FMCSA sticks with broker final rule, while planning other rulemakings

May 14, 2024

Mark Schremmer


The Federal Motor Carrier Safety Administration plans to maintain its final rule on broker and freight forwarder financial responsibility.

Last November, FMCSA published a final rule that takes several steps to improve broker security regulations, including the suspension of operating authority if the available financial security falls below $75,000.

Although the Owner-Operator Independent Drivers Association believes the rule is a step in the right direction, it argues that the agency should be doing even more to promote a fair working environment between brokers and motor carriers. Because of that, OOIDA filed a petition for reconsideration in December to strengthen the rule.

FMCSA, however, recently informed OOIDA that it is going to stay the course with the final rule, which took effect in January. The agency said OOIDA’s requests were “out of scope” for this specific rule but noted that it is taking steps to address broker issues.

Broker financial responsibility

FMCSA’s final rule aims to:

  • Limit the asset types that can be maintained in broker or freight forwarder trusts to cash, treasury bonds and irrevocable letters of credit issued by a federally insured depository institution
  • Establish procedures and requirements for the immediate suspension of broker and freight forwarder operating authority registration if the available financial security falls below $75,000
  • Clarify when a broker or freight forwarder is in financial failure or insolvency and establish related requirements
  • Amend FMCSA regulations to add civil penalties for surety and trust fund violations of the regulations and to establish a process for the suspension of sureties and trusts in the event of non-compliance with the regulations

In its petition for reconsideration, OOIDA told the agency that the final rule should be strengthened “to further alleviate the concern” of brokers not paying.

“We believe various modifications can improve the economic health of the broker/motor carrier component of the transportation industry,” OOIDA wrote. “Additionally, small-business motor carriers who rely upon brokers will be spared financial loss from both brokers and ineffective bonds or trusts under these suggested amendments. This will result in safe, experienced motor carriers staying in business along with a more transparent process for both industry stakeholders and general consumers.”

OOIDA’s requests to FMCSA included the implementation of broker knowledge and experience provisions, an annual report on the agency’s efforts to combat broker fraud, implementation of a seven-day claims investigation period and having a broker’s financial insolvency placed on the agency’s SAFER page.

FMCSA’s response

The agency told OOIDA that the requests regarding broker knowledge and an annual report on broker fraud were “out of scope for this particular rule.”

“Thus, the agency will not be making any changes to the rule based on these requests,” FMCSA wrote. “Regarding your request to implement a seven-day claims investigation period, FMCSA believes a full and fair investigation of each claim is necessary. While many investigations take seven days or less, there may be instances in which a surety provider requires additional time. Thus, the agency decided not to place a time limitation on the claims investigation process and declines to reconsider this provision.”

FMCSA said it will consider providing information about a broker’s financial insolvency on its SAFER page but does not believe the action should be mandated by regulation.

Other broker actions

Although FMCSA said OOIDA’s request for broker knowledge requirements was denied in relation to this specific final rule, the agency appears to be taking steps to address the problem.

In March, FMCSA informed the Transportation Intermediaries Association that it granted a petition regarding training requirements for brokers and freight forwarders.

TIA petitioned the agency last June for a rulemaking to implement and enforce existing provisions related to experience and training requirements for brokers and freight forwarders to enter the marketplace.

FMCSA granted the petition, but it has not been published in the Federal Register. It’s unclear when the agency will begin the rulemaking process.

The agency also granted a petition in March 2023 from OOIDA to address the lack of broker transparency.

The petition asked FMCSA 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 carriers to waive their rights to access the transaction records

Even though OOIDA petitioned the agency in 2020, FMCSA still hasn’t initiated the rulemaking. That is projected to happen this fall. LL