Trucking Companies Ordered to Shut Down Change Names to Remain Operational

The Federal Motor Carrier Safety Administration (FMCSA) orders hundreds of trucking companies to shut down each year for safety violations including lack of licenses, the failure to conduct alcohol and drug tests on drivers, and the use of unsafe equipment. But according to a report issued by the Government Accountability Office (GAO), many of these companies remain in business by changing their names and reapplying for a federal license.

The GAO report is based on a study it conducted of “motor carriers”, or trucking and bus companies, which the FMCSA regulates. It proclaims that more than 1,000 trucking companies have avoided paying fines or complying with an FMCSA's order to shut down by simply changing their names. But the GAO has also suggested that the reported number may be understated because their study only looked for exact matches of addresses and other information, rather than for close matches or similar information.

One GAO official said that this practice of trucking companies “reincarnating” under a new name poses a serious safety threat because many of these companies were ordered out of business for potentially deadly safety violations. In one case, for instance, 17 people were killed on a bus that skidded off a highway when it blew a retreaded tire installed on a steering axle. The use of a retreaded tire on a steering axle is a violation of federal regulations. Yet two months after being ordered off the road, the bus company renewed operations under a new name.

In response to the report, the FMCSA asserted that it had put new oversight measures in place, including a computerized process that compares new applicant information to that of poorly performing motor carriers dating back to 2003. Newly licensed carriers must also undergo a safety audit within 18 months of approval.

But according to the GAO, the FMCSA does not have the computer capability to identify carriers that used similar names and addresses rather than the exact same ones when reapplying for a license.

The House Transportation and Infrastructure Committee has proposed a measure that would direct the FMCSA to improve its computer systems and give it more power to revoke licenses and impose fines. These federal standards, however, are included in a proposed highway reauthorization bill the Obama administration wants delayed for 18 months because of questions over the cost.