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 believes that 49 CFR 371.3(2) should be eliminated because it hinders supply chain functionality as well as a free, open, and competitive marketplace,” a TIA spokesperson told FreightWaves. “The regulation is outdated, unnecessary and will continue to be used as a tool to try to re-regulate the industry, which runs contrary to the intent of the Interstate Commerce Commission’s rules back when they were enacted in 1980.”
FMCSA confirmed it is still considering the issues raised in TIA’s petition, with a target date of early 2023 for a decision on whether to publish a rulemaking on their request as well.
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.
George W McDaniel
I don’t care what the brokers say, yes they do collude to set prices. If they don’t, plz explain to us how going rates drop overnight for all lanes across America. This year I was running multiple lanes for 4-5 per mile, then woke up one day and those rates dropped to 1.75-3.50 a mile. Not a or some, but all of them dropped at the same time. It wasn’t even this or that broker, it was most of larger ones. Some of the smaller brokers was able to rates up for a while, but they eventually dropped also.
A
Carriers don’t understand this:
Brokers are your customers. You DON’T have to do business with them.
Roy A Drumm
If owner operators aren’t being shorted on money that they are entitled to, then why is this subject a problem?
Not trying to say all brokers are stealing money that should be passed onto those who face high overhead costs to transport good across the United States, but making the process even for all involved.
Garrett Shaboo Ritter
Carriers who want more pay must provide better services as well, most brokers’ margins are 7% to 15%
Js
The real problem is that brokers hold the carrier to abide by their contract, at times no (tonu, overlay pay, or detention)to name a few the carrier dosent really have a contract to present and if they do the broker might blackball the carrier and not do business with them, simply said just moves on to next carrier that won’t ask for what is fair.
RC
Brokers are withholding more than their 15% fee for their services. While the carriers struggle to make sense of it all, we would rather pass on the load to take such a significant loss.
HF
I agree on getting paid more than 2.00 a mile.We have to pay high diesel prices,high toll-free,food,high insurance,high hotel prices,high risk on the road,high cost of living.As a owner and operator,we should be getting paid at least 2.50 or more a mile.We also have to keep up with Maintenance on or trucks.
Mk
If broker is transparent on how much they got paid by the shipper. It would be a good thing for both carriers and the brokers as a there will less rejection .