Broker notices to be focus of FMCSA public listening session

Truck drivers will soon have an in-person opportunity to tell the Federal Motor Carrier Safety Administration how broker issues should be handled.

The FMCSA will host a public listening session regarding the regulation of property brokers on March 31 at the Mid-America Trucking Show in Louisville, Ky. The notice of the public listening session is scheduled to publish in the Federal Register on Wednesday, March 8.

In addition, FMCSA is extending two comment periods regarding broker issues.

Financial responsibility requirements

In January, FMCSA published a notice of proposed rulemaking about modifications to broker and freight forwarder financial responsibility requirements. Prompted by 2012’s Moving Ahead for Progress in the 21st Century Act, FMCSA previously implemented a requirement to increase the financial security amount for brokers to $75,000.

“The agency proposes regulations in five separate areas: Assets readily available, immediate suspension of broker/freight forwarder operating authority, surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency, enforcement authority and entities eligible to provide trust funds for form BMC-85 trust fund filings,” FMCSA wrote in the notice.

FMCSA’s comment period on the notice was set to be open through March 6, but the agency now plans to accept public comments through April 6. The agency said it is extending the comment period in anticipation of the public listening session at MATS.

Comments can be made by clicking here, or by going to the Regulations.gov website and entering Docket No. FMCSA-2016-0102.

Definitions of brokers and bona fide agents

FMCSA also published a notice last year asking for feedback regarding how brokers and bona fide agents should be defined to inform its guidance.

“The guidance must take into consideration the extent to which technology has changed the nature of freight brokerage, the role of bona fide agents and other aspects of the freight transportation industry,” FMCSA wrote in its notice.

The agency used the feedback it received to issue interim guidance this past November. FMCSA is now reopening the comment period through April 6 and plans to publish final guidance by June 16.

According to the interim guidance, FMCSA clarified only one area of the definition of a broker: the relevance of an entity’s handling of funds in a transaction between shippers and motor carriers.

“After consideration of the stakeholder comments and the important role of financial responsibility in broker regulation, FMCSA wishes to clarify that handling money exchanged between shippers and motor carriers is a factor that strongly suggests the need for broker authority, but it is not an absolute requirement for one to be considered a broker,” the agency states.

The Owner-Operator Independent Drivers Association has said the definition of a broker is not the source of the problem.

“In our opinion, the current definition provides sufficient clarity to distinguish between brokers, bona fide agents, and dispatch services,” OOIDA wrote in comments. “It is not the definition of a broker that constitutes potential problems but rather how the business itself operates.”

Comments regarding the broker definition notice can be made by going to the Regulations.gov website and entering Docket No. FMCSA-2022-0134.

Broker transparency

The discussion regarding brokers heated up in 2020, when OOIDA petitioned the agency for more transparency in transactions with brokers.

OOIDA’s petition asks the agency to:

• Require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed.
• Prohibit brokers from including any provision that requires a carrier to waive their rights to access the transaction records.

Regulation CFR 371.3 already requires that brokers keep records of each transaction with a carrier and that each party to the transaction has a right to view these records.

“OOIDA’s recommendations to enhance compliance with 371.3 are not attempts to control rates or impose burdensome requirements but would simply ensure that motor carriers have access to documents they have the right to view,” the Association wrote.

FMCSA opened OOIDA’s petition for comments in August 2020. Later that year, FMCSA held a listening session regarding broker issues. Then in November 2020, the Transportation Intermediaries Association petitioned the agency to eliminate the transparency requirements. In all, nearly 1,500 comments were filed to the broker transparency-related dockets.

The agency is expected to respond to the petitions this year.

Broker discussions at MATS

FMCSA is scheduled to hold its public listening session on broker regulation at 10 a.m. Eastern on Friday, March 31 in room B104 of the Kentucky Expo Center.

OOIDA’s Gary Wright is planned to provide advice on how to deal with brokers during a seminar at 9:45 a.m. Eastern on Saturday, April 1 on the ProTalks Stage in the East Hall.

A complete schedule of MATS events can be found here. Registration for the truck show is open. LL