SPECIAL REPORT: Investigative report criticizes ‘reincarnated’ motor carriers

| 7/31/2009

Friday, July 31, 2009 – One Texas motor carrier reregistered with the Federal Motor Carrier Safety Administration under the Spanish translation of its original name to avoid paying $143,000 in safety fines, though the company’s address, phone, fax and company officer name remained the same.

A bus company based out of a New York school was placed out-of-service and didn’t pay a fine. Instead, the carrier simply reregistered out of a church next door.

A report to Congress says that dozens of “reincarnated” motor carriers – both truck and bus companies – have gone out of business to avoid fixing safety problems or paying fines and instead are re-emerging under new identities, a practice long condemned by OOIDA.

The Government Accountability Office, Congress’ investigative arm, recently released a report mainly focused on bus companies that avoid safety issues and other payments by shutting down and restarting under a new name. Called “Motor Carrier Safety: Reincarnating Commercial Vehicle Companies Pose Safety Threat to the Motoring Public; Federal Safety Agency Has Initiated Efforts to Prevent Future Occurrences,” the report is available here.

Besides motor coaches, the report also showed how a lack of enforcement allows many questionable trucking companies to keep rolling.

The report showed 1,073 potentially reincarnated trucking companies during fiscal years 2007 and 2008, including at least 500 that were still active as of June.

“We referred the active carriers to FMCSA for further investigation,” the report stated.

The FMCSA and state law enforcement agencies conduct about 2.3 million vehicle inspections each year at weigh stations and other locations, though they’re only able to conduct compliance review on about 2 percent of motor carriers, the report states.

GAO identified 20 motor coach companies that reincarnated from out-of-service carriers, but the report says that number is likely understated.

“GAO analysis was based on exact matches and also could not identify owners who purposely provided FMCSA deceptive information on the application to hide the reincarnation from the agency,” the report states.

The investigation was launched after the U.S. House Committee on Transportation and Infrastructure asked the GAO to look into motor carriers after several recent major bus crashes tied to companies with questionable safety records.

For instance, on Aug. 8, 2008, a bus with Vietnamese pilgrims crashed in Sherman, TX, killing 17 people and injuring dozens more. The bus was owned by a company with a history of safety violations. At the time FMCSA briefly stopped issuing authority to new bus companies.

“According to FMCSA officials, registration and enforcement policies at the time of the Sherman, TX, crash, reincarnation was relatively simple to do and hard to detect,” the GAO report states.

The investigation sparked several statements from Washington, DC, lawmakers.

“It is obvious that these companies are intentionally trying to deceive FMCSA and the public by reinventing themselves as ‘new’ carriers,” said U.S. Rep. Jim Oberstar, D-MN, who chairs the House Transportation and Infrastructure Committee.

“In fact, these carriers are still operating the same unsafe vehicles, using the same unfit drivers, and engaging in the same unsafe operating practices. The carriers GAO identified were shut down because they were seriously jeopardizing public safety. FMCSA must protect public safety by making sure these unsafe carriers stay off the road.”

The Owner-Operator Independent Drivers Association has asked FMCSA to improve its ability to track these types of chameleon carriers for years.

OOIDA leadership was pleased to see the GAO investigate “reincarnated” motor carriers.

Rick Craig, OOIDA director of regulatory affairs, said the Association, however, hopes future investigations will look at more trucking operations.

“We know from experience and member complaints that there are a lot of trucking companies doing the same thing. The GAO needs to home in on them,” Craig said.

Trucking companies can avoid fines, court orders and other issues by shutting down and starting new companies, often from the same address.

“It allows all these scammers to keep screwing people and continue violating the law,” Craig said. “They steal money and operate unsafely and then disappear, just to open up under a new name and do the same things all over again.”

U.S. Rep. Peter DeFazio, D-OR, who also chairs the House Subcommittee on Highways and Transit, said the next highway bill will require DOT to do “a more thorough check” to keep rogue operators from rising from the dead.

The highway bill, called the Surface Transportation Authorization Act of 2009, was sent to the full House Transportation and Infrastructure Committee in late June. The bill includes provisions to address the problem of reincarnated carriers – both trucking and bus operations. The provisions include requiring FMCSA to check for past relationships among carriers seeking new registration and penalties against carriers who reincarnate.

“The findings of this GAO report are disturbing,” DeFazio said in a statement. “No motor coach company should ever be allowed to ‘reincarnate’ and continue to operate on our nation’s highways without making the necessary safety improvements.”

– By Charlie Morasch, staff writer