It’s not uncommon for STC to take calls from motor carriers facing audits from the Federal Motor Carrier Safety Administration. On the other side of the line is usually a bewildered individual worried about what could be an existential threat to their business. They’re not wrong. FMCSA can, and occasionally does, put motor carriers out of business following a compliance review. This is the exception, though – not the rule.
When we describe what it takes to be shut down by FMCSA, there’s audible relief on the other side of the line. Quickly, their attention turns to possible financial penalties which, with slim margins, can also feel existential. They’re usually not.
Let’s look at the numbers. Based on the most recent publication of Revisions to Civil Penalty Amounts, in 2024, the largest penalty FMCSA can dole out for a single violation is $225K, which they can assess for violations of HazMat and Safety Permitting Regulations that results in serious illness, severe injury to persons or destruction of property. The least expensive violation is $387 for a first violation of tariff rules. Within that range, FMCSA investigators have notable flexibility in applying the fine schedule. In one example, FMCSA can assess a penalty for violating HazMat training rules between $582 and $96,624.
All this sounds pretty scary, by design. Of course, penalties rarely rise to these frightening maximum limits, in part, because federal statute requires that FMCSA consider a list of factors that may reduce the fine including the nature and circumstances of the violation, the degree of culpability and, importantly, the effect the fine would have on the carrier’s ability to continue to do business. On top of this, motor carriers are given the opportunity to negotiate the fine down.
So, how does this come out in the wash? Well, in 2023, FMCSA closed 3,650 cases on non-hazmat motor carriers with a fine assessment between $150 and $251,000. The average value was $6,763. For most of those worried callers to our offices, this fact is often met with a significant sigh of relief.
So, what’s the takeaway? As a deterrence, $6,000 does not sound too scary. Of course, for the owner operators and independent contractors among us, a $6,000 fine could mean their next truck payment. It’s difficult to balance deterrence with the important educational elements that make audits effective and calibrating these fines is one way to do that. A better way may be averting violations by implementing the long-delayed new entrant carrier education program and proficiency assessments. But we digress; our opinion on that is a topic for another time.