Broker transparency rulemaking delayed

Truckers who were hoping for the Federal Motor Carrier Safety Administration to take immediate action regarding the lack of broker transparency received some bad news this week.

After previously targeting this past June as the date for a notice of proposed rulemaking to address the issue, a new report says FMCSA’s proposal isn’t expected until Oct. 31, 2024.

The Owner-Operator Independent Drivers Association, which represents small-business truck drivers, criticized FMCSA’s lack of urgency. OOIDA has spoken out about the lack of broker transparency in the industry for decades and formally petitioned the agency to take action in 2020.

“The continued delay is BS – transparency has been required since 1980,” OOIDA President Todd Spencer said. “FMCSA stated in March 2023 the timeframe would be announced in the upcoming unified regulatory agenda. The agenda indicated June, and now they’ve inexplicably delayed more than a year. The public docket from our petition as well as the listening sessions they’ve held provided an abundance of material to produce a meaningful proposal by now.”

He added that FMCSA is completely aware of the rampant broker fraud that continues to take advantage of truckers and that the agency should be expediting this proposal and doing anything else it can to stop fraudulent activity. He said hundreds of thousands of small-business truckers simply are trying to put food on the table, and FMCSA has – once again – turned its back on hardworking American families.

FMCSA said it is still committed to moving forward with a rulemaking and will work toward publishing a proposal before October 2024. No explanation was provided for the significant delay.

OOIDA petition

OOIDA petitioned FMCSA in 2020 to begin the rulemaking process for more transparency in trucking transactions with brokers.

OOIDA’s 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 carriers 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 asked the agency to begin enforcing that regulation and to eliminate any loopholes that allowed brokers to sidestep the rule. The Small Business in Transportation Coalition also petitioned the agency.

Petition granted

FMCSA granted OOIDA’s petition in March and hosted a listening session on the topic that same month at the Mid-America Trucking Show in Louisville, Ky.

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.”

In May, FMCSA Administrator Robin Hutcheson told Land Line Now that the agency was working “very intently” on the broker transparency issue and that a rulemaking would be coming soon. Then in June, the U.S. Department of Transportation’s Spring 2023 Unified Regulatory Agenda stated that FMCSA planned to publish a broker transparency notice that same month.

After June and July passed with no notice, OOIDA told FMCSA in August that there was no more time to waste.

“Since the agency’s rulemaking announcement in March, instances of rampant broker abuse and fraud persist,” OOIDA wrote. “Motor carriers are victimized through unpaid claims, unpaid loads, double-brokered loads or load-phishing schemes on a daily basis. If broker transparency regulations and enforcement can be improved, then disputes between motor carriers and sureties will be reduced, there will be less need for litigation, less need for FMCSA intervention and the economic health of the broker/motor carrier component of the transportation industry will be stronger.”

Now, the timeline has been delayed until late 2024.

What’s next?

If FMCSA sticks to its target date of Oct. 31, 2024 to release a notice of proposed rulemaking, it would likely be well into 2025 before the comments are received and reviewed. At that point, FMCSA would then decide whether or not to move forward with a final rule. Considering the speed of government, it could be 2026 or later before a rule would take effect.

It also is unclear what exactly FMCSA will propose and whether it will effectively address the problems cited by OOIDA and truck drivers. LL