U.S. starts nabbing Canadian truckers on lease law

TORONTO, (May 9, 2003) — As if long border tie-ups, increased scrutiny, more paper work, and gamma ray machines didn’t already have truckers dreading a drive to the border, some U.S. jurisdictions are starting to enforce on Canadian truckers a once largely-ignored law that requires carriers only use owner-operators if there is a lease between the two.

The Ontario Trucking Association is warning carriers about CFR49 sections 376.11 and 376.12, which have been on the books for years. The law requires the carrier and the owner-operator to carry a copy of the lease in the vehicle at all times, or carry a statement prepared by the carrier certifying that the equipment is being operated by the carrier. This statement must show the name of the carrier, the date and length of the lease and the address where the original lease is being kept by the carrier.

While this would not appear to be an undue burden for carriers, section 376.12 also prescribes the conditions for the lease, which must contain the following elements:

— The carrier must have exclusive possession and assume full responsibility for the operation of the vehicle for the duration of the lease.

— The compensation to the owner-operator must be clearly stated; the responsibility for fuel, fuel taxes, empty mileage, permits of all types, plates and registration fees, detention and accessorial services, loading and unloading, and overweight fines shall be clearly stated.

— The payment period must be less than 15 days.

— The manner in which charge back items are to be accounted for must be clearly stated.

— Insurance coverage shall be the responsibility of the carrier, although this may be charged back.

— If escrow funds are required, those items to which it can be applied must be stated, an accounting of the escrow funds must be provided and interest must be paid on the escrow funds, and the funds must be returned to the owner-operator no later than 45 days after termination of the lease.

The fact that the law has not been enforced, or that some Canadian carriers may not have been complying with it, is not a defense, the OTA warns. To avoid problems, carriers should consult with their U.S. legal advisor to develop an affidavit to satisfy the requirements.