The Transportation Brief®
A quarterly newsletter of legal news for the clients and friends of Scopelitis, Garvin, Light, Hanson & Feary
Autumn 2024 | Vol. 31, No. 4

10 W. Market St, Ste. 1400
Indianapolis, IN 46204

Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.

Congratulations to Matthew Chinn, who began his law practice this fall as an associate in the Indianapolis office.

We are pleased to announce that Meg Hogan has joined the Firm as a Partner in the Chicago office. Her practice will focus on Highway Accident, Wrongful Death & Personal Injury Defense.

Congratulations to the Scopelitis Firm for being recognized by U.S. News & World Report. Scopelitis was named to the publication’s “Best Law Firms” list for the eleventh consecutive year. Law firms included in the list are recognized for professional excellence with persistently impressive ratings from clients and peers.

Congratulations to Sara Butler, an Associate in the Firm’s Wisconsin office, who has been appointed to a 3-year term as a member of the Ethics Committee for the State Bar of Wisconsin.

Scopelitis attorneys on the latest transportation industry news and trends.

View Dispatches

Scopelitis attorneys are often invited to participate in meetings with transportation industry leaders. Learn more about their trips this quarter.

View On The Road

10 W. Market St, Ste. 1400
Indianapolis, IN 46204

Scopelitis’ Transportation Brief® is intended as a report to our clients and friends on developments affecting the transportation industry. The published material does not constitute an exhaustive legal study and should not be regarded or relied upon as individual legal advice or opinion.

The Transportation Brief®
A quarterly newsletter of legal news for the clients and friends of Scopelitis, Garvin, Light, Hanson & Feary
Autumn 2024 | Vol. 31, No. 4

10 W. Market St, Ste. 1400
Indianapolis, IN 46204

AI in the Workplace: Legal Considerations

The enthusiastic adoption of artificial intelligence (AI) in the workplace has given rise to a cascade of applications that leverage the technology. Companies considering adopting a new AI-based software solution face decisions about which solutions to adopt and what to consider when evaluating these options. In addition to technical and functional decisions, adopting an AI solution may have legal implications because governments have increased their focus on regulating AI.

AI can be leveraged for a variety of uses within transportation, including fleet monitoring and maintenance, shipping statistics, routing programs that monitor weather and road conditions, and deep analysis of various elements of a company’s business. Contract drafting and review, and virtual “AI assistants” are two rapidly expanding applications that rely upon generative AI. . Virtual “AI assistants” can monitor meetings, record transcriptions, take meeting notes, and suggest follow-up tasks to participants.

Understanding how AI is integrated into a particular product or solution will help ensure that a company does not inadvertently increase legal exposure or risk exposing confidential information. A company implementing a new generative AI solution should consider the following:

  • What type of AI is being used? Is the AI predicting patterns, analyzing trends, or doing other complex data analysis, or is it generating a unique output based on the input provided?
  • What are the capabilities and limitations of the product? For example, contract review and drafting software may be able to “issue spot” based on the parameters you provide, or it may suggest redline language based on standard contract terms from a playbook. What can the software consistently produce, and how is it presented for the company’s use?
  • What does the software do with the data that is collected? Many AI solutions recognize that companies do not want their confidential or proprietary data used to train an AI model. The best practice is to ensure that the AI model does not store, retain, or use data in training outside your enterprise.
  • Are there any limitations based on the output that it generates? What are the terms of use of the work product created by the software? Does the software rely on or is it trained by data that may have intellectual property protections? If so, does the software provider provide protections for potential liability from this use?
  • During implementation, it is essential to provide guidelines for using AI products. We suggest a company consider the following:
    • When may generative AI be used? Are there instances where the company does not want AI to be used for some reason?
    • What processes are in place to check the work of the AI product? While AI-based products are incredibly powerful, AI is still a developing technology. Companies should establish methods to check materials produced by AI while implementing software.
    • Is AI being used for automated decision-making? AI-based products can analyze huge amounts of data to provide input on your workers and prospective job applicants. While the space remains mostly unregulated in the United States, regulators are beginning to focus on preventing bias and requiring human input in AI decision-making, especially where the decision-making impacts an individual’s job or finances. For example, the California Privacy Protection Agency has issued draft regulations that may require certain opt-out rights or other notices. Likewise, the Colorado AI Act (set to go into effect in 2026) has similar provisions regarding notice and opt-out requirements. Similar provisions are in place or being considered in other states, including Virginia.
    • How is the information shared? AI assistants and contract review platforms can quickly create a large volume of information. However, this work product may contain confidential or privileged information. Care should be taken to ensure that confidential and privileged information is protected and that strict controls on the use of AI functionality are in place to protect this sensitive data.

Changes to the ACAS Program Impacts Airfreight Forwarders

The Air Cargo Advance Screening (ACAS) program evaluates shipments for threats to aviation. Messages describing upcoming shipments are sent to the Department of Homeland Security (DHS) in advance of the cargo’s departure for the United States. This data is reviewed jointly by Customs and Border Protection (CBP) and Transportation Security Administration (TSA) personnel to identify threats.

The public regulations governing ACAS require that certain “mandatory” elements be reported in connection with air cargo moving inbound to the U.S. See 19 C.F.R. § 122.48a. CBP recently updated the ACAS Implementation Guide (IG) to state it is “strongly recommended” that ACAS filers include additional data elements regarding such shipments, including customer and party-contact information. CBP has also increased its scrutiny of cargo descriptions provided in ACAS filings.

Indirect Air Carriers and other businesses that make ACAS filings should ensure they are consulting the most up-to-date version of the IG (currently Version 2.3.3 released on October 15, 2024) to avoid possible delays when shipping air cargo.

California Limits 90-Day BIT Inspections to Large Commercial Motor Vehicles

The Governor of California recently signed Assembly Bill No. 3278, which amended California’s mandatory 90-day vehicle inspection program. Currently, motor carriers must conduct systematic inspection, maintenance, and lubrication services at least every 90 days on any California-based vehicle used to transport property for compensation. Effective January 1, 2025, only commercial motor vehicles (CMVs) with a gross vehicle weight rating (GVWR) of 26,001 lbs or more will be subject to the mandatory 90-day BIT inspection requirement. Vehicles under 26,001 lbs. GVWR are not subject to the 90-day BIT inspection but still need to comply with the federal requirement under 49 C.F.R. § 396.17, requiring annual inspections.

Ocean Shipping Disputes

The Federal Maritime Commission (FMC) has jurisdiction over certain ocean freight-related disputes, including disputes involving violations of the Shipping Act found at 46 U.S.C. Chapter 411. The FMC offers several options to pursue dispute resolution. For example, complaints about charges assessed by a common carrier can be submitted via email to the FMC through its “charge complaint” process. In response, the FMC will decide at its discretion whether to take any action, which may result in assessing civil penalties or ordering a refund of charges paid. FMC also offers alternative dispute resolution (ADR) services, which can assist with mediating the parties’ dispute. This allows the parties greater involvement in fashioning the outcome by providing them with a mechanism to resolve the matter and avoiding the issuance of any legally binding decisions by the FMC. There are two options for a party seeking a legally binding decision from the FMC. First, FMC offers a small claims complaint process whereby the parties can submit their supporting documents to the FMC and, provided there is no objection, an FMC settlement officer can decide the matter based on the submitted materials. Second, a party may submit a formal complaint to be heard and decided by an administrative law judge. This latter process can be lengthy and is more akin to traditional litigation.

Spotlight: Ocean Cargo

In today’s global supply chain, chances are that if you’re using it, a truck delivered it. However, many goods moving in the stream of U.S. commerce may well have traveled via ocean before being trucked to their destination. If you are arranging ocean transportation or transporting goods that are also moving via ocean, you need attorneys who understand the entire supply chain, not merely licenses and permits but also operational and commercial practices. At Scopelitis, our ocean transportation practice is here to help you keep goods moving through the entire supply chain.

Ocean Cargo Regulations

The regulatory landscape can be surprisingly complex for clients arranging or wishing to arrange ocean transportation directly. Air and highway transportation are generally deregulated from a commercial perspective while being heavily regulated from a safety perspective. Unlike most other modes of transportation, international ocean transportation to and from the United States remains heavily regulated from a commercial perspective, making it difficult for unlicensed entities to enjoy a “soft entry” into a business practice that may involve the arrangement of ocean transportation.

The Federal Maritime Commission (FMC) requires that any entity in the United States that arranges or even holds itself out as arranging international ocean transportation must be licensed by the FMC as an Ocean Transportation Intermediary (OTI). While non-compliance is rather common, FMC is on record as saying that because it is unlawful for an unlicensed entity to invoice a customer for ocean transportation, the unlicensed entity cannot avoid the licensure requirement by engaging a licensed entity to essentially subcontract performance of ocean transportation services. Rather, according to FMC, ocean transportation must be performed and invoiced in the name of the licensed OTI. These limitations against subcontracting, coupled with high barriers to becoming licensed (including a requirement that the applicant have an officer on staff with at least three years of ocean transportation intermediary experience), can stand as an obstacle for logistics companies that are asked to arrange ocean transportation on a limited “one-off” basis.

Types of Ocean Transportation Intermediaries

For those wishing to be licensed, there are two types of OTI: Ocean Freight Forwarders (OFFs) and Non-Vessel Operating Common Carriers (NVOCCs). Each is subject to its own set of regulations and limitations.

Ocean Freight Forwarders

By regulation, OFFs essentially act as agents of their customers, arranging ocean transportation with NVOCCs and steamship lines in the customer’s name. There is a nuance to OFF operations that can create difficulty with respect to import shipments where the forwarder wishes to operate as an OFF; specifically, by regulation, OFFs only handle exports from the U.S. In addition to regulatory hurdles, OTIs face any number of commercial issues, including the need to negotiate shipper-drafted contracts that do not take into account FMC regulations addressing how OTIs can contract for services, issues arising from disputes between buyers and sellers while goods are “on the water,” demurrage and detention charges caused by events beyond the OTI’s control, and even the difficulty of drafting default terms and conditions for transactions that will involve multiple modes of transportation across multiple countries.

Non-Vessel Operating Common Carriers

NVOCCs, on the other hand, can arrange both imports and exports but are subject to rules regarding how they can contract for services and assess charges. Both NVOCCs and steamship lines are still defined as “common carriers” under federal law. They are still generally subject to rules requiring that all shippers receive the same service levels pursuant to the same rules and charges as published in a tariff and corresponding bill of lading. There are exceptions to these tariff requirements, with some options providing more flexibility than others, but there is limited freedom of contract unless the shipper is willing to commit to tendering the NVOCC a minimum quantity of cargo, which many are not willing to do.

One option a non-OTI logistics provider may want to consider for “one-off” requests for ocean transportation is to work as the “sales agent” for a licensed OTI. This option is not necessarily ideal because the work should be performed and invoiced in the name of the licensed OTI (rather than the unlicensed party that has the direct relationship with the customer), but it can avoid regulatory foot-faults.

Who do the requirements affect?

For entities involved in the arrangement or performance of inland transportation of ocean freight moving to/from the U.S., existing operating authorities (e.g., FMCSA-issued motor carrier, broker, or freight forwarder authority) will generally suffice. However, motor carriers may be required to hold port-specific credentials or participate in the Uniform Intermodal Interchange Agreement (UIIA). Carriers accessing ports and brokers/forwarders arranging drayage moves should be aware of these requirements to avoid delays and operational disruptions. Motor carriers and logistics companies arranging drayage transportation also need to ensure good processes for tracking container free time to minimize potential exposure for demurrage and detention charges related to storage or use of intermodal equipment (or should consider contractual terms and conditions shifting the risk of such charges to customers in appropriate circumstances).

At Scopelitis, we understand that the global supply chain is interconnected and is only as strong as its weakest link. Let us help you build interconnected solutions to keep your customer’s cargo moving.

Scopelitis Quarterly Headline Roundup

A roundup of this quarter’s headlines authored by or featuring Scopelitis attorneys.

Congratulations to Matthew Chinn, who began his law practice this fall as an associate in the Indianapolis office.

We are pleased to announce that Meg Hogan has joined the Firm as a Partner in the Chicago office. Her practice will focus on Highway Accident, Wrongful Death & Personal Injury Defense.

Congratulations to the Scopelitis Firm for being recognized by U.S. News & World Report. Scopelitis was named to the publication’s “Best Law Firms” list for the eleventh consecutive year. Law firms included in the list are recognized for professional excellence with persistently impressive ratings from clients and peers.

Congratulations to Sara Butler, an Associate in the Firm’s Wisconsin office, who has been appointed to a 3-year term as a member of the Ethics Committee for the State Bar of Wisconsin.

California Trucking Association’s 2025 Annual Membership Conference

PAGA Updates

Presenters: Christopher C. McNatt, Jr.,

Chris McNatt will present on PAGA Updates at the California Trucking Association’s Annual Membership Conference, January 30, in Carlsbad, California.

January 30, 2025 | Carlsbad, CA
Transportation Lawyers Association’s 2025 Regional Seminar and Boot Camp

Good Employment Practices When Hiring/Retaining/Disciplining Drivers

Presenters: Donald J. Vogel,

Attendees: Ryan W. Wright, Robert J. Henry, Michael D. Reed, Michael J. Tauscher, Fritz R. Damm,

Don Vogel will present “Good Employment Practices When Hiring/Retaining/Disciplining Drivers” at the Transportation Lawyers Association’s 2025 Regional Seminar and Boot Camp, January 23-24, in Chicago, Illinois. Norm Garvin, Ryan Wright, Robert Henry, Michael Reed, Michael Tauscher and Fritz Damm will also attend.

January 23, 2025 | Chicago, IL
Transportation Lawyers Association’s 2025 Regional Seminar and Boot Camp

Nuts and Bolts of Cargo Claim Liability and Defenses

Presenters: Kathleen C. Jeffries,

Kathleen Jeffries will present “Nuts and Bolts of Cargo Claim Liability and Defenses” at the Transportation Lawyers Association’s 2025 Regional Seminar and Boot Camp, January 23-24, in Chicago, Illinois.

January 23, 2025 | Chicago, IL
Conference of Freight Counsel’s 2025 Winter Meeting

Cargo Claim Case Law

Presenters: Kathleen C. Jeffries,

Kathleen Jeffries will present on “Cargo Claim Case Law” at the Conference of Freight Counsel’s 2025 Winter Meeting, January 4-6, in Austin, Texas. Michael Tauscher will also attend.

January 4, 2025 | Austin, TX
Truckload Carrier Association’s 2024 Executive Leadership Online Program

Top Trucking & Logistics Law Considerations

Presenters: Gregory M. Feary, Prasad Sharma,

Greg Feary and Prasad Sharma will present “Top Trucking & Logistics Law Considerations” for the Truckload Carrier Association’s Executive Leadership Online Program, November 24.

November 24, 2024
Canadian Transport Lawyers Association’s 2024 Annual Conference

Attendees: Fritz R. Damm,

Fritz Damn attended the Canadian Transport Lawyers Association’s Annual Conference, November 14-16, in Calgary, Alberta.

November 14, 2024 | Calgary, Alberta
Women in Trucking’s 2024 Accelerate! Conference and Expo

Top 10 Legal Issues Facing Motor Carriers in 2024

Presenters: Rebecca S. Trenner, Shannon M. Cohen, Kelli M. Block, Jannie E. Steck, Caroline D. Milner, Colleen L. McCoy, Madeleine V. Baker,

Rebecca Trenner, Shannon Cohen, Kelli Block, Jannie Steck, Caroline Milner, Colleen McCoy, and Madeleine Baker presented “Top 10 Legal Issues Facing Motor Carriers in 2024” at the Women in Trucking’s Accelerate! Conference and Expo, November 11-13, in Dallas, Texas.

November 12, 2024 | Dallas, TX
Transportation Lawyers Association’s 2024 Transportation Law Institute

Attendees: Donald J. Vogel, Andrew R. Brehm, Kathleen C. Jeffries, Fritz R. Damm,

Don Vogel and Andrew Brehm attended the Transportation Lawyers Association’s Transportation Law Institute, November 8-9, in Pittsburgh, Pennsylvania.   Kathleen Jeffries attended and participated in the Executive Committee Meeting, and Fritz Damm also attended as Past President and Chair of Recruiting and Membership.

November 8, 2024 | Pittsburgh, PA
National Association of Small Trucking Companies’ 2024 Annual Conference

Steve Keppler with Scopelitis Transportation Consulting spoke on a panel session and a breakout session at the National Association of Small Trucking Companies’ Annual Conference, November 7-9, in Nashville, Tennessee.

November 7, 2024 | Nashville, TN
Transportation Intermediaries Association’s 2024 Cincinnati Regional Meeting

Presenters: Clifford W. Lauchlan,

Attendees: Braden K. Core,

Cliff Lauchlan presented at the Transportation Intermediaries Association’s 2024 Cincinnati Regional Meeting on November 7 in Cincinnati, Ohio. Braden Core also attended.

November 7, 2024 | Cincinnati, OH
2024 Federal Motor Carrier Safety Administration Registration System Modernization Meeting

Attendees: Andrew K. Light, Timothy W. Wiseman, Ryan W. Wright, Kiefer A. Light,

Andy Light, Tim Wiseman, Ryan Wright and Keifer Light attended the Federal Motor Carrier Safety Administration’s Registration System Modernization meeting, October 21, in Washington, DC.

October 21, 2024 | Washington, D.C.

Historically, Maine has imposed sales tax on the purchase price of a commercial vehicle acquired for lease, but not on the periodic lease or rental charges associated with the vehicle. In a new General Information Bulletin No. 114 dated August 27, 2024 (GIL 114), Maine Revenue Services addresses sales tax changes that impact lessors and lessees of commercial vehicles in Maine. Ron Morelock points out that effective January 1, 2025, Maine will begin to shift its sales tax to the periodic lease charges, and away from the purchase price of a commercial vehicle acquired for lease (GIL 114 indicates the lessor should present a resale certificate to purchase the lease or rental vehicle tax-free). Under the sales tax changes, Maine will impose sales tax directly on the lessee of a commercial vehicle and make the lessor responsible for collecting and remitting the applicable sales tax.


Chris Eckhart reports that as of November 18, 2024, state driver licensing agencies (SDLAs) must query the Drug and Alcohol Clearinghouse before issuing, renewing, upgrading, or transferring a commercial driver’s license (CDL). If a driver is in prohibited status, the SDLA must downgrade the driver’s CDL to prohibit the operation of a commercial motor vehicle until the driver completes the return to duty process.


FMCSA Registration System Modernization Update

On October 21, the FMCSA held its third “FMCSA Registration System Modernization” meeting providing further insight into the forthcoming changes to its online registration system. Kiefer Light reports that during this meeting, the FMCSA exhibited its first public demonstration of the new system and officially confirmed certain changes, including the use of USDOT numbers as the sole operations identifier. The confirmed changes will not be subject to additional rulemaking procedures, but the FMCSA identified multiple “contemplated changes” that will be subject to administrative rulemaking procedures, including a requirement that motor carriers make annual MCS-150 filings, requiring brokers and freight forwarders to re-register every five years, and increasing registration fees. The FMCSA is unable to commit to a firm rollout date, but advised it currently plans to implement the new system sometime in 2025. In the meantime, there will be a few significant updates to the existing URS system. Perhaps most notably, the URS registration will require an applicant’s authorized representative to verify their identify by scanning a QR Code, taking a selfie, and submitting a photo of their driver’s license. To avoid potential issues when the new system is implemented, transportation companies should ensure that information regarding officers and other entity representatives on file with the applicable Secretary of State Office and DOT record is current. Furthermore, all DOT-registered entities should ensure they have a valid DOT PIN.


On October 30, the FMCSA’s Truck Leasing Task Force (TLTF) approved a report by its Public Court Data Subcommittee, which took the position that its research made clear that the current system allowing lease-purchase agreements “is set up to continue harming drivers.” The membership of the TLTF is one-sided and largely reflects the views of the subcommittee’s chair, an economist with the Teamsters. Prasad Sharma reports that the full TLTF intends to use the subcommittee report to write a final report to be considered at future meetings. While recommendations will likely range from prohibiting carriers from entering into lease-purchase agreements to prohibiting arbitration clauses in such agreements, it remains to be seen to what extent policymakers at FMCSA and Congress will seek to implement the TLTF recommendations.


Following COVID-19, warehouses are dealing with an increase in the number of entrepreneurial businesses that need physical space to store inventories. Unfortunately, not every new business survives. According to Kevin Bennett, a business failure often means the customer stops paying its storage bills and abandons its product at the warehouse altogether. UCC Article 7 provides guidance on warehouseman’s lien rights. If a warehouse operation maintains receipts for deposits or has a warehouse agreement that includes a provision for lien rights, then UCC Article 7 entitles the warehouse to eventually sell or destroy the abandoned inventory. The lien process includes time-sensitive notice to the depositor, a public or private auction of the product, and possible coordination with junk/salvage companies to dispose of any unsold product.


Whether it is bugs, rodents or other pests, warehouses are susceptible to becoming a “home” for unwanted guests that commonly enter the facility via deposited inventory or due to a failure to properly maintain the premises. When pests are present, they can undoubtedly cause damage to inventory of any kind, which in turn, can impact shipping schedules for multiple customers and create a costly expense to replace/dispose of damaged inventory. Kevin Phillips recommends semi-annual (if not more frequent) pest inspections or exterminator services across each facility. Further, maintaining records of facility inspections, inventory-intake inspections, and ongoing premises upkeep is crucial towards refuting negligence claims arising from these infestations.


The Corporate Transparency Act (CTA) went into effect on January 1, 2024, and requires most companies doing business in the United States to file a report disclosing their beneficial owners and other information with the Financial Crimes Enforcement Network by January 1, 2025. According to Jordan Yu, there are exemptions from the CTA that may allow companies formed prior to January 1, 2024, to avoid filing these “beneficial ownership information” reports. Given the fast-approaching deadline, the Firm recommends companies act now to determine whether they are subject to the CTA or if they fall under one of the exemptions.