FMCSA to end MC numbers, overhaul registration system to stamp out fraud

The Federal Motor Carrier Safety Administration on Thursday at the Mid-America Trucking Show in Louisville, Ky., admitted its system for motor carrier, broker and freight forwarder registration and updates had fallen behind and in part enabled rampant fraud, while pledging to completely overhaul its verification processes and improve the “customer experience.”

The changes include ending MC numbers and using USDOT numbers as the sole identifier for carriers, brokers, forwarders and others, and also would require some work on the carriers’ part. 

“Obviously, we’ve had our registration system in current form for many years,” said Tom Keane, associate administrator of the Office of Research & Registration at FMCSA. “It was robust when it was originally designed, but it’s become very dated over the years and we need to modernize.”

Overdrive reporting has revealed significant violations of regulations — such as those governing carriers’ principal place of business — in the system. Hundreds of carriers have registered at a single address, for instance, even employing an email address in one particular case, [email protected], that appeared to mock the agency. When Overdrive queried FMCSA about those violations last year, the agency hinted at coming changes to the system.

[Related: ‘WTFFMCSA’: Carriers mocking the agency through its own registration system?]

Now, an outline of the proposed changes has taken place. Much of the details await finalization, and many will have to wait for a full rulemaking process to take place through publications in the Federal Register, where industry stakeholders can comment. Furthermore, FMCSA plans to hold an “industry stakeholder day” on May 29 to communicate the changes and gather feedback. 

The changes are aimed mostly at security and fraud prevention, which Ken Riddle, director of the Office of Registration and Safety Information at FMCSA, repeated on every slide of his presentation. 

“Freight fraud is at an all-time high,” said Riddle. “Every corner of the industry is experiencing fraud, whether on the carrier side, the broker side, you name it. We’ve heard from carriers and from the trade press asking ‘What can you do to help?’ We heard you, we’re listening, and we’re going to help.”

kenneth riddle fmcsa registration system updateFMCSA’s Ken Riddle struck a conciliatory tone, admitting the organization “desperately needed” an update to better protect carriers.Todd DillsFMCSA plans, in short order, to implement identification and business verification tools into the registration system, not allowing registrants to proceed until they’ve proven their identity and that their business exists and is registered with the IRS or the state.

Near-term changes, some already implemented, include no longer sending PIN numbers by electronic communication, instituting multi-factor authentication, and contracting out verification services to industry-leading firms. 

“We’re going to hire the best,” said Riddle. “That will help mitigate the fraud.”

These changes will impact all new applicants, but “also we’re going to run all existing registrants, everybody in our database, over 800,000 entities,” he said. “If they don’t go through with it or refuse to or don’t pass, we’ll start with revocation proceedings. We’re going to clean up the bad actors.”

[Related: The double brokering slow burn: How it happens, and how to fight back against it

Riddle promised these initial steps “in the next 90 days,” to start rolling out in segments of the registered population. “We can’t wait on a new registration system,” he said. “We need to do it just as soon as we possibly can to mitigate fraud and protect you.” 

For example, carriers using a registered agent as a principal place of business (PPOB) will have that address checked in real time and, hypothetically, might have their application rejected or flagged for correction. That, in theory, would take care of or improve the registrations of those WTFFMCSA carriers.

A larger overhaul of the registration system that will ask carriers questions and lead them to the correct form, while verifying information in real time, should come online by the start of fiscal year 2025, or October 1.

“No hazmat questions if you didn’t ask about hazmat,” Riddle gave as an example. “If we’ve asked you for an address and name, we don’t want to ask you to fill it in again,” noting that the current system makes applicants answer that question up to four times. 

Riddle expects FMCSA’s changes to ripple through load boards and other industry platforms in short order. “Six months ago, fraud prevention wasn’t our priority,” said Riddle. “Today, it is. Because we heard from you and the industry how bad it is and how much it’s needed.”

FMCSA plans to eliminate the MC number and turn USDOT numbers into the sole identifier for entities in the system, as well as eliminating arbitrary wait times and instituting a system that processes paperwork over the weekend and holidays automatically. 

ken riddle tom keane fmcsa new registration system.Ken Riddle (left) and Tom Keane (right) of FMCSA talk updates to the registration system.Todd Dills

Now, entities in the system will have an account. Failure to fill out MCS-150 or pay UCR fees will result in the USDOT number going inactive. From now on, FMCSA expects carriers’ contact information, phones and emails to be actively monitored. 

“We don’t have that capability now, but we want to get a good email and a good telephone number to reach out about a change or update,” said Riddle. “I want to be able to hit a button and speak to all third-party service providers or hit a button and talk to all hazmat carriers.”

FMCSA will reach out to existing entities about the changes, and if carriers or anyone else have doubts about the authenticity of communications on the subject, they should reach out to an FMCSA field office as to not fall for many agency impersonation scams that routinely plague those with authority. 

Blanket companies (BOC-3s) will get accounts in the system, which entities can enter in to allow the BOC-3 to complete the forms for them. 

[Related: FMCSA authority-revocation anomaly: Blanket BOC3 companies cleared out]

Riddle shared a mock up of the new website and gave a brief demo of how the system would work. The new system should work in mobile-responsive form as well. 

“This is a good example of a win-win,” said Keane. “You might not believe me because I’m from FMCSA, but we really do embrace those things that are good for business and safety.”

Carriers in attendance briefly surveyed by Overdrive seemed positive on the developments, and Overdrive will continue to update readers on the changes as they take shape.