FMCSA Asks for Comments on Broker Transparency Petitions

FMCSA Asks for Comments on Broker Transparency Petitions: The Federal Motor Carrier Safety Administration (FMCSA) is asking for public comments on a proposal given by owner-operator/small-fleet groups to address the transparency of broker rates. The notice is announced in response to a petition filed by the Owner-Operator Independent Drivers Association and the Small Business in Transportation Coalition.

As spot rates decreased earlier this year due to the drop in demand caused by the COVID-19 shutdown, many small fleets and owner-operators were convinced that brokers were taking unfair advantage of the situation. As the rates hitting five-year lows in April, owner-operators staged protests all over the country, calling for more broker regulation.

The Owner-Operator Independent Drivers Association said that brokers often find ways of avoiding federal regulations (49 C.F.R. 371.3) which requires them to keep records of transactions and make them available to motor carriers.

Many carriers, those include sign contracts with brokers that waive Part 371.3 requirements, owner-operators, the association explained in a May 6 letter to Congress. OOIDA said the practice is so widespread that truckers often have no other choice if they want to haul a brokered load.

In an interview, OOIDA Executive Vice President Lewie Pugh said the association has asked FMCSA repeatedly for years to have some oversight on this transparency rule.

Lewie Pugh highlighted two issues. One is most brokers have a clause in the contract carriers must sign waiving their right to 371.3. “We don’t even think that’s legal to do that, to exempt yourself from a regulation. I mean, drivers can’t exempt themselves from hours of service or any of the rules or the regs, and if they do, or they don’t follow them, they get fined and they may even get their authority revoked. But brokers are doing this every day. And there’s no penalty for their actions.”

The second one is “they tell them they have to come to their office. Well, the broker might be in Cincinnati, Ohio, and the truck owner might be in California. So that’s not really convenient.”

OOIDA sent a letter to Congress the Transportation Intermediaries Association, a group representing brokers, sent a letter to some members recommending that when faced with trucker requests for transparency, “to explain that if they do this, that you will be unable to load them with any shipper freight requiring confidentiality, and that represents ‘X’ percent of your available loads,” which OOIDA characterized as important threatening anyone who asks brokers respect with the regulations.

FMCSA wants Comments on Broker Transparency Petitions

The FMCSA is asking for the comments on the brokers to disclose certain financial details about transactions to carriers and whether a regulatory action would solve the problem OOIDA described.  Comment Here:

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