NMFTA requests extension of antitrust implementation date

user-gravatar Headshot

The National Motor Freight Traffic Association and the National Classification Committee have requested the Surface Transportation Board to extend by 14 months the effective date of its recent decision terminating the agency’s approval of the NCC’s Section 5a classification-making agreement.

STB on May 7 issued a decision regarding motor carrier bureaus that would, among other things, eliminate antitrust immunity for the NCC’s classification-marking activities, effective Sept. 4. The NCC is an autonomous body of NMFTA, which provides shippers and carriers a standard on which to base pricing negotiations.

NMFTA has stated that while there is no doubt that the maintenance and development of the National Motor Freight Classification will continue, the NCC’s existing structure and procedures may require modification in order to operate without the protection of antitrust immunity. It will take time for the NCC to develop modified procedures as well as business adjustments that might have to be made by the thousands of motor carriers and shippers who presently rely on this national standard, NMFTA says.

In the NMFTA and NCC’s request to the STB, the organizations indicated that the 120-day interval between the service and effective dates of the STB’s decision is not adequate for the substantial modifications to the structure of the NCC and the development of revised classification-making procedures that have to be approved by the NMFTA membership, as well as the process of preparing a successful application for a business review letter from the U.S. Department of Justice.

For comparison purposes, the submission pointed out that there were only two instances in the NCC’s history where similarly comprehensive revisions to the structure of the classification-making entity and to the procedures by which it operates were required. The first occurred in 1948 with the initial development of the NMFTA and NCC that accompanied the application for antitrust immunity under the Reed Bullwinkle Act. The second effort was initiated in 1980 to satisfy the requirements of the Motor Carrier Act of 1980. In both of these prior instances, the restructuring of the classification-making entity and the procedures under which it operates required eight years to complete.

The request for modification of the ruling indicated that NMFTA’s member carriers and their shipper customers depend on the NMFC not only for the classes and commodity descriptions, but also the rules, packaging specifications, bills of lading, and listing of carriers. The adjustments that accompany their adaptation to a new classification system could entail having carriers modify systems that have been in place for many years and retraining personnel; similarly, shipper customers of all 1,100-plus NMFTA members would require a reasonable amount of time in order to adjust a core component of their existing systems. As a result, NMFTA is requesting an implementation date of 18 months from the issuance of the STB ruling.

“Based on all the computer systems and business practices that would need to be modified, it is clear that completion of this entire process within 120 days is not realistic,” says Bill Pugh, NMFTA executive director and NCC secretary. “We are optimistic that upon its review of the reasons why additional time is required for the completion of this complex and vitally important task, the STB will understand and grant our request.”