Unpacking Some Of FMCSA’s Proposed Changes To Federal Mover Household Goods Consumer Protection Rules

By Gerald D. Borovick

The FMCSA proposes adopting certain recommendations made to it by a “working group” to change Federal household goods Consumer Protection Regulations motor carriers (Movers) are required to follow when providing interstate household goods transportation or service to an individual consumer shipper (the Individual Shipper).[1]   The intent is to update outdated rules, reduce the paperwork burden on carriers and to reduce consumer confusion – laudable goals, long overdue.

MoveRescue, Mayflower Transit LLC, United Van Lines, LLC, ATA’s Moving & Storage Conference and the International Association of Movers, among others commented on the notice of proposed final rule.  Notice and Comment period has closed and a final rule is expected in the Spring, 2022.

This summary describes a handful of the proposed changes to the federal household goods Consumer Protection Rules this writer believes merit comment.  It highlights traps for the unwary Mover such as a new customer 3-day right to cancel the move without penalty after signing the bill of lading (seemingly similar to the recessionary period for homeowners when refinancing their mortgage following the closing).  Whatever rules are ultimately adopted, for the Mover furnishing interstate transportation of household goods, you will need to be aware of these changes because new rights and responsibilities will require significant adjustment to procedures and paperwork for estimating, booking and contracting with the Individual Shipper.

Historical Background of the Consumer Protection Regulations

Individual Shippers of household goods, particularly those customers who move at their own expense and are infrequent users of transportation services, are unsophisticated and less able to protect themselves than commercial shippers.

The Interstate Commerce Commission (ICC) began regulating household goods motor carriers in 1940.  In 1981 the ICC promulgated the initial version of the Consumer Protection Regulations and publication Your Rights and Responsibilities When You Move.  The ICC was abolished as of January 1, 1996, and as of that date, its household goods programs and consumer protections were transferred to the Secretary of the U.S. Department of Transportation (DOT) and were then delegated to the newly created Surface Transportation Board (STB) and the Federal Highway Administration (FHWA).  Since 1996, the STB’s jurisdiction has included regulating Movers’ interstate transportation of household goods through oversight of published tariffs, including setting rates, valuation charges and procedures authorizing the Mover to be released from full replacement liability by limiting its legal liability for loss or damage to the shipper’s household goods through “released rates,” which are lower rates for moves by following rules in Released Rate Orders.  Since 2000, the Federal Motor Carrier Safety Administration (FMCSA), assumed the FHWA’s responsibility for enforcement of the household goods Consumer Protection Regulations.

In 2015 Congress called for the creation of a working group to make recommendations on the best way to convey relevant information concerning the Consumer Protection Regulations to the consumer.[2]  The former American Moving & Storage Association characterized the Congressionally mandated working group’s charge under the law as how to best educate consumers on how to avoid rogue operators.  Composition of the working group consisted of persons with consumer affairs expertise, educators with expertise in how people learn most effectively and representatives of the household goods moving industry.

In 2017 the working group made 19 recommendations to FMCSA for consideration.  The FMCSA took up 11 of the working group’s recommendations plus additional changes with this proposed rulemaking.

Certain Working Group Recommendations

  • The Bill of Lading

If adopted, the proposed rule will require the Mover and Individual Shipper to sign the bill of lading prior to loading; it must be signed both at origin and destination.

The Mover will be required to issue a completed bill of lading earlier in the process – no later than 3 days before the shipment is scheduled to be loaded.

The Mover will also be required to ensure that the bill of lading is provided to, signed, and dated by the Individual Shipper no later than 3 days before the shipment is scheduled to be loaded.

In addition, the Individual Shipper will have a new right to “rescind” the bill of lading (meaning cancel the move) without any penalty if he or she does so during the 3-day period after the Individual Shipper signs the bill of lading.

FMCSA describes application of these proposed new rules as requiring the Mover:

To provide the bill of lading at least 3 days before loading and provide the individual shipper a 3-day period after the individual shipper signs the bill of lading to rescind the bill of lading.  It would also require a motor carrier to provide the individual shipper with the opportunity to rescind the bill of lading without any penalty for a 3-day period after the individual shipper signs the bill of lading.

When does the 3-day clock start?  Is it the day the Individual Shipper signs and dates the bill of lading?  Is it start the first day after the Individual Shipper signs and dates the bill of lading?  Are the days consecutive?  Are legal holidays and Sundays counted?  If the Mover completes a bill of lading and issues it to the Individual Shipper at least 3 days before loading but (as would be the usual case), the Individual Shipper fails or neglects to date and sign the bill of lading until say, the day of loading and the Mover packs, loads and takes away the household goods, does this mean that the next day and up to 3 days thereafter the Individual Shipper can decide to cancel the move “without penalty?”  Practically speaking, what consumer will date and sign a contract for moving service at least 3 days before their scheduled load date?  In cases where they will not, is the Mover going to have to hound the Individual Shipper to get back the signed and dated bill of lading on time or else run the risk of violating the 3-day rule?  More on this in the “closing thoughts” at the end.

When issued, the bill of lading must list all of the information to service the shipment from origin to destination except for the actual shipment weight on a non-binding shipment and unforeseen charges incurred in transit or at destination.

The Mover cannot require an Individual Shipper to sign a blank bill of lading or other required form.

  • The Order for Service

The order for service would no longer be a required document.  All required information in the order for service would be required to be incorporated into the bill of lading where the Mover elects to eliminate the order for service.

  • The Physical Survey – May Be Conducted Virtually

If adopted, the proposed rule will require the Mover to offer one in all instances regardless of distance from the Mover’s location to where the household goods are to be loaded, unless the Individual Shipper elects to waive it in writing in the form and manner as currently required.  The current exception limiting surveys to distances withing 50 miles would be eliminated.  The 50-mile exception for household goods brokers would be eliminated as well.

As proposed, a physical survey could be conducted “virtually” rather than in-person, if conducted using technology where the Mover and Individual Shipper are physically present on a live video.  The proposed rule provides any survey conducted without a video component, such as verbally or over the phone or through completing a form, would not constitute a required physical survey.

According to the FMCSA, the change if approved, would appear to allow the Individual Shipper to determine whether a physical or virtual survey would better suit their needs.

  • Furnishing Ready to Move? and Your Rights and Responsibilities When You Move

While the proposed rule does remove the requirement for the Individual Shipper to acknowledge a waiver statement on the written estimate, a Mover will continue to be required to obtain from the Individual Shipper a signed, dated receipt as proof of the individual shipper’s acknowledgement that they have received access to the Federal consumer protection information via a hyperlink on the internet.

According to the FMCSA, such signed, dated receipt “is necessary ensure [sic] that the motor carrier’s records are clear that the shipper was able to access to [sic] these documents through the provided hyperlink.”

  • Elimination of Revisions to Estimates

FMCSA proposes eliminating all revised estimates and instead will require the Mover prepare a new superseding binding or non-binding estimate when the Individual Shipper tenders additional household goods or requests additional services.  The new estimate must be prepared prior to loading and signed by the Individual Shipper and for a new binding estimate, should indicate the date, time and manner that the new estimate was prepared.  The Individual Shipper’s tender of more goods or request for additional services requiring a new estimate thus triggering a corresponding change to the bill of lading, would not restart the 3-day rescission clock upon the execution of the bill of lading containing them.

Closing Thoughts

Issuance of a bill of lading carries with it legal consequences separate from the rights and responsibilities created by the Consumer Protection Regulations.  The Supreme Court has held that a bill of lading serves three functions; one of which is that it records that the carrier has received the goods from the party that wishes to ship them.[3]  The legal risk is that the proposed changes to how and when a bill of lading is issued arguably creates a time period on every interstate household goods move where the carrier is leaving itself open to legal liability for claims of loss or damage to the Individual Shippers goods even though the Mover has not taken actual possession of the goods.

This issue was considered by the ICC in 1980.  The bill of lading rule as proposed at that time specified that “the receipt or bill of lading when furnished to the shipper . . . shall not impose on the carrier any liability for the property to be transported prior to acceptance of the shipment” and until the Mover prepared and signed a descriptive inventory acknowledging possession of the goods.[4]  While the proposed rule was ultimately rejected by the ICC, it was for reasons which do not exist in today’s regulatory environment for Movers.  Unlike today, at that time, the Mover was not required to prepare a descriptive inventory and the thinking was that creating such requirement would increase paperwork.[5]  Unchanged by the current rulemaking, one of the documents that a Mover is required to prepare on every interstate household goods shipment is a descriptive inventory before or at the time of loading in the vehicle.  See 49 C.F.R. § 375.503 (10-1-20 Edition).

Unlike the current proposed rule, in 1980 there was no legal requirement to furnish the bill of lading until the goods were loaded.  Perhaps, if the rule considered in the 1980s were included as part of the current rulemaking to make clear that the issuance of the bill of lading would not impose legal liability for loss or damage claims arising prior to the goods being inventoried and acknowledged by the Mover as received would eliminate the risk in issuing a bill of lading prior to taking possession.

Finally, the circumstances occurring on move-day which may cause a change to the price of the move identified in the proposed rule, and thus require a new binding or non-binding estimate and conforming changes to the bill of lading are too narrow in this writer’s opinion.  Currently, if the Individual Shipper tenders more goods or requests additional services on move-day a new estimate is required but such changes will not require the bill of lading to be reissued – triggering a new 3-day right of rescission.  However, there are other circumstances on move-day resulting in a change in the price of the move.  For example, and as the STB has long recognized, the Individual Shipper can and does change his or her valuation selection on the bill of lading, right up until the time that their shipments are loaded onto a moving van.[6]  A change in the customer’s declaration of value should be added to the permissible reasons to change the cost of the move to clarify that such change would not require the reissuance of the bill of lading – triggering a new 3-day right of rescission.

Dated: Sudbury, MA

September 27, 2021

Andresen & Borovick, LLP

323 Boston Post Road
Sudbury, Massachusetts 01776
Tel:  (978) 443-6868

The foregoing is designed to provide general information based on a summary of legal principles for clients and friends of the firm.  It is not intended to be construed as legal advice, or legal opinion on any specific facts or circumstances.  Companies and individuals should consult with legal counsel before taking any action based on these principles to ensure their applicability in a given situation.  The information presented here and on our website should not be construed to be legal advice or the formation of a lawyer/client relationship.  Copyright © 2021 Andresen & Borovick, LLP.  All rights reserved.

[1] In Matter Implementation of Household Goods Working Group Recommendations, Dock. No. FMCSA-2020-0205 (Notice of Proposed Rulemaking), 86 Fed. Reg. 43814-43842, 43816 (Aug. 10, 2021).

[2] See Fixing America’s Surface Transportation Act, Pub. L. 114-94, § 5503(a), 129 Stat. 1312, 1551-52 (Dec. 4, 2015).

[3] See Norfolk S. Ry. v. James N. Kirby, Pty. Ltd., 543 U.S. 14, 18-19 (2004).

[4] See In Matter Practices of Motor Common Carriers of Household Goods (Revision of Operational Regulations), Dock. No. ICC Ex Parte No. MC 19 (Sub-36) (Notice of proposed rulemaking) 45 Fed. Reg. 70923-70949, 70926 (Oct. 27, 1980).

[5] See In Matter Practices of Motor Common Carriers of Household Goods (Revision of Operational Regulations), Dock. No. Ex Parte No. MC 19 (Sub-36) (Notice of final operational rules) 46 Fed. Reg. 16200-16227, 16204-05 (Mar. 11, 1981).

[6] See Released Rates of Motor Common Carriers of Household Goods, Dock. No. STB RR 999, Amendment No. 5, sv’d Jan. 12, 2012, slip op. at 5.