Broker transparency issue takes over FMCSA listening session

March 31, 2023

Mark Schremmer

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LOUISVILLE, Ky. – A Federal Motor Carrier Safety Administration listening session on broker financial responsibility requirements turned into an impassioned cry for transparency in broker transactions.

FMCSA held a public listening session on Friday, March 31, at the Mid-America Trucking Show to discuss two active notices related to brokers. The notices involved surety responsibilities and how the agency should define a broker.

However, the majority of the hourlong meeting focused on a petition from the Owner-Operator Independent Drivers Association that asked FMCSA to enforce existing broker transparency regulations.

OOIDA petitioned FMCSA in May 2020, asking the agency to begin the rulemaking process for more transparency in trucking transactions with brokers. The petition asked 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.
  • To explicitly 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.

In March, FMCSA notified OOIDA that it had granted the petition and would soon be publishing a rulemaking regarding broker transparency. The agency also granted a petition from the Small Business in Transportation Coalition. At the same time, FMCSA informed the Transportation Intermediaries Association that it was denying its petition to eliminate CFR 371.3.

Many truck drivers used the listening session to inform FMCSA about the existing problem and to urge the agency to start enforcing the existing regulations.

“I see (problems with broker transparency) in our office every single week,” OOIDA Executive Vice President Lewie Pugh said. “One big broker, in particular, is guilty of this but from others as well. Our guys are getting chargebacks after they go to a customer and get a clean bill of lading and leave. A week or two later, they get a bill saying there’s a claim, and they always charge an even number like $500 or $1,000 … Because they don’t have broker transparency, they don’t even have to tell what the charge is for … The sooner we can take care of these things, the better it will be for everybody.”

 

OOIDA's Lewie Pugh at the FMCSA listening session at MATS 2023
OOIDA’s Lewie Pugh told FMCSA representatives why broker transparency is needed at MATS 2023. (Photo by Staff Writer Ryan Witkowski)

 

Truck driver Lee Schmitt Jr. said that this is not an attempt to control broker pay. Instead, knowing how large of a cut the brokers are taking will improve fairness.

“It just needs to be transparent,” Schmitt said. “We don’t need you to regulate their pay. We just want to see it. We can fix the industry ourselves.”

Truck driver Daniel Koors has been fighting the broker transparency issue for years. Koors was among a group of truck drivers in May 2020 who traveled to Washington, D.C., to give the problem attention.

“You have the power to change this,” Koors said. “You have the power to tell the brokers that they have to follow the guidelines. That’s what we’re asking for. This has been on the books since the Green Book (Federal Motor Carrier Safety Regulations Handbook) has been in existence. What we need is your help in making sure that brokers follow the rules. We don’t need you guys to set rates. We don’t need you to set who makes profit and who doesn’t. By giving us that transparency, we can go in the next time and negotiate a fairer rate.”

What’s next?

FMCSA did not provide a time frame for when it will issue a broker transparency rulemaking. However, FMCSA’s Larry Minor said the next Unified Regulatory Agenda should be published in the coming weeks, and a target date should be unveiled at that time.

FMCSA’s comment periods regarding broker financial responsibility requirements and the broker definition will be open through April 6.

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

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