How Easy Is It for Truck and Bus Companies that Have Been Shut Down for Safety Violations to Reopen Under Different Names?

Reopening as a new business is too easy for truck and bus companies, so it appears. Skirting loose state laws for new company registrations has appeared to be quite simple for some less-than-reputable companies in the trucking industry. A recent article in the Insurance Journal noted how “reincarnated” trucking companies pop up almost instantly in Georgia, even after regulators have issued out-of-service orders to these motor carriers.

In the motor carrier industry, “reincarnation” refers to the act of a company that already has a Department of Transportation (DOT) number applying to the Federal Motor Carrier Safety Administration (FMCSA) for a new number – as if it were a brand new company. While there are often legitimate reasons for a company to reincarnate, such as the death or divorce of an owner or moving the business across state lines, not all companies apply for new numbers for good reasons. By exploiting the ease of registration for a new number (simply filling out a form and paying a fee), some trucking and bus companies reincarnate to avoid fines and penalties.

Truck Companies That Quickly Resume Business: A Safety Issue

These reincarnated trucking and bus companies re-enter the marketplace basically as the same company. There is no nationwide system to track companies that have been put out of business due to safety violations. In Georgia and other states with similar regulations for truck companies, reviews are not usually conducted until the business has been around for 18 months or longer.

When issued a new number, a company is able to continue operation without any link to past transgressions because the new number does not carry any indication of past safety violations. The new number essentially offers companies a clean slate.

FMCSA numbers reveal that between 2007 and May 2010, nearly 11 million roadside inspections took place and about 20 percent of those resulted in an out-of-service order for trucking and bus companies.

Roadside checks result in an out-of-service order when a truck or bus is found to be violating safety rules and the trucking or bus company has a history of safety violations. The issuance of an out-of-service order does not mean that the company is put out of business, but is supposed to mean that the truck or bus may be ordered off the road until a fine is paid or the safety violation is fixed. Due to space limitations at weigh stations and rest stops, many drivers given an out-of-service order are allowed to continue driving — a practice that is problematic for motorist safety.

When they are not allowed to keep driving, some companies have turned around and “reincarnated” themselves by obtaining a new DOT number. The result is that unsafe trucking companies are right back on public roads continuing to practice unsafe habits — overloading vehicles, disregarding proper maintenance schedules and not abiding by truck driving regulations. This behavior is a major factor that can lead to tragic truck accidents. Unfortunately, accident victims often have difficulty tracking down responsible parties after being injured in an accident with a truck owned by a reincarnated carrier.

The Process of Stopping Reincarnation: New FMCSA Regulations

In Texas and other states, increased trucking needs and traffic are bringing these safety issues to light. Several recent crashes in Texas sparked new regulations from the FMCSA, which has found that reincarnated trucking companies continue to resurface.

Earlier this year, the FMCSA was granted additional authority to start targeting transportation companies that reincarnate themselves to avoid safety violations and fines. The new regulation expands the federal agency’s power to “take action against unsafe motor carriers that attempt to evade enforcement by ‘reincarnating’ into other forms or by illegally continuing their operations through affiliate companies.”

Under this new authority, companies that are given out-of-service orders have 21 days to ask for an administrative review before a final order is issued. Perhaps most importantly, the new regulation now allows the FMCSA to permanently consolidate all of the records of reincarnated carriers — including records on safety, performance, compliance and enforcement.

Since May 2012, the FMCSA has shut down a number of motor carrier companies, including three large bus companies: Apex Bus Inc., I-95 Coach Inc. and New Century Travel Inc. These three companies oversaw a broad network of bus operations, and their closing resulted in the end of 26 bus operations – transporting 1,800 passengers a day, in most cases between New York and Florida. As U.S. Transportation Secretary Ray LaHood said, “Follow the rules and keep people safe or we will shut you down.”

Shutting down these reincarnated truck companies is important to help protect all motorists on the road, because if a truck driver or company has violated a safety rule in the past, there is a good chance that it will happen again — and this time it could result in a catastrophic injury. If you or a loved one has been injured in a truck accident or bus crash, it is important to know your rights. Contact an experienced trucking accident attorney near you for more information.