Broker transparency essential, OOIDA says
Amending broker transparency regulations can allow truckers to “achieve economic benefits,” according to official comments submitted by the Owner-Operator Independent Drivers Association.
OOIDA submitted comments on Oct. 13 to the Federal Motor Carrier Safety Administration about petitions for rulemaking regarding broker transparency. OOIDA answered eight key questions asked by FMCSA, covering such topics as statutory authority, enforcement, broker size threshold, and how truckers and carriers would benefit economically.
Comments will be accepted until Nov. 18, and a listening session on the topic was scheduled for Oct. 28. FMCSA’s actions were prompted by a petition filed by OOIDA in May that sought more transparency with brokers.
According to OOIDA’s comments, original broker regulations established 85 years ago had the objective “to protect the public’s interest in an ‘adequate, economical, and efficient’ motor carrier transportation system free from the ‘unjust discriminations’ and ‘destructive competitive practices’ of unscrupulous middlemen.” The Interstate Commerce Commission confirmed that 45 years later with broker transparency revisions. Since then, nothing has changed to suggest broker transparency is no longer needed.
“Broker contracts designed to help brokers avoid compliance with the disclosure requirements under Section 371.3 undermine the explicit public policy objectives passed by Congress and since implemented by various agencies,” OOIDA said. “Noncompliance undermines the goals of a secure transportation system. Therefore, it is part of the agency’s mandate to ensure that brokers do not avoid their legal responsibilities by contract or by imposing unreasonably burdensome disclosure conditions.”
Enforcement of proposed broker transparency amendments
Current statute gives FMCSA the authority to promulgate rules governing brokers for the protection of motor carriers, OOIDA said. Additionally, the agency has general authority to investigate a violation of broker rules. FMCSA can suspend, amend or revoke a broker’s authority if it willfully violates regulations. It can even file civil action, if needed.
“Through our petition, we are not asking FMCSA to exercise any of its other plenary authority over brokers, except to amend an existing rule,” OOIDA said. “Nor would OOIDA’s proposed rule expand FMCSA’s current responsibility to enforce its rules.”
Broker transaction information
OOIDA’s petition requests brokers to provide information to motor carriers automatically and electronically.
Providing information to carriers can be accomplished using a variety of methods, including forms of communication brokers already use to interact with shippers and carriers. Such methods include email, digital photos/scans, and smartphone apps. OOIDA is not opposed to brokers reaching partnerships with others to comply with transaction information requests. However, the Association cautioned that such a method must provide timely compliance and not allow brokers to use that partnership to skirt broker transparency responsibilities.
Economic benefits of broker transparency
Motor carriers would save time and money by receiving the required information in a timely and convenient manner via electronic transmission instead of being forced to visit the broker’s physical office location, OOIDA said. Also, brokers would not be able to retaliate against carriers requesting information, OOIDA said. There have been claims of carriers being put on a “do not use” list from brokers after requesting information.
“Improving and enforcing broker transparency would also help motor carriers make better informed decisions about which loads they choose to haul and which brokers they choose to haul for,” OOIDA said. “Too often, motor carriers have to rely on the word of brokers informing them of rates and percentages, and motor carriers end up getting shortchanged.”
OOIDA refuted claims from brokers that they can incur costs of $2,500 to $10,000 per carrier to comply with the proposed rules.
If more broker transparency rules are adopted, the industry and free market will award brokers that comply with the regulations, OOIDA suggested.
“OOIDA has long pushed for greater transparency in transactions with brokers and supports FMCSA’s initiative to bring much needed improvements to broker regulations,” OOIDA said. “When rates are on the decline, many truckers are concerned they’re the only ones feeling the pain – or at least feeling a disproportionate share of the pain. This will not change until federal regulators enhance and enforce the broker transparency regulations listed in Section 371.3.” LL