SPECIAL REPORT: FMCSA: Transportes Olympic granted 'permanent operating authority'

By Jami Jones, senior editor | 10/25/2011

Tuesday, Oct. 25, 2011 – In less than one week after the cross-border long-haul “pilot” program started, the Federal Motor Carrier Safety Administration has granted the first participant permanent operating authority.

The announcement was made Wednesday by FMCSA North American Borders Specialist Carla Vagnini at the fall meeting of the Canadian Council of Motor Transport Administrators being held in Ottawa.

As part of being given permanent authority, Vagnini said that Transportes Olympic will no longer be inspected at the border every time.

“It goes to show how much of a joke this so-called pilot program actually is. Our government should be ashamed,” said OOIDA Executive Vice President Todd Spencer.

The issue of granting permanent authority has drawn criticism since DOT Secretary Ray LaHood first signed the memorandum of understanding that governs the pilot program.

LaHood agreed to granting permanent authority after 18 months of cross-border long-haul trucking. He further agreed to credit Mexican motor carriers with the time they were participants in the previous cross-border demonstration program.

The agency has attempted to downplay the permanent operating authority in various press releases and various public speaking engagements. However, the memorandum of understanding is clear on what that means for Mexican motor carriers granted the permanent authority.

The MOU states the “permanent operating authority cannot be suspended or revoked unless the motor carrier receives an unsatisfactory safety rating pursuant to U.S. laws and regulations.”

The memorandum also states that Mexican motor carriers with permanent operating authority may convert to standard permanent operating authority “upon termination or conclusion of the initial phase (pilot program).”

Of particular concern to OOIDA is why Transportes Olympic was granted permanent operating authority. If it were treated like any other new motor carrier operating in the U.S., it would have been denied.

“They simply are not holding Transportes Olympic to the same standards they require of U.S.-based carriers,” Spencer said.

“Transportes is being given permanent, irrevocable authority to operate throughout the U.S. based upon the 18 months they participated in the 2007 demonstration program even though a compliance review completed at the end of that program showed that Transportes had violations that would have caused a new entrant carrier in the U.S. to lose their operating authority.”

Transportes had a number of violations in its 2009 compliance review following the previous demonstration program, which included violations such as using a driver before the motor carrier has received a negative pre-employment controlled substance test result and failing to ask employees about a positive test or a refusal to test in the previous two years.

The company also notably violated a subsection of 383.305, random testing. That, according to the FMCSA’s list of the industry dubbed 16 deadly sins for new entrants, would be an automatic failure for U.S. companies getting their authority to operate for the first time.

“This simply adds insult to outrage,” Spencer said.

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