Freight brokers appear to be universally unhappy with a proposed new broker regulation to improve the transparency of their transactions with motor carriers. FMCSA proposed the regulation in response to petitions for rulemaking by the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC). Click below to review FMCSA’s Notice of Proposed Rulemaking: (https://www.federalregister.gov/documents/2024/11/20/2024-27115/transparency-in-property-broker-transactions)
“Broker transparency” describes the full visibility of all elements of a business transaction between a broker and a shipper to a carrier contracted to haul the load. 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.The NPRM does not prohibit contractual clauses which waive the right of motor carriers to review the record of transactions. While OOIDA and SBTC had requested that provision, FMCSA stated that only Congress can take that step. However,
Here are the four major changes proposed by the NPRM:
1. Brokers must keep and transmit records in an electronic format. FMCSA seeks to do away with the practice of some brokers that offer viewing of transaction records only at their place of business. Instead, brokers must transmit records electronically.
2. Records must include itemized charges and fees. FMCSA proposes a requirement that the broker transaction records include the dates of payment from the shipper to the broker and from the broker to the motor carrier and provide a full itemization and explanation of any brokerage services, charges and fees. The Agency’s goal is full visibility to all parties in a transaction.
3. Brokers must provide records upon request. The NPRM does not propose that brokers automatically transmit transaction records. Rather, if adopted, brokers would be required to respond to a request for records.
4. 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 2 business days of a request.
FMCSA believes this NPRM will help level the playing field to give parties equal insight to a transaction. The Transportation Intermediaries Association (TIA), which represents brokers and freight forwarders, has opposed the rule in its current state. TIA had filed its own petition for rulemaking, which would eliminate broker responsibility to share transaction records. FMCSA denied that petition. TIA points to the absence of complaints about broker transparency in the National Consumer Complaint Database compared to the public outcry over cargo theft. (The NCCD is a little-known FMCSA website originally set up to take consumer complaints about household goods transportation.) In the NPRM, FMCSA notes that improved broker transparency should “further protect motor carriers.”
Public comments on the NPRM are due by January 21, 2025.
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