More work to do on broker regulations, OOIDA says

Although generally supportive of a final rule to improve broker security regulations, the Owner-Operator Independent Drivers Association believes that more can be done to promote a fair working environment for truckers.

On Monday, Dec. 18, OOIDA filed a petition for reconsideration of the Federal Motor Carrier Safety Administration’s final rule on broker and freight forwarder financial responsibility.

“The final rule should be enhanced to ensure transparency when a broker/freight forwarder’s financial responsibility falls below $75,000,” OOIDA wrote in the petition signed by President Todd Spencer. “The agency should also stipulate a seven-day period for the surety provider or financial institution to investigate and determine the validity of the claim. These and other modifications will promote a fair working environment between brokers/freight forwarders and motor carriers that will best serve the public interest.”

OOIDA’s petition for reconsideration comes at a time when broker issues have been a hot-button issue in the trucking industry. In addition to FMCSA’s final rule on broker financial responsibility, OOIDA petitioned the agency in 2020 to update broker transparency regulations. That petition was granted in 2023, but FMCSA is not scheduled to issue a proposal until late 2024.

Broker financial responsibility

On Nov. 16, FMCSA published a final rule regarding the financial responsibilities of brokers and freight forwarders.

The 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 establish a process for the suspension of sureties and trusts in the event of non-compliance with the regulations

“Brokers who fail or refuse to pay carriers for legitimate services rendered will have their operating authority suspended and will be unable to continue accruing claims over time,” FMCSA wrote. “Carriers will have more information to avoid contracting with unscrupulous brokers and could also receive payment for work completed in a more timely manner, without use of interpleader proceedings.”

OOIDA’s petition

In its Monday, Dec. 18 petition for reconsideration, OOIDA told FMCSA that the final rule should be supplemented “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.”

As part of the petition, OOIDA requested additional details on how FMCSA plans to use the Unified Registration System platform to receive and publicize information from surety providers, trustees, brokers and freight forwarders, as well as to administer the immediate suspension of operating authority.

“At a minimum, FMCSA should publish an annual report detailing their efforts to combat broker fraud,” the Association wrote. “OOIDA supports a more formal collaborative process between federal regulators, law enforcement personnel and industry stakeholders to identify, penalize and protect against this fraudulent activity.”

FMCSA’s final rule is set to take effect Jan. 16. The agency isn’t required to answer the petition before the rule starts. LL