Broker Transparency: Will We See Changes Soon?
October 10, 2024
It’s been over four years since the Owner-Operator Independent Drivers Association (OOIDA) petitioned the Federal Motor Carrier Safety Administration (FMCSA) to address the lack of broker transparency in the trucking industry.
The FMCSA accepted the petition in 2023, and a notice of proposed rulemaking to amend broker regulations was expected in October. Existing broker transparency regulations are in place, but they lack enforcement. OOIDA’s petition urged FMCSA to close loopholes that brokers use to circumvent these rules.
As October progresses, truckers continue to wait for any indication of action from FMCSA to address the longstanding issue of broker transparency. It is estimated that freight fraud costs the trucking industry as much as $800 million annually.
“For years, small-business truckers have expressed frustration that regulations designed to provide transparency are routinely evaded by brokers or simply not enforced by FMCSA,” said OOIDA Executive Vice President Lewie Pugh in written testimony to a House subcommittee in July. “CFR 371.3 mandates that brokers keep transaction records and permits each party to a brokered transaction to review these documents. These regulations are in place to protect motor carriers, brokers, and the public by ensuring the transparent and smooth movement of goods throughout the supply chain.”
In 2020, OOIDA petitioned FMCSA to:
Require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the service is completed.
Prohibit brokers from including any provision that requires carriers to waive their rights to access transaction records.
“This transparency helps owner-operators when brokers send them bills regarding disputed claims, such as damages,” Pugh said. “Without this information, it is impossible to know if these charges are legitimate. Unfortunately, many brokers deliberately implement hurdles to prevent a carrier from ever seeing this information.”
2023 Listening Session
Truckers’ frustration with the lack of broker transparency was evident during a listening session at the Mid-America Trucking Show in March 2023. Many drivers urged FMCSA to take immediate action.
“You have the power to change this,” truck driver Daniel Koors said. “You have the power to tell the brokers that they have to follow the guidelines. That’s what we’re asking for. This has been on the books since the Green Book (Federal Motor Carrier Safety Regulations Handbook) has been in existence. What we need is your help in making sure that brokers follow the rules. We don’t need you to set rates. We don’t need you to decide who makes a profit. By giving us transparency, we can negotiate fairer rates next time.”
What’s Next?
If FMCSA sticks to its schedule, a notice of proposed rulemaking regarding broker transparency could be released this month.
The good news is that the rulemaking is classified as “nonsignificant,” meaning it does not need to be sent to the White House Office of Management and Budget before being published in the Federal Register. This reduction in bureaucratic steps could expedite the process.
However, it remains unclear what exactly the FMCSA will propose.
Truckers remain hopeful that meaningful action will be taken. “If rules are put in place to improve broker transparency and the Department of Transportation enforces current regulations better, the economic stability of the trucking industry would be more assured, and the reliability of our supply chain would improve,” Pugh said.
As of mid-October, the FMCSA has yet to release the anticipated notice of proposed rulemaking on broker transparency. The trucking community's patience is wearing thin as the delay continues, with many drivers expressing concern over the lack of communication from the agency.
In response, OOIDA has issued another statement urging FMCSA to take immediate action. “We cannot afford further delays,” said Lewie Pugh. “Small-business truckers are struggling, and the lack of transparency only adds to their challenges. We need the FMCSA to fulfill its promise and ensure that brokers comply with existing regulations.”
Meanwhile, truckers have taken to social media to voice their frustration and share their stories of dealing with opaque broker practices. The call for transparency has gained significant traction, with many in the industry emphasizing that the time for action is now.
The FMCSA has yet to provide a clear timeline for when the proposed rulemaking will be released. As the industry waits, OOIDA and truckers nationwide remain committed to pushing for the changes needed to ensure a fair and transparent marketplace.
Truckers can still file claims against Brokers here at Freight Broker Complaint.
Written By: Michael Thomas LFS Consulting
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