CARB Reefer Regulations to Become Effective January 1st

by George Carl Pezold

Effective January 1, 2013, new California Air Resources Board (CARB) regulations will become applicable to reefer-equipped trucks, tractor-trailers, shipping containers and railcars for the transport of perishable goods on California highways or railways that will impact brokers, forwarders, shippers, receivers, carriers and drivers.

The regulations establish strict performance standards for trucks and trailers equipped with a 'Transport Refrigeration Unit" (TRU). Basically anyone that "arranges, hires, contracts for, or dispatches" or transports reefer equipment is subject to the new regulations. The regs impose requirements on brokers, shippers, receivers and carriers to use only reefers that comply with the Board's "TRU ATCM in-use performance standards". Violations can result in civil penalties of $1000 per occurrence.

To assist affected parties in complying with the regulations, CARB has issued a Regulatory Guidance bulletin, "Hiring and Contracting TRU-Carrier Transport of Perishable Goods on California Highways and Railways - Guidance for Brokers, Forwarders, Shippers, Receivers, Carriers and Drivers". Click on the following links for copies of the bulletin and the complete regulations.

[For the TD substitute: This bulletin and a copy of the complete regulations are available on the Council's website, www.TLCouncil.org.]

Of particular interest to brokers, freight forwarders, shippers and receivers are the following suggestions from the CARB Regulatory Guidance bulletin:

11. What are some strategies that a broker, freight forwarder, shipper, or receiver might use to make sure they only hire compliant carriers?

A. Businesses could consider sending an annual notice to carriers that only those on ARB’s 100 Percent-Compliant List will be considered for hire or contract. This notice could tell carriers to ensure that they are compliant with ARB’s TRU ATCM in-use performance standards, and maintain complete, updated ARBER registration data in order to be placed on ARB’s 100 Percent-Compliant list.

B. Businesses could include contract language in agreements between the shipper and broker or forwarder, or receiver and broker or forwarder that clearly requires only ARB-compliant TRUs to be dispatched on California highways and railways. Possible contract language to consider for this purpose follows:

“Broker, forwarder, or its agent certifies that any TRU equipment hired or furnished will be in compliance with the in-use requirements of California’s TRU regulations.”

ARB recommends highlighted or bold contract language and a space provided next to this language for the broker, forwarder, or his representative to sign, acknowledging this requirement and certifying that they will only dispatch compliant equipment on California highways.

C. When a broker, forwarder, shipper, or receiver advertises an available perishable goods load, they should specify that the load requiring refrigerated transport equipment will travel on California highways or railways and the TRU used for this load must be ARB-compliant. If posted on an on-line load board5 the equipment specification should include “ARB-Compliant TRU” so that carriers know up front that TRUs must be compliant with ARB’s TRU ATCM in-use standards.

D. Document the steps during hiring or contract negotiations with the carrier showing that the carrier was notified that an ARB-compliant TRU is required and that the carrier confirmed the contractual obligation to only dispatch ARB-compliant TRUs on California highways or railways.

a. Include contract language that clearly requires that only ARB-compliant TRUs be dispatched on California highways and railways. Possible contract language to consider for this purpose follows:

“Carrier or its agent certifies that any TRU equipment furnished will be in compliance with the in-use requirements of California’s TRU regulations.”

This contract language should be highlighted or bolded and a space provided for the carrier’s representative or its agent’s signature acknowledging this requirement and certifying that only ARB-compliant equipment will be dispatched on California highways. The bill of lading needs to include this language and certification.

b. The carrier may provide the broker, forwarder, shipper, or receiver with the ARBER certification page for the TRU, with its ARB Identification Number (IDN) clearly indicated, to show that the dispatched unit is compliant. This document may be used to show that there was a reasonable expectation that only certified-compliant TRU equipment would be used for a specific job, if the specific IDN is called out in the contract or bill of lading.

E. If a carrier is found to have violated the requirement to dispatch only ARB-compliant TRUs on California highways or railways, the broker, forwarder, shipper or receiver should take preventative steps to ensure no further hiring of that noncompliant carrier will happen:

a. The broker, freight forwarder, shipper or receiver that hired or contracted with that carrier should ensure they do not hire or contract with that carrier until the carrier can demonstrate that it is in full compliance with ARB’s TRU ATCM in-use performance standards.

b. The broker, forwarder, shipper, or receiver that hired the carrier should also evaluate whether their negotiating processes and practices are sufficient to ensure they do not hire or contract noncompliant carriers.

c. If a shipper or receiver hires a broker or forwarder that in turn hired a carrier that dispatched a noncompliant TRU, the shipper or receiver should also ensure they do not hire or contract with that broker or forwarder until the broker or forwarder can demonstrate that it has corrected its negotiating processes and practices sufficiently to ensure they will not hire or contract noncompliant carriers in the future.