Broker transparency rulemaking coming, FMCSA says

The Federal Motor Carrier Safety Administration plans to initiate a rulemaking regarding broker transparency, according to the agency’s administrator.

In a recent letter from FMCSA Administrator Robin Hutcheson to the Owner-Operator Independent Drivers Association, she wrote that the agency will open a rulemaking to consider amendments to current broker 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.

After OOIDA filed its petition in May 2020, FMCSA made a request 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.

However, FMCSA hadn’t announced a decision on whether or not to start a broker transparency rulemaking until now.

“FMCSA has determined that OOIDA’s petition contains adequate justification to initiate rulemaking on this matter,” Hutcheson wrote. “FMCSA will open a rulemaking proceeding to consider amendments to CFR 371.3(c).

While a rulemaking will be initiated, FMCSA said there is no guarantee that a final rule will be adopted.

“The decision to grant the petition and commence a rulemaking proceeding does not mean the regulatory changes in question will ultimately be adopted,” Hutcheson wrote. “FMCSA determines whether a proposed provision is adopted as part of a final rule on the basis of all available information developed in the course of the rulemaking process, including public comments received on its proposals, consistent with statutory criteria.”

FMCSA did not provide a timeline of when a notice of proposed rulemaking on broker transparency is expected to be published.

FMCSA’s announcement to start a rulemaking comes as issues regarding brokers have been heating up.

Earlier this month, OOIDA sent a letter to FMCSA asking for an update on its nearly 3-year-old petition.

“It’s past time for FMCSA to grant the petition and promote broker transparency,” OOIDA President Todd Spencer wrote in the March 16 letter. “Not only will access to these documents protect the public by providing a marketplace in which each party behaves in a clear and transparent manner and will also give motor carriers better protections when there are claims or disagreements with brokers.”

Although FMCSA hadn’t responded to the petition, it has issued a pair of notices regarding brokers.

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.

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

Earlier this month, FMCSA announced it will host a public listening session on broker issues on March 31 at the Mid-America Trucking Show in Louisville, Ky. The agency also extended the comment periods on both of its broker notices through April 6.

OOIDA is encouraging its members to comment on the broker financial responsibility notice.

“FMCSA has proposed modifications to broker and freight forwarder financial responsibility requirements,” OOIDA wrote to its more than 150,000 members. “The goal of this proposal is to crack down on brokers and other financial entities that let claims from motor carriers accrue against the minimum $75,000 broker bond. However, the processes outlined in the notice of proposed rulemaking that could help mitigate the need to initiate interpleader proceedings and alleviate the concern of broker non-payment of claims are not satisfactory to accomplish those objectives.” LL