Should electronic bulletin boards — known in trucking as load boards — be considered brokers and therefore required to register as such with federal regulators?
The question was posed by the Federal Motor Carrier Safety Administration in soliciting comments for future guidance on how freight brokers, bona fide agents and truck dispatchers should operate.
Most responding to that question in the petition, which received over 70 comments of which many were duplicate form-letter responses, believed electronic load boards, which match shippers and carriers and charge a membership access fee, should not be considered brokers.
“These load boards essentially serve as an ‘information marketplace’ for entities in the transportation industry,” said Chris Burroughs, VP of government affairs for the Transportation Intermediaries Association (TIA), a major broker group. “TIA firmly maintains that load boards should not be considered to be brokers, as they are technology companies providing data and serving all entities in the marketplace.”
The Owner-Operator Independent Drivers Association (OOIDA), agreed that electronic load boards should not be considered brokers “as long as they are only displaying information and not processing money between shippers and motor carriers,” said OOIDA President and CEO Todd Spencer.
DAT Solutions, a major load board operator, asserted that being regulated like a broker “will not further the mission of protecting carriers from fraudsters who arrange for shipment and then refuse to pay. FMCSA’s guidance should explicitly reinforce that electronic load boards do not provide regulated brokerage and thus are not brokers.”
Truck safety groups and others disagree, however. A joint petition filed by the Truck Safety Coalition, Citizens for Reliable and Safe Highways, and Parents Against Tired Truckers stated that an electronic load board, by virtue of accepting, approving and listing carriers on its platform, “has determined that these providers met its standards for inclusion on its platform, whatever those may be. Seeing as some level of selection has taken place, broker authority should be required.”
Michael Millard, president of consulting firm AWM Associates, said in his comments “too many organizations provide transportation services without any recourse when they fail to deliver as promised. Trucking companies’ hands are tied and they must follow [federal regulations] or face the consequences. Load boards are brokers and should be registered so motor carriers have some peace of mind the entity is legitimate.”
Load board scammers are also notorious for illegal double brokering — which has cost the industry over $100 million annually, according to estimates — and therefore should be licensed or regulated in some way, other commenters stated.
“Websites … let brokers and carriers double broker loads (as well as lie and mislead other businesses regularly),” said David Dwinell with Truckalocity. “If you complain, the load boards say whatever they want and claim they’re not responsible or involved.”
Illegal dispatching = more than one customer?
Battle lines drawn between how truck dispatchers should operate were emphasized in the comments as well. One of the bigger disputes is over whether dispatchers should be allowed to work for more than one customer — and if they do, be required to register as a broker. Those that do work for multiple customers — and do not register as a broker — are exploiting a “dangerous loophole” in the regulations, according to TIA’s Burroughs.
“A legal dispatch service provides a service on behalf of one motor carrier, where the dispatch service assists in booking loads and other services for that single motor carrier,” he said. “The dispatch service is paid a commission by the motor carrier for its services. This is vastly different from the model that applies to brokers, in which the shipper pays the broker for the broker’s service and the broker pays the motor carrier.
“FMCSA should clarify the distinction between brokers and dispatch services and prohibit these companies from offering such a service without a broker’s license.”
The Small Business in Transportation Coalition (SBTC), which asked the FMCSA to revise the definitions of “broker” and “bona fide agent” in 2018, asserted there is no legal basis allowing for an independent contractor to hold itself out as offering a “service-based freight arranging business” to multiple carriers without needing a broker license. “The phrase ‘dispatch service’ is therefore an unlawful construct that does not exist in law,” SBTC stated.
But OOIDA and others maintained the criteria FMCSA should use to determine what constitutes a legal dispatching operation should focus not on customer numbers but on how payments are handled.
“If a business or entity is acting in a financial role between both the shipper and the carrier, then this would make them a broker,” OOIDA’s Spencer said. “Representing more than one carrier as a dispatch service or bona fide agent does not automatically constitute brokering without authority.”
Eugene Miller
I had broker want to charge 67% from San Antonio headed North .I had to be in ND. ASAP so told him I was not doing all the work. Just would not put up with his BS
Eugene Miller
10/12 percent reasonable.Some charge as much as 33%. Brokers should have to post what they get pd. Most any OO has Ben taken.
I was in San Antonio headed to North Dakota
A load headed North paid 67%. I told him o and deadhaded as I had critical load in ND and didn’t have have time for his BS!
Sammy
It is interesting how these organizations claim dispatch services are a problem, yet have not defined the problem other than issues already illegal like double brokering or actual brokering without authority.
Even SBTC, the organization that takes carriers and brokers money over an issue they created, can’t come up with a legitimate reason.
What is next, can a carrier not hire a bookkeeper because they work for different people?
Let’s break the history of this issue down.
A scam artist that was investigated by the FMCSA for misleading and cheating small carriers (his partner paid a LARGE fine while admitting no wrong doing – and the scammer will point out he was never found guilty of anything) see’s his honey hole of scamming carriers getting harder to do decides that the real money is in creating an association to help brokers and carriers.
After they failed at keeping the bond from being increased, he needed a new “issue” to raise money on.
ELD’s looked good, but after being a one issue pony, he needed more.
Eureka, dispatch services. Let’s also harass the FMCSA of dispatchers.
Now we are getting some place. Let’s hammer social media regarding “illegal” dispatchers.
BAM – creating a money making issue out of nothing.
Gotta say, a lot of people with no idea why they shouldn’t like it just fall in line.
Hjpratt
Fmcsa needs to look into crooked brokers that are robbing owner operators. They should have to post what the load is paying and broker gets a set percentage of that load. 10 or 12 percent is plenty. The owner operators have alot more overhead to deal with and should get the largest percentage of the load pay but our government doesn’t want to deal with that, they just want to stick fingers in where they are not needed.
Al
Brokers sucks blood for hard work American . And most of broker’s dispatch is over see now. I can’t more happier as small carrier if FMSCA blocks brokers to register load broads.
Carlos_P
👹 This is just another Government scheme to collect more money through classification tariffs upon the matket. Plain and simple. 🤡