FMCSA’s broker transparency listening session set for Oct. 28
October 9, 2020
Editors’s note: The method of registering for this listening session has changed. FMCSA is now using Eventbrite for registration.
The Federal Motor Carrier Safety Administration is holding a listening session about broker transparency, and truckers are invited to participate.
On Tuesday, Oct. 13, FMCSA will formally announce that it will be hosting a virtual listening session pertaining to property carrier brokers from 1-2:30 p.m. Eastern on Wednesday, Oct. 28. Registration is required in advance.
The administration wants to hear from the public their views on the regulation of property carrier brokers in general, according to the notice. This includes three pending petitions regarding specific broker regulation issues. The listening session will not discuss issues about broker or freight forwarder minimum financial responsibilities.
The public can also submit written comments to the docket at least seven business days in advance of the session. Those comments can be sent by going to Regulations.gov, entering the docket number FMCSA-2020-0190 in the “Keyword” block and clicking “Search.” From there, click on the “Comment Now!” button. FMCSA recommends that you include your name, email address, or a phone number in the body of your document.
The Owner-Operator Independent Drivers Association is encouraging drivers to participate in the broker transparency discussion.
“OOIDA will be participating in the listening session on Oct. 28, and we look forward to further explaining why improving broker transparency is necessary,” OOIDA Director of Federal Affairs Jay Grimes said. “We encourage OOIDA members who have been frustrated by the lack of compliance and enforcement of broker regulations to share their experiences with FMCSA and register for the listening session as soon as possible.”
FMCSA’s broker listening session comes after OOIDA filed a petition for rulemaking to amend certain requirements for brokers. OOIDA wants FMCSA to require brokers to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed. The petition also wants FMCSA to explicitly prohibit brokers from including any provision in their contracts that requires a motor carrier to waive its rights to access the transaction records.
The Small Business in Transportation Coalition filed a similar petition. Its petition seeks to prohibit brokers from coercing or otherwise requiring parties to brokers’ transactions to waive their right to review the record of the transaction as a condition for doing business.
Countering that petition, the Transportation Intermediaries Association, which represents brokers, filed a petition asking FMCSA to eliminate the federal regulations.
Specifically, the petition wants to develop guidance on what is legally considered a dispatch service. TIA claims its proposed modifications would eliminate an outdated regulation that no longer applies to the current marketplace. The petition states it would remove “unethical and unscrupulous actors from the marketplace” and eliminate an administrative burden on FMCSA to enforce outdated and unnecessary regulations.
“Given that the TIA petition expresses a different perspective than those expressed in the OOIDA and SBTC petitions, FMCSA would like to hear from members of the public on their views on the regulation of property carrier brokers in general, and on the three petitions, specifically,” FMCSA states in its notice.
Broker transparency issues
The federal regulation in question is 49 CFR 371.3, which requires brokers to keep records of transactions with motor carriers. One subsection of that regulation gives each party to the transaction, including the carriers, the right to review the record. This provision allows truckers to see exactly what their cut is of the full rate that the shipper paid.
OOIDA has documented that brokers are skirting these transparency regulations. In fact, some contracts with a broker waive the requirements set forth in 371.3 regulations. During the peak of the pandemic, truckers saw historically low freight rates.
“Motor carriers have expressed frustration about the lack of transparency between brokers and motor carriers,” FMCSA states in its notice. “OOIDA believes the problem is that the regulations designed to provide transparency are routinely evaded by brokers or simply not enforced by FMCSA.”
Also, OOIDA’s petition explains how brokers intentionally throw out roadblocks in contracts that prevent motor carriers from seeing information. In some cases, carriers can access records only at the broker’s office during normal business hours. Consequently, this makes it virtually impossible for an owner-operator to get information.
To solve some of the issues, OOIDA wants to modernize the regulations. Since the regulation was put in place, many – if not most – business transactions take place electronically. Requiring electronic copies will address some of the loopholes.
Furthermore, OOIDA also wants an update that will prevent brokers from retaliating against carriers that request information. Some truckers have accused brokers of refusing to offer them loads after requesting transaction information.
A similar petition filed by the Small Business in Transportation Coalition is also included in FMCSA’s request for comments. Earlier this year, the coalition filed a request for exemption from the $75,000 broker bond requirement. OOIDA filed comments opposing that request, pointing out that the broker bond provisions were enacted to help eliminate a system of loopholes and skirting regulations “that stiffs truckers out of what they are rightfully owed.” LL