The Quest
Inside this issue:

Help us with our Hurricane Sandy relief efforts; Risk management tips to help your business

What you need to know about the 2012 Transportation Bill

NVOCC China rider increase effective Nov. 23

New provisions regarding legal disputes for freight forwarders in China

New Jersey seeks to ban companies classifying truck drivers as independent contractors

Customs brokers face increased liability risks under food safety act

CARB Update: Clarification of regulations applicability to customs brokers, freight forwarders and NVOCCs nationwide; new SmartWay regulations

CBP updates ACEopedia
(click here to access)


CARB Update: Clarification of regulations applicability to customs brokers, freight forwarders and NVOCCs nationwide; new SmartWay regulations

As a follow up to our Special Quest dated Oct. 22, 2012, we have received a number of questions regarding the applicability of the California Air Resources Board (CARB) reefer container regulations.

CARB has confirmed that their regulations apply to anyone who arranges for trucking (including customs brokers and international OTIs). According to CARB regulations, a “broker” is defined as a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.

While this language is similar to the FMCSA’s definition of a broker under § 371.2, CARB contends that any entity that meets the above definition is a “broker,” regardless of whether the entity is federally licensed. CARB does not take into account whether a company is or is not exempted from being a licensed property broker under federal law or if exempt commodities, such as produce, are being shipped.

The primary focus of non-compliance penalties will initially target vehicle owners, but CARB has a broad focus on environmental compliance. If necessary, CARB will pursue all parties in the event of non-compliance, in a manner that could create stacking fines (e.g., $1,000 from a customs broker, $1,000 from the consignee, etc.)

If you have any questions regarding this regulation, please contact Rod Hill, Staff Air Pollution Specialist at CARB at (916) 327-5636. You may also visit http://www.arb.ca.gov/diesel/tru/tru.htm.

CARB SmartWay Regulation
CARB has also announced their new SmartWay Regulation. This tractor-trailer greenhouse gas regulation was developed to reduce emissions produced by heavy-duty tractors and make them more fuel efficient.

The regulation applies primarily to owners of 53-foot or longer box-type trailers, including both dry-van and refrigerated-van trailers, and owners of the heavy-duty tractors that pull them on California highways. Entities subject to this regulation must either use EPA SmartWay certified tractors and trailers, or retrofit their existing fleet with SmartWay verified technologies, such as low-rolling resistance tires. All companies, regardless of where their vehicle is registered, must comply with the regulation when operating affected vehicles on California highways. In addition, California-based brokers and shippers must also assist in compliance with the regulation.

Compliance is currently required for model year 2011 and newer trucks. Model year 2010 and older compliance takes effect on Jan. 1, 2013 for owner-operators and on June 1, 2013 for 20% of large fleets. Full compliance for large fleets is required by 2016.

Avalon remains committed to providing the highest level of service to our clients and keeping you apprised of governmental changes affecting your business. We are the leading provider of insurance and surety products for logistics and transportation providers.

For more information, please contact your local Avalon office or Andriana Davis at (847) 700-8087 or at adavis@avalonrisk.com. A list of our offices may be found at www.avalonrisk.com/contact.html

Avalon Risk Management


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