Effective transportation management can be a hassle. Transportation managers must keep up with the ship dates of inventory, where inventory is currently located in the transportation process, what insurance information is being used and appropriated for each shipment, and many more factors. Now, that’s not even counting the dozens of registration numbers and tracking numbers that must be meticulously kept up with and found and used on documents A, B, and C, but a different number is needed for the second page of document B and document E when properly vetting carriers. However, the Federal Motor Carrier Safety Administration has found what could be a potential solution to these problems: the Unified Registration System. Many logistics providers and entities in the transportation management industry are unsure of what exactly the final rule on the URS means and how it affects business on a daily basis. Let’s take a look at what this rule does, why it’s going into a fact, how it will affect the existing fleets, and its implications for the future of transportation.
What Is the Unified Registration System?
Unified registration system (URS) refers to an online platform for tracking all information about entities in the transportation and logistics Industries, explains Todd Bryant. All freight forwarders, freight brokers, motor carriers, which includes private and for-hire motor carriers of passengers and freight, IEPs, and cargo tank manufacturing and repair facilities under the jurisdiction of the FMCSA are going to be required to register with this platform. Historically, entities were able to obtain an MC number for the purposes of collecting and storing information. However, this new system will eliminate all of the miscellaneous numbers and replace them with a single, unchanging USDOT number. Furthermore, all transportation and logistics providers and entities must have this number on or before September 30, 2016, reports the FMSCA.
Why Is the Unified Registration System Being Created?
Throughout the last 18 years, the Federal Motor Carrier Safety Administration (FMCSA) has created exceedingly complex systems for monitoring each transportation management company. Previously, the identification measures for each management company or entity have commonly been an MX, FF, or MC number. Unfortunately, this has led to an unprecedented level of confusion for transportation providers and shippers, and in some cases, it has provided a way to generate a smokescreen to allow companies with a history of unethical or illegal business practices to set up operations by creating a new number.
It would be unethical for us to suggest most transportation providers have been abusing the system for ill-suited purposes. However, a few bad apples can spoil the whole bunch, and the FMCSA wants to eliminate the possibility. As a result, logistics providers and businesses who conduct transportation management in-house will be able to more easily track all of their processes, which also includes insurance information, hazardous material information, and injunctions against the company, asserts the Federal Register.
The URS will be a single way to access the complete history of a given company. This goes back to simplifying transportation management across the board to improve the state of the logistics’ economic sector.
How Will the Unified Registration System Impact Existing Transportation and Logistics Providers?
For pre-existing logistics entities, the URL won’t be much of a change. All new applicants after December 12, 2015 are required to use the URS online registration application, explains the FMCSA. However, transportation and logistics providers who have existed prior to the final rule on the URS may feel a bit of uncertainty as to what will happen.
For existing providers, the deadline to register with the system is September 30, 2016. Transportation management entities who do not currently have proof of insurance or financial registered in this system are required to provide it by December 31, 2016.
Current carriers may also have concerns about how changing from an MC number to the USDOT number in the Unified Registration System will impact their fleets. The FMCSA has made the rule somewhat lenient by allowing existing entities to continue operating vehicles and display the existing MC number. However, any newly purchased vehicles must display the new Unified Registration System number on them, not the organization’s previous MC number. Furthermore, any vehicle that undergoes maintenance, repair, or a paint job is highly encouraged to replace the MC number with the appropriate USDOT number in the Unified Registration System.
How Will the Change Impact the Future of Transportation Management?
A business, entity, or provider cannot simply avoid registering with the Unified Registration System if they are a transportation provider. However, this rule represents another painstaking, yet simple process in shipping, tracking, and documentation management. For small to medium-sized shippers, this is another metric that is going to be required to be obtained, but may simplify the overall process. But, as we experience regulatory changes, outdated in house processes may make this change hard for a shipper to handle. Outsourcing transportation management by partnering with a 3PL focused on transportation management would eliminate the misunderstanding of how to properly vet carriers and other transportation providers, which translates into not having to deal with potential fine, penalties, or other injunctions against the company for failing to maintain and meet the responsibilities of the URS who is carrying your precious freight you expect to arrive at your customers’ locations without a hitch.
The implications of this rule extend beyond the current requirements. The FMCSA hopes to make information within the URS available publicly. This would eliminate the potential dissent from watchdog groups and help improve visibility for transportation entities. From our previous discussions on visibility, increasing visibility is tantamount to ensuring a better response from customers.
The unified registration system seems like another power grab by the Federal Motor Carrier Safety Administration. In reality, the goal is to streamline the registration process and eliminate problems for entities in the transportation and logistics sector. For example, entities will no longer need to track separate docket and hazmat transportation numbers.
All information will be tied into a single, definitive system, which will consequently eliminate unfair competitive advantages for providers and entities who have engaged in unethical, illegal business practices and avoided punishment under the FMCSA’s previous guidelines. The Unified Registration System is not something to fear, but something to recognize as important and beneficial to the industry as a whole.