WASHINGTON — The Federal Motor Carriers Safety Administration (FMCSA) has determined that a petition filed by the Transportation Intermediaries Association (TIA) dealing with freight broker requirements “does not contain adequate justification to initiate rulemaking.”
Specifically, the petition asked for the elimination of a requirement that says freight brokers must disclose to carriers, upon request, all records of a particular transaction between brokers and shippers.
“FMCSA believes that elimination of the records disclosure provision would be contrary to the stated transportation policy goals in 49 USC 13101, including promotion of fairness and efficiency in the transportation industry,” FMCSA Administrator Robin Hutcheson wrote in a letter to Chris Burroughs, vice president of government affairs at the TIA. “Therefore, FMCSA is denying TIA’s petition for rulemaking.”
In the same petition, TIA also requested that the FMCSA develop guidance on what legally constitutes a “dispatch service.”
FMCSA previously notified TIA of its intention to deny this portion of the petition via email on Dec. 2, 2022, and with a formal letter dated Feb. 21, 2023, as the agency had already issued interim guidance on the definitions of “broker” and “bona fide agent” that also considered the definition of a “dispatch service,” Hutcheson’s letter to Burroughs noted.
FMCSA expects to issue the final guidance on this issue in June 2023.
Additionally, the FMCSA has determined that petitions from the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition’s (SBTC) to amend the freight broker disclosure rule contain “adequate justification to initiative rulemaking on this matter,” Hutcheson wrote in a letter to SBTC Executive Director James Lamb.
SBTC proposed that the FMCSA add a subsection to the current rule that would prohibit brokers “from coercing or otherwise requiring carriers to waive their right to view transaction records as a condition of doing business.”
OOIDA is also requesting that the FMCSA require brokers to automatically provide electronic copies of each transaction record within 48 hours after a contract has been fulfilled.
“We urge the agency to take substantive actions that will improve broker transparency, eliminate broker nonpayment of claims and crack down on ever-increasing double brokering practices,” OOIDA President and CEO Todd Spencer wrote in the March 16 letter to the FMCSA. “Since the deregulation of the trucking industry, there has been a slow decay of fairness that was once the standard operating procedure between brokers and motor carriers. The agency must work to restore the fairness that is all too often absent in broker transactions.”
Hutcheson cautioned in her letter to Lamb that the FMCSA’s decision to grant the petition and commence a rulemaking proceeding does not mean that the regulatory changes will ultimately be adopted.
“FMCSA determines whether a proposed provision is adopted as part of a final rule on the basis of all available information developed in the course of the rulemaking proceeding, including public comments received on its proposals, consistent with statutory criteria,” she wrote.
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