The Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) filed petitions for rulemaking with the Federal Motor Carrier Safety Administration, seeking to improve the transparency of transactions with freight brokers. FMCSA accepted those petitions and now has published a Notice of Proposed Rulemaking (https://www.federalregister.gov/documents/2024/11/20/2024-27115/transparency-in-property-broker-transactions).
“Broker transparency” relates to the visibility of details of a business transaction with a broker. The NPRM does not contain everything requested by OOIDA and SBTC. Specifically, FMCSA says that only Congress can take the step of prohibiting clauses in broker contracts waiving the right of motor carriers to review the record of transactions. Instead, the NPRM proposes to change current FMCSA regulations from a motor carrier “right” to view transaction records to a broker affirmative “duty” to provide them, hopefully achieving the same end.
Here are the major changes proposed by the NPRM:
- Brokers must keep records in an electronic format. FMCSA seeks to eliminate the practice of some brokers to offer viewing of transaction records only at their place of business. Instead, brokers must transmit records electronically.
- Records must include itemized charges and fees. FMCSA proposes that the transaction records include the dates of payment from the shipper to the broker and from the broker to the motor carrier, as well as provide a full itemization and explanation of any brokerage services, charges and fees. The Agency’s stated goal is full visibility to all parties in a transaction.
- Brokers must provide records upon request. The NPRM does not propose that brokers automatically transmit transaction records. Rather, if the NPRM is adopted, brokers would be required to respond to a party’s request for records.
- Brokers must provide records within 48 hours. To allow parties to resolve any issues in a timely manner, brokers would be required to provide transaction records within 48 hours of a request.
FMCSA believes this NPRM will combat the “asymmetry of information,” where some parties possess more insight into a transaction than others.
The Transportation Intermediaries Association (TIA), representing brokers and freight forwarders, had filed its own petition for rulemaking, where it sought to eliminate any broker responsibility to share transaction records. FMCSA denied that petition.
In response to this NPRM, TIA has compared the absence of complaints about broker transparency filed with the National Consumer Complaint Database (a little-known FMCSA website originally devoted to consumer complaints about household goods transportation (https://www.gao.gov/products/gao-23-105972)) to the increasing industry comments about cargo theft. In the NPRM, FMCSA simply notes that improved broker transparency should “further protect motor carriers.”
Public comments on the NPRM are due by January 21, 2025.