Two groups representing small-business truckers should know by early next year whether federal regulators will grant their requests for more transparency in freight transactions involving brokers.
Petitions by the Owner Operator Independent Drivers Association and the Small Business in Trucking Coalition (SBTC) seeking more oversight of broker transaction records were published in August 2020 by the Federal Motor Carrier Safety Administration, seeking comment on the two requests.
OOIDA sent a letter to FMCSA in September pointing out that it has been over two years since the group submitted its original petition. “We believe an update is warranted on where the agency stands on our outstanding petition and related comments from motor carriers,” stated OOIDA President and CEO Todd Spencer.
FMCSA “has been considering the issues raised by OOIDA’s petition for rulemaking and based on that work is targeting early 2023 to issue a decision,” the agency stated when asked to comment on the groups’ rulemaking request.
“When assessing possible broker transparency rulemaking, FMCSA’s role is to remain within the bounds of our statutory authorities and also takes into account whether and how additional rulemaking will effectively and efficiently resolve the issues identified,” FMCSA added.
Specifically, OOIDA requested that regulations on broker records (49 CFR 371.3) be amended to require brokers to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed. It also requested that FMCSA prohibit brokers from including contract provisions requiring carriers to waive their rights to access their transaction records.
“OOIDA’s recommendations to enhance compliance … are not attempts to control rates or impose burdensome requirements, but would simply ensure that motor carriers have access to documents they have the right to view,” Spencer stated.
Such documents are supposed to include the amount the broker received for its service and the name of the payer, as well as the amount of any freight charge collected by the broker and the date it was paid to the carrier.
SBTC’s petition similarly asks that FMCSA 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,” FMCSA stated in the petition notice.
Months after FMCSA’s comment request on OOIDA and SBTC’s petitions, the agency issued a notice and comment period for an opposing petition by the Transportation Intermediaries Association (TIA) — which represents truck brokers — asking that FMCSA repeal the current provision in the regulations that gives carriers the right to review the broker transaction record.
TIA argues that the provision directly conflicts with the original intent of the Interstate Commerce Commission when it deregulated trucking in 1980 to ensure that “all unnecessary restrictions which might impede the free operation of the marketplace” are removed.
“In today’s marketplace brokers are not commissioned sales agents of motor carriers. Brokers pay motor carriers regardless of the rate that the shipper pays the broker,” TIA stated. “The need to verify commissions no longer exists.”
FMCSA has not yet responded to a status request on TIA’s petition.
OOIDA and SBTC filed their petitions at the beginning of the COVID-19 pandemic amid accusations that brokers were colluding on prices. The allegations were repeated by then-President Donald Trump but were rejected by Robert Voltmann, TIA’s president at the time, who stated that there was simply not enough freight to support the amount of truck capacity in the market.
Accusations of wrongdoing receded as freight rates and demand for capacity surged over the past two years, but that could change as capacity loosens and spot rates continue to trend down.
“As conditions in the trucking industry change, and more carriers face challenges, we can assure you that FMCSA and others in the federal government will continue to hear about the lack of broker transparency from small-business truckers,” Spencer stated in his letter to FMCSA.
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