WASHINGTON — In a detailed comment on the Federal Motor Carrier Association’s (FMCSA) proposed rulemaking on broker transparency submitted Jan. 21, the Owner-Operator Independent Drivers Association (OOIDA) urged the agency to take action and help protect the livelihood of small carriers and owner-operators.
“The deck is stacked against carriers in numerous ways, yet truckers persevere and deliver for the American people. It’s time to level the playing field,” said Todd Spencer, president of OOIDA. “It’s time to restore fairness in the freight market. It’s time to give small-business truckers a leg up. It’s time for broker transparency.”
Following are a few points from OOIDA’s comments:
48-hour deadline
The rulemaking would amend FMCSA property carrier broker rules in response to petitions for rulemaking from OOIDA and the Small Business in Transportation Coalition (SBTC). OOIDA requests that FMCSA require property brokers to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed and prohibit explicitly brokers from including any provision in their contracts that requires a motor carrier to waive its rights to access the transaction records. SBTC requests 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. SBTC also requests that FMCSA adopt regulatory language indicating that brokers’ contracts may not include a stipulation or clause exempting the broker from having to comply with the transparency requirement.
Background
For decades, small-business truckers have expressed frustration that 371.3 regulations designed to provide transparency are routinely evaded by brokers or simply not enforced by FMCSA, according to OOIDA.
In May 2020, OOIDA submitted a Petition for Rulemaking with FMCSA to improve broker transparency on two fronts:
- Require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed.
- Explicitly prohibit brokers from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required by 49 CFR §371.3.
“Over the next four years, OOIDA and its membership submitted hundreds of comments to FMCSA, conducted meetings with DOT/lawmakers, and participated in public listening sessions supporting the push for transparency,” OOIDA said. “These efforts culminated in the agency publishing the Notice of Proposed Rulemaking (NPRM) last November.”
Demand for Broker Transparency
“We agree with (FMCSA’s) assertion that, ‘broker transparency is intended to enable efficient outcomes in the transportation industry by providing material information necessary for the transacting parties to make informed business decisions,'” OOIDA said. “Over the last few years, motor carriers have been increasingly victimized by freight fraud, unpaid claims, dubious charges, unpaid loads, double brokered loads, and load phishing schemes. The absence of legitimate broker transparency limits carriers’ ability to combat these problems.”
Provisions
OOIDA is requesting a number of provisions to improve broker transparency.
- Provision 1 – Brokers Must Keep Records in an Electronic Format. We completely endorse this provision. We agree with FMCSA that requiring records in an electronic format would eliminate this loophole brokers utilize to conceal transaction information from motor carriers.
- Provision 2 – Revisions to the Required Contents of Brokers’ Records. This provision can help remedy a broken claims process that costs carriers both time and lost earnings. We support a comprehensive record so as much information as possible is available to all parties when problems with a shipment arise or the compensation amount differs from the contractual amount. These records will assist disputes get resolved fairly and efficiently.
- Provision 3 – Brokers Must Provide Records Upon Request. We applaud FMCSA for amending 371.3 language that clarifies and strengthens the regulatory obligation for brokers to provide transaction records. The proposed language leaves no question about what brokers must provide upon request. We are less sure that the amended language will dissuade brokers from using contractual waivers to evade transparency rights. We disagree with FMCSA’s reasoning for not including an explicit ban on waivers of 371.3 requirements. If brokers can continue manipulating these types of waivers, then that defeats the well established purpose of the NPRM. We urge the Agency to reconsider permitting contractual waivers that undermine broker transparency as the rulemaking process moves forward. FMCSA should not allow stakeholders to waive compliance provisions of federal motor carrier safety regulations.
- Provision 4 – Records Must Be Provided Within 48 Hours of Request. The proposed window of 48 hours to provide requested records would benefit motor carriers by ensuring access to transaction information in a reasonable timeframe. We seek clarification about when this 48-hour period would officially begin following a request. As a matter of consistency, FMCSA must alter the proposed 371.3(c) regulatory.
Automatic Disclosure and Retaliation
“Our 2020 petition sought a provision making disclosure of the records automatic,” OOIDA said. “We believe automatic disclosure is necessary to prevent selective retaliation. We disagree with the Agency’s position that an automatic disclosure provision is unnecessary and could be excessively burdensome to brokers. Brokers are increasingly employing monitoring and vetting services to contract with carriers. These companies use “automated websites” to “research, qualify and monitor the insurance, operating authority and safety ratings of owner-operators and trucking companies. Automatic disclosure of records will close the asymmetry of information gap.”
Compliance and Enforcement
The Notice of Proposed Rulemaking (NPRM) does not propose stricter penalties than are currently approved by regulations,” OOIDA said. “Nor does FMCSA sufficiently address how they will achieve better enforcement and compliance under these provisions. A final rulemaking must address these critical details. FMCSA must levy and enforce a structured fine system for 371.3 violations that would penalize noncompliance with broker regulations. The Agency should suspend or revoke the authority of unscrupulous brokers that exhibit a pattern of noncompliance. FMCSA must create an enforcement mechanism where it issues an order to a broker that violates the regulations. FMCSA’s order must assess a civil penalty of $500 per day for each violation where a broker fails and/or refuses to provide a complete response to a party’s request for documentation in the time and manner required by § 371.3.”
According to a press statement, OOIDA plans to coordinate with the U.S. Department of Transportation’s new leadership team and lawmakers to ensure that broker transparency remains a priority for the Trump administration and the 119th Congress.
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
