WASHINGTON — The Federal Motor Carrier Safety Administration has denied a rulemaking petition by the Transportation Intermediaries Association (TIA) to remove a requirement that freight brokers disclose to carriers transaction records between brokers and shippers.
FMCSA’s denial, published Friday, was issued just a day after the agency agreed to initiate a formal rulemaking by two groups representing small-business truckers – the Owner-Operator Independent Drivers Association and the Small Business in Transportation Coalition (SBTC) – requesting that brokers be prohibited from denying carriers the ability to access such records.
All three petitions (FMCSA combined the OOIDA and SBTC petitions into a single rulemaking procedure) were filed in 2020.
“After careful consideration, FMCSA has determined that TIA’s petition does not contain adequate justification to initiate rulemaking,” the agency wrote to TIA Vice President of government affairs Chris Burroughs. FMCSA noted that it had reviewed all comments on TIA’s request and held a public listening session on it as well.
“FMCSA believes that elimination of the records disclosure provision would be contrary to the stated transportation policy goals in 49 USC 13101, including promotion of fairness and efficiency in the transportation industry,” FMCSA stated. “Therefore, FMCSA is denying TIA’s petition for rulemaking.”
Asked to comment, Burroughs said TIA is “extremely disappointed the agency is taking this route,” he told FreightWaves.
“We’ve got a situation where hundreds of millions of dollars of freight is being stolen by fraudulent companies in the trucking market, the [National Highway Traffic Safety Administration] is telling us that truck crashes are up 10%, a majority of the trucks on the road go without a [safety] rating – it’s a complete failure by the FMCSA when it comes to safety,” Burroughs said. “Instead, they want to initiate a rulemaking that involves private commercial contract negotiations. We’re kind of dumbfounded.”
At issue, as laid out in the OOIDA and SBTC petitions, is whether a provision requiring a driver or other counterparty to a broker-managed transaction be able to obtain and review documentation on the deal from the broker — which is the current law [49 CFR 371.3(c)] — can be turned into a rule that the counterparties must get that documentation if requested.
Quoting from SBTC’s petition, FMCSA noted that the group explained how freight rates at the time had “dropped drastically and that motor carriers have reported instances of brokers engaging in ‘profiteering, price gouging and low-balling tactics’.”
FMCSA also underscored SBTC’s claims at the time that brokers, in some instances, were receiving commissions of up to 65% on loads due to the sudden freight shortage in the early days of the pandemic, combined with overcapacity in the trucking markets.
“To evade regulations, some brokers have resorted to requiring carriers, as parties to broker transactions, to waive their rights to obtain documents that show the amount the shipper is paying the broker,” FMCSA stated, referring to SBTC’s petition. “SBTC further states that [49 CFR 371.3] should be strengthened to stop this abuse.”
In addition to strengthening the broker transparency provision in the regulation, OOIDA also wants FMCSA to require that brokers provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed.
“Our problem with electronic submission of data from our members is that this is our customers’ information, and we’re not confident this information will be kept confidential,” Burroughs countered.
“Certain brokers have to include contract language so that proprietary shipper information is not disclosed, and these groups want to make it illegal. No one is forcing carriers to sign these contracts or even to work with a broker.”
He added that, whenever there is a downturn as in the current market, “the freight rates are driven down by supply and demand – but our guys always look like the villains.”
On the same day FMCSA agreed to initiate the rulemaking, OOIDA President and CEO Todd Spencer wrote to FMCSA Administrator Robin Hutcheson to emphasize that more regulatory oversight on the issue will not only protect carriers from unscrupulous brokers, “it helps to protect the public by providing a marketplace in which each party behaves in a clear and transparent manner and will also give motor carriers better protections when there are claims or disagreements with brokers,” he asserted.
Elvin Almonte
Hi. My name is Elvin Almonte Placencio..class A driver since 2016!.and owner of EES TRUCKING LLC..I’m worried about the situation all of us are going through..we need help..we need transparency but more important we need to set a minimum rate per mile of $4.00 per mile for OTR drivers. and a minimum rate of $700 for local drivers.. in my opinion this will fix the problems … PLEASE HELP US STAY IN Business..
Ryan Meyerhoffer
We as independent O/O’s continuously face low rates on a regular basis and are expected to move freight at such low rates to which barely covers the operating costs let alone allows us to pay ourselves a decent wage after all costs are factored in to moving freight. With the severe increase in pricing of trucks, trailers, parts, fuel, tolls etc. it’s becoming more and more difficult to provide for our families. Fuel is now 30-35% of our gross profit but somehow we’re expected to move freight at $2 per mile. An O/O who owns his or her truck and trailer might be able to manage those rates but that proves to be very difficult considering the cost of inflation. Let alone the cost of maintaining emissions components on these vehicles that sometimes leaves O/O’s no choice but to shut down until the parts become available or they can afford to replace said components. That could be a day to months of downtime due to these unscrupulous rules and mandates. The costs associated are absurd. States like Connecticut have implemented a $.30/mile road tax on roads they receive federal money to repair and maintain however they refuse to use such road/fuel tax monies to do so. Secondly, on top of that new road tax CT has a filing fee of $600 per tractor/truck. A federal 2290 fee is less than what CT is charging which is highly discriminatory towards trucking companies who bring them freight. My point is; it’s time the FMCSA cracks down on the brokers and cap their ability to make absurd amounts of profit when hardly performing their duties let alone understand the FMCSA regulations regarding HOS and safe operating practices. I and many other small companies have since refused to work with companies like the JB Hunts, TQL, Coyote Logistics etc. because we know they’re keeping a large piece of the pie while forcing small companies to pay for the extra pepperoni and cheese they’re eating. Regulation needs to happen and if brokers continue to blacklist us for requiring transparency as the FMCSA regulations state they must be shut down. Brokers also use Carrier 411 and if one black lists you for requesting that information more follow. Where’s the protection for the small guys?.
Thomas Jackson
Please get to the bottom of these unjust robberies. Most truckers don’t care about the commodity of what we haul,but we do care about the rates we get paid to do so. These brokers are robbing us blind,and we have no one to fight for us. If we would come together and strike like the railroad,then maybe we’d get some help in this matter.
Edgar Flemming
Everything is going to be good,based on this ruling . But in SC if you stole something of value $100.00 up to $500.00 it a felony. Punishable with a fine and or prison upto 1 year . Those joker brokers need to be tried and convicted for their actions. Every one else is. Why not make it a crime.
Kalop Harvey
Because brokers are the villains, dishonest and artificially keep rates below even a profitable level. Either act honestly and pay fair rates, or get rid of brokerages completely and let the trucks deal directly with the shipper.
Tom McLaughlin
The government has never respected truckers. Brokers rob us every day. Lie to us.the only way to stop the bleeding is to strike. And that’s an impossible task in today’s society. Hell 30% of the drivers today on USA roads are not American citizens and Don’t speak English. That doesn’t mean that they are not good people trying to make a living. It means that they wouldn’t understand what is going on in the industry. I’ve been a independent trucker for 36 years. And I’m working on getting out of the business. It’s just not worth it anymore. Hell I was treated with more respect back in 1990 hauling beef to NYC. for the mob. At least they would pay us good. Now it’s just a bunch of thieves sitting in big Corp offices. It’s a good time to quit. Besides Biden wants all the illegals coming in to our country by the thousands to take what he calls a good job. The stole the election from us working Americans, not just trump. And now there literally ruining our country. It’s sickening.
Willie Mobley
I tried to say fuel costs went up right after my statement about the W-2 employees where’s our help
Willie Mobley
Hi my name is Willie and I am glad that someone is talking about this and shining a light on what is really truly going on not only with the brokers but also with these insurance companies raising the rate of insurance, And where is the money for the companies that don’t have W-2 employees where is our help in few calls went sky high insurance rates went sky high and the rates dropped tremendously as of April last year for me something needs to be done thanks