FMCSA Proposes New Broker Transparency Rules: Industry Reacts
The Federal Motor Carrier Safety Administration (FMCSA) has proposed significant revisions to broker transparency regulations, aiming to enhance recordkeeping and accessibility for carriers and shippers. The proposed changes, published in the Federal Register on Nov. 20, are intended to modernize existing rules and address long-standing concerns about broker practices. Stakeholders have 60 days to comment on the proposal.
Key Proposed Changes by FMCSA:
Electronic Recordkeeping:FMCSA aims to require brokers to maintain records in electronic formats, simplifying access for carriers and shippers. This shift would replace the current practice where some brokers only provide physical records at their principal place of business. The agency noted that many brokers already use electronic records.
Expanded Record Details:The proposed revisions would eliminate the distinction between brokerage and non-brokerage services in records. Brokers would need to document all charges, payments, and claims associated with a shipment, including dates and descriptions. This increased detail is expected to offer better transparency for resolving disputes without resorting to legal action.
Mandatory Record Sharing:The proposal reframes record sharing as a regulatory obligation for brokers, rather than just a right for transacting parties. Brokers would be required to provide transaction records upon request.
48-Hour Response Window:To ensure timely resolution of disputes, brokers would have 48 hours to provide requested records. This change is intended to streamline transparency and accountability.
Industry Response: Divided Opinions
Support from Owner-Operator Independent Drivers Association (OOIDA):
OOIDA praised FMCSA’s efforts, especially the requirement for electronic records.“Broker transparency is necessary for a fair, efficient transportation system, particularly to help carriers defend themselves against claims,” said OOIDA President Todd Spencer. The group welcomed the long-awaited rulemaking and vowed to push for robust enforcement to ensure compliance.
Criticism from Small Business in Transportation Coalition (SBTC):
James Lamb, Executive Director of SBTC, criticized the proposal as insufficient.“FMCSA has gutted our request while trying to make an appearance of strengthening the rule,” Lamb argued, expressing concern that the changes favor larger brokers and neglect the needs of small carriers. SBTC urged truckers to file comments demanding a prohibition on contractual waivers that prevent transparency.
Opposition from Transportation Intermediaries Association (TIA):
TIA expressed disappointment with FMCSA’s focus on broker transparency, arguing that freight fraud is a more urgent issue.“During the COVID-19 pandemic, there were zero complaints related to broker transparency but over 80,000 complaints about freight fraud,” TIA stated. The group believes FMCSA’s priorities are misaligned.
FMCSA Seeks Public Input
FMCSA is inviting stakeholders to comment on eight specific questions, including the potential impact of the proposed changes on freight rates, the feasibility of electronic recordkeeping, and whether the 48-hour response timeframe imposes an undue burden on brokers.
Truckers and other industry professionals can submit comments on Docket No. FMCSA-2023-0257 through Regulations.gov until mid-January.
The proposed rule stems from petitions filed in 2020 by OOIDA and SBTC, both of which sought stronger transparency regulations. While the FMCSA acknowledged that market factors primarily influence freight rates, it suggested that increased transparency could help carriers negotiate better terms over time.
Looking Ahead
As the trucking industry evaluates these proposed changes, the FMCSA's final decision will likely shape the future of broker-carrier relations. Industry stakeholders are encouraged to participate in the comment period to ensure their voices are heard in this critical regulatory discussion.