where a driver is allowed to record duty time using a time clock instead of RODS (logbook or EOBR).   The rules of 60 hours per week, 12 hours per day, with one 16 hour day permitted per week, etc.  remain unchanged.

Click this link to read the actual federal regulations.

Click here for FAQs from the FMCSA.

Please leave a comment — we’d love to hear from you.

 

EOBR and Local Trucking

EOBRs, or Electronic On-Board Recorders, are a hot topic in Washington.  The general movement is to require almost ALL carriers to install in the next few years at an annual expense of $500-900 per truck.  GOOD NEWS! Local trucking organizations using the 100 or 150 mile HOS rules appear to be exempt from this expensive regulation.  We will alert you if anything changes, but for now, for us local guys, the issue is moot.