FMCSA requests more comments on TIA’s broker transparency petition

The Federal Motor Carrier Safety Administration is seeking more comments on the Transportation Intermediaries Association’s petition to eliminate federal broker transparency regulations in a new docket to be published on Nov. 25.

On Tuesday, Nov. 24, FMCSA filed TIA’s petition for rulemaking in the Federal Register. FMCSA is seeking public feedback on the petition. The docket will not go live until Wednesday, Nov. 25, when the 60-day comment period will begin.

To submit comments, click here. Once the docket goes live, a “Submit a Formal Comment” green button near the top of the page will be available. Click the button, and a comment form will appear. The docket number for this petition is FMCSA-2020-0194.

FMCSA is looking for comments more directly related to the broker and shipper aspect of the broker transparency regulations. Specifically, FMCSA is seeking answers to seven questions regarding TIA’s petition.

1. To what extent would brokers’ disclosure of the records of individual transactions to individual motor carriers under 49 CFR 371.3(c) place brokers and their shipper clients at risk of having proprietary information concerning freight descriptions, transportation rates and routes disclosed to their competitors?
2. For authorized brokers, how often do motor carriers exercise their right under 49 CFR 371.3(c) to review the record of the transaction, and are there motor carriers who make requests on such a frequent basis that they could, if working with other motor carriers, learn certain proprietary information concerning shippers’ rates and routes?
3. In the absence of 49 CFR 371.3(c), what information concerning brokered transactions would authorized brokers share with the shippers and for-hire carriers?
4. To what extent do shippers engage in discussions with brokers about the rates the authorized motor carriers will be paid?
5. How often do shippers enter into negotiations about interstate transportation services with an entity that is neither an interstate motor carrier registered with FMCSA nor a broker registered with FMCSA?
6. Would the issuance of regulatory guidance concerning “dispatch services” provide an effective deterrent to unauthorized brokerage services, or would additional actions by FMCSA be required to address the challenges described by TIA?
7. Is there sufficient clarity in the current definitions of “broker,” “bona fide agents,” and “brokerage or brokerage service” under 49 CFR 371.2 to enable interested parties to identify dispatch services that are actually carrying out the functions of a registered broker and to file a complaint with FMCSA for subsequent investigation?

TIA’s petition was included in Docket No. FMCSA-2020-0190, which was for the broker transparency listening session.

The new docket essentially isolates TIA’s petition in order for FMCSA to drill down to issues more relevant to the petition as opposed to broker transparency in general.

In its petition, TIA is requesting FMCA to eliminate 49 CFR 371.3(c), which is the federal regulation regarding broker transparency. The association claims that the spot market is among the most transparent marketplaces in the world. Load boards, the internet and rate quotes in person-to-person communications within the industry provide the transparency that the regulation intended, rendering it obsolete, TIA argues.

Furthermore, TIA wants regulatory guidance concerning dispatch services. Specifically, the association claims some dispatch services are unlicensed brokers that do not meet statutory requirements. Further explanation regarding the legal duties of a dispatch service would require many of those companies to acquire a broker license, TIA contends.

Meanwhile, the Owner-Operator Independent Drivers Association has a competing petition on the docket.

That petition asks FMCSA to further enforce the regulation that TIA wants to eliminate. OOIDA’s petition proposes the following:

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

Also, OOIDA wants FMCSA to require brokers to keep a record of each transaction for three years. Each party to a brokered transaction has the right to review the record of the transaction required to be kept by the proposed rules, including the truckers hired to haul the load.

Furthermore, OOIDA wants FMCSA to levy and enforce a structured fine system for noncompliant brokers. The Association asks FMCSA to suspend or revoke the authority of unscrupulous brokers that consistently break the rules. LL