Brokers and small carriers differ on FMCSA transparency regulations

Brokers and trucker groups clashed during a virtual Federal Motor Carrier Safety Administration (FMCSA) listening session on pending petitions over property carrier broker regulations held on Oct. 28.

The Transportation Intermediaries Association (TIA), Small Business in Transportation Coalition (SBTC) and the Owner-Operator Independent Drivers Association (OOIDA) each petitioned the FMCSA to update property carrier broker regulations. 

TIA wants the administration to eliminate the current requirement that each party to a brokered transaction has the right to review the record of the transaction, which the FMCSA requires to be kept on file. The broker advocate group also wants the administration to develop guidance on what legally constitutes a “dispatch service.”

But OOIDA and SBTC are seeking the administration to put more restrictions on brokers. 

The OOIDA petition filed in May wants brokers to be required to provide an electronic copy of each transaction record automatically within 48 hours of a contractual service being completed. The owner-operator group also wants brokers to be prohibited from creating contractual provisions that require a carrier to waive its rights to access transaction records. 

The SBTC also wants the FMCSA to prohibit brokers from “coercing or requiring parties to brokers’ transactions to waive their right to review the record of the transaction as a condition for doing business.” It is also seeking a prohibition on brokers including contractual stipulations in contracts that exempt brokers from complying with the current property carrier broker regulations. 

James Lamb, the SBTC’s executive director, told the panel of FMCSA officials who gathered by video conference that his group is not seeking any new federal regulations. Instead, Lamb said, he is concerned that the TIA is acting like the current regulation “doesn’t already exist, hasn’t been in place for 40 years, isn’t grounded in 70-plus years of congressional and regulatory wisdom dating back to the 1940s.”

“Whether or not the TIA and their members like it or not, transparency is already a rule and that rule has been in place for four decades for a reason,” Lamb said before adding that the regulation is “a safeguard that balances the interests of shippers and brokers.”

He said that by granting the SBTC petition, the FMCSA would “put brokers on notice that they do not have the authority to regulate themselves by virtue of a contractual provision.”

Chris Burrows, the vice president of governmental affairs for TIA, called the SBTC and OOIDA petitions “an attempt to undermine the free market.” He said those petitions were driven by the COVID-19 pandemic “because of a temporary economic downturn that upended the supply chain.”

Burrows said allegations that there are systematic issues with brokers dodging regulations are unfounded. He said that SBTC and OOIDA’s petitions are “a solution in search of a problem.” He added that granting the trucking groups’ petitions could lead to substantial costs for carriers, brokers and the public that come with integrating safe transmissions of data that meets with privacy laws. “TIA believes this not the role of the agency to promulgate technology requirements that don’t have a direct impact on safety,” he said. 

Todd Spencer, the OOIDA president, said that record-keeping and transparency requirements are a central component of broker regulations. “Ever since Congress first called for broker regulations 85 years ago, the objective has been to protect the public’s interest in an adequate, economical and efficient transportation system free from unjust discrimination and destructive competitive practices of unscrupulous middlemen,” he said during the listening session. 

Spencer added that the FMCSA’s mandate to ensure brokers not avoid their legal responsibilities by contract — or imposing unreasonable burdensome disclosure conditions if implemented — “would not create any new burdens by adopting the new provisions we are seeking.”

Wiley Deck, the FMCSA’s acting administrator, described the session as “extremely helpful” and encouraged drivers, carriers and brokers to add to the more than 1,200 comments already received by the agency. The FMCSA is still accepting public comments on the petitions, which can be submitted through regulations.gov under docket No. FMCSA-2020-0150. The deadline is Nov. 18.