Startling Number of Carriers Red Flagged Each Year

Chameleon Carriers

Chameleon Carriers A recent investigation by KSHB TV revealed that a startling number of potential chameleon carriers were red flagged for further investigation.

KSHB took an in-depth look at four Kansas City- area carriers that all had their own DOT numbers and were all owned by the same man or had the same address.  Closer investigation also revealed that the same man, Binder Singh, owned another company called Royal Transport, INC., that had been placed of out of service in 2008 for failure to pay fines stemming from safety violations and failure to maintain logs.

Singh filed bankruptcy and shut down the company.

A short time later, Singh opened another company, Freight, Inc., got a new DOT number and began business with a clean record.

KSHB took their findings to the FMCSA.  In response, the FMCSA said the agency is now investigating the allegations, and in January, the FMCSA issued an Out of Service and Record Consolidation Order to Singh.  The order listed all four of Singh’s companies.

According to KSHB, in 2010, the DOT red flagged 1, 136 companies as possible chameleon carriers, because the companies have similar names of owners and/or employees, or similar addresses of carriers that have been placed out of service.

The Government Accountability Office (GAO) reported, “18 percent of the applicants with chameleon attributes were involved in severe crashes compared with 6 percent of new applicants without chameleon attributes.”  GAO released 61-page report on the FMCSA’s current program for vetting potential chameleon carriers.

According to the report, the purpose of the FMCSA audit was to examine:

(1) the prevalence of chameleon carriers

(2) how well FMCSA’s investigative programs are designed to identify suspected chameleon carriers

(3) what constraints, if any, FMCSA faces in pursuing enforcement actions against suspected chameleon carriers.

Currently, FMCSA conducts a two-step process for vetting potential chameleon carriers:

First, FMCSA uses a new applicant screening algorithm to electronically compare and match information contained in the carrier’s application to data for poorly performing carriers dating back to 2003.11 This match information is used by a dedicated team (called the vetting team) as indicators for further investigation.

• Second, the vetting team reviews each new for-hire passenger and household goods carrier’s application for completeness and accuracy and takes additional steps to determine whether the applicant is a chameleon carrier. For example, the team compares information in the application to information available on the Internet, including a carrier’s address; phone number; public filings with the state (e.g., articles of incorporation); and, if available, the company website. The vetting team also works with FMCSA division offices to take advantage of local officials’ knowledge of individual carriers.

Confusion over authority has muddied the waters and made it more difficult for the FMCSA to weed out potential chameleon carriers.

“FMCSA faces several constraints in pursuing enforcement actions against suspected chameleon carriers. As a result of a 2010 decision by an FMCSA Assistant Administrator, it is not clear whether a state or a federal legal standard should be used by FMCSA to demonstrate that a carrier is a chameleon,” the GAO report states. “This uncertainty can lead to differing enforcement actions across states and has increased the time necessary to pursue chameleon carrier cases. Other constraints include a resource-intensive legal process and limitations in FMCSA’s enforcement authorities. FMCSA is pursuing options to address these constraints.”