How should FMCSA define brokers and bona fide agents?
June 9, 2022
The Federal Motor Carrier Safety Administration wants feedback regarding the definitions of broker and bona fide agents.
FMCSA is scheduled to publish a notice to the Federal Register on Friday, June 10, to inform future guidance. As instructed by the infrastructure law passed in 2021, the agency must issue guidance to clarify the definitions by Nov. 15.
“The guidance must take into consideration the extent to which technology has changed the nature of freight brokerage, the role of bona fide agents and other aspects of the freight transportation industry,” FMCSA wrote in its notice.
Once the notice is published in the Federal Register, the public will have 30 days to comment.
FMCSA’s guidance must examine the role of a dispatch service in the transportation industry, examine the extent to which dispatch services could be considered brokers or bona fide agents, and clarify the level of financial penalties for unauthorized brokerage activities under 49 U.S.C. 14916, applicable to a dispatch service.
As part of the comments, the agency wants industry stakeholders to respond to 13 questions.
1. What evaluation criteria should FMCSA use when determining whether a business model or entity meets the definition of a broker?
2. Provide examples of operations that meet the definition of broker in 49 CFR 371.2 and examples of operations that do not meet the definition in 49 CFR 371.2.
3. What role should the possession of money exchanged between shippers and motor carriers in a brokered transaction play in determining whether one is conducting brokerage or not?
4. How would you define the term “dispatch service”? Is there a commonly accepted definition? What role do dispatch services play in the transportation industry?
5. To the best of your knowledge, do dispatch services need to obtain a business license or Employer Identification Number from the state in which they primarily conduct business?
6. What should FMCSA consider when determining if a dispatch service needs to obtain broker operating authority?
7. If a dispatch service represents more than one carrier, does this in and of itself make it a broker operating without authority?
8. When should a dispatch service be considered a bona fide agent?
9. What role do bona fide agents play in the transportation of freight?
10. Electronic bulletin boards match shippers and carriers for a fee. The fee is a membership fee to have access to the bulletin board information. Should electronic bulletin boards be considered brokers are required to register with FMCSA to obtain broker operating authority? If so, when and why?
11. How has technology changed the nature of freight brokerage, and how should these changes be reflected, if at all, in FMCSA’s guidance?
12. Are there other business models or services, other than dispatch services and electronic bulletin boards, that should be considered when clarifying the definition of broker?
13. Are there other aspects of the freight transportation industry that FMCSA should consider in issuing guidance pertaining to the definitions of broker and bona fide agents?
Starting June 10, the public can submit comments on the notice by going to the Regulations.gov website and entering Docket No. FMCSA-2022-0134. LL