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.
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A Jackson
Mr King. It would be a blessing if we got on the same page. 2 weeks will get plenty of attention. Right now all the crying is going through one ear and out the other. We need to start being more intelligent enough to express what we actually know. For example:Let look at the food prices in the grocery stores. I don’t see any discount items. Only increase prices.. We know the freight prices should not decrease.. Either the broker is keeping the money. Or the shipper is keeping the money. Because the rates are paying less money.. All we need to do. Is let that freight sit on the dock. I’m quite sure someone will figure out they need to pay more money and stop low balling because the market dictates it. I haven’t heard anything about people eating less or shopping less. Where is the money?!The brokers are getting a great big peace of the transportation pie. We chose to excep the crumb.. Now, since the crumbs starting to dry up, you want to cry. No. Brokers keep your foot on their necks..Keep them chasing their tails!!!
BROKER
Well, sorry this happens but when you accept freight don’t take their offer and negotiate. Trucks are too quickly to accept in fear of not having a load. do your own research on rates.
Im a broker and I pay every single carrier top dollar. Yes we make money but the trucks dont understand the contracts we have to set up, the agreements, and our overhead. I understand some of you get tossed around but us decent folk to want trucks on the road to make money should not suffer from others problems.
Some loads, yes we make great profit ( same with truck ) some loads we lose money on.
Its the name of the game, if you dont like it then find something else.
We are not a socialist country folks, so grow the F*** up , you make your own bed every morning. Stop asking for help
( EX – I have a lot of double brokering issues, That broker who doubles up on my load pays a carrier 2500 for a load. I would have paid you 3300. You decide to go with these brokers not me so dont put your mistakes on me. DO YOUR RESEARCH BEFORE ACCEPTING and simply ask if the broker is the origin for the load. If they arent find the right one and stop putting the knife if your own back.
Benigno pieniro
I just read all the comments above me,and I get like WOW WOW WOW,there is one that who mention clearly he is and O/o I don’t believe that they way that he describe everything,blaming and calling stupids,driver and O/o blaming that is not broker faults,was wrong,people,did you know how many times do I deliver a load,and the receiver ask me or I ask how much they pay or I get paid,and is thousand of dollars that they keep in they pocket whit out invest a dime,realtor or brokers at any kind they always make a % why they are the only ones,that hides the rate very simple,cause they are getting rich,whit other people sacrifices,sooner or later things will change,all of you broker THEY DUG THEIR OWN GRAVE…..
Anthony
Something needs to be done, brokers are abusing their position and taking advantage of carrier’s, giving us pennies to make a living off.
BigDog
Truckers want daddy government to take care of them.
You know, you don’t have to take the freight? You can get your own customers? You don’t have the right to be a truck driver, if you can’t make money at it, maybe it is not for you.
Curtis AJackson
All these crybabies trucker. Then you take the cheap load yesterday and you’re going to take another cheap load tomorrow.. Understand something ( their name is Broker) which means they are in the business to break you. The funny thing about it. You dummies make the decision to break your self. So stop blaming the brokers for what you choose to do.. I m a OO. Nobody forced me to haul there cheap loads. And they didn’t force you.. So get your butts out of business if you’re the one Crying. Then go pickup the cheap load.. You are the one who’s keeping the rate’s down.. ( if I was a broker I will get as cheaper the more you pick up my cheap loads the cheaper it’s going to get. I will post a load 30cent a mile to see if one of you dummies take it. Do blame the brokers when you made the decision to haul the load. If the brokers say they pay 200dollars from Ga to Cali. Than you the dummy. Not the broker!!!! YOU!!!!!!! So stop crying kids try and grow up.. And come together like real men and women.. Shut down for two weeks and see what happens. Until then. Shut up Stupid!!!!!
TruckingIsSaturatedbyForeigners
There are too many truckers and not enough freight. That is the reason the rates are so low.
A lot of foreigners get into the business and take cheap freight because to them its good money.
Its not a broker problem, its a trucker problem. They just want somebody to blame.
Steven Larry Berg
I had been in business 11 years before shutting it down 3 months ago. Thank God I shut it down then. This ruling has 0 practical effect. No carrier has the time to wait for the broker to send the info to you and for the carrier to look at it before taking the load or not. You are generally taking the load on the day you need it and not a week in advance.