The Federal Motor Carrier Safety Administration announced on Tuesday a listening session it will hold at a major truck show to get more public input that will help the agency crack down on illegal brokering.
FMCSA, which will host the session March 31 at the Mid America Trucking Show (MATS) in Louisville, Kentucky, wants to hear comments on two matters: interim guidance issued in November on the agency’s interpretation of how brokers and bona fide agents are defined, and a proposal issued on Jan. 5 to regulate five areas of broker financial responsibility.
Because the comment periods for the interim guidance and the proposed rule closed on Jan. 17 and March 6, respectively, FMCSA is reopening the comment period for the interim guidance and has extended the comment period for the proposed rule to accommodate issues raised at the MATS meeting. The new comment deadline for both is April 6.
“FMCSA is taking this action to better define the terms in response to a mandate in the Infrastructure Investment and Jobs Act,” the agency stated with regard to the interim guidance.
“While the interim guidance was effective immediately upon publication [on Nov. 16], FMCSA sought comments to the interim guidance and will issue final guidance by June 16, 2023.”
In addition to clarifying the definitions of brokers and bona fide agents, Congress directed that FMCSA must, at a minimum:
- Examine the role of a dispatch service in the transportation industry.
- Examine the extent to which dispatch services could be considered brokers or bona fide agents.
- Clarify the level of financial penalties for unauthorized brokerage activities applicable to a dispatch service.
FMCSA’s Jan. 5 proposed rule requested public comment in five areas:
- Assets readily available.
- Immediate suspension of broker/freight forwarder operating authority.
- Surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency.
- Enforcement authority.
- Entities eligible to provide trust funds for form BMC-85 trust fund filings.
The agency received relatively few comments on the two policies. It received just 14 comments on the initial guidelines, including from the American Trucking Associations’ Moving & Storage Conference (ATA-MSC), the Owner-Operator Independent Drivers Association, and the Small Business in Trucking Coalition (SBTC).
“The central problematic issue, here, is FMCSA draws misguided and improper conclusions that ‘arrangement of freight’ and ‘allocation of traffic’ can only be construed to mean arranging or allocating between a shipper and carrier and not a broker and carrier by a party purporting to be agents of competing carriers authorized by FMCSA,” SBTC stated.
“We believe if a third party is involved in any portion of the arrangement of transportation, including helping the carrier ‘find’ the load that the broker is trying to place for his shipper client, then that constitutes, well, arranging.”
The proposed rule received 55 comments, including from ATA-MSC. With regard to FMCSA considering assets readily available as it relates to trust funds secured with broker-funded assets, ATA-MSC contends that FMCSA is responsible for ensuring that trust funds “do not become a tool for bad actors to initiate brokerage companies, defraud motor carriers and shippers, and then move on when the call to make good on the guarantee comes in,” the association stated in its comments.
“Unfortunately, by taking a more permissive approach to what assets would be considered readily available, the agency risks opening the door to expanded — instead of restricted — use of broker-funded trust funds. While the agency’s proposal is clear that there are a number of asset types that are unable to meet an ability to liquidate within [the] seven business day standard, the proposal does not fully evaluate the more fundamental question of which asset types specifically meet a standard to serve as a financial guarantee.
“A prescriptive list would provide an answer to this question while also ensuring that the FMCSA is exercising its regulatory authority and responsibility to set financial responsibility policies that reduce unscrupulous brokers.”
Related articles:
- FMCSA commenters debate whether load boards should register as brokers
- FMCSA rejects 2nd shot at $75,000 truck-broker bond exemption
- What is a truck dispatcher?
Click for more FreightWaves articles by John Gallagher.
Chris
A lot needs to be done , and all they do is push the carrier to the cliff. More brokers less carriers unbelievable. FMCSA doesnt care about carriers 100000 regulations and the brokers taking us straight to bankruptcy. Nice job their doing . This government worries about ukraine and the House is ON fire . Who is going to stop the brokers??? Exactly
Tim
FMCSA… The S stands for safety. How is the definition of what a broker is related to safety?
Not arguing for or against the regulation of brokers. Just saying, why has this become the jurisdiction of the FMCSA?
dj nusle
when one of the biggest broker start with a t.l makes billions in profits id say most of em why we even need a broker put direct freght on net or something they make more on the load than the drivers haulin them goverment needs to wake up we are asking a fair shake is all bless all you hard working drivers
Armand
We the carries. Should. Get paid. Just like the broker charge the shippers before move their freight specially with unscrupulous. New Brokers that take off without pay the carrier
Kelly
We as drivers risk everything and brokers have minimal risk and risk nothing there should be caps on earning for the brokers since they carry little to no risk full transparency and proof of load payment should be included. The supply chain is limited and prices increased for all goods but pay for essential driver’s keeps going downward this has to stop or only mega carriers will monopolize the market and that will make things way worse
Gary Cahn
The FMCSA needs to hold many many hearings where truckers are allowed to tell their whole truth to them. They obviously have never, for the most part, talked to many truckers. Mayor Pete needs to climb out of his bunker and meet and talk with many many truckers. I don’t know how these people they can do their jobs properly without talking to real truckers.
Michelle Timberlake
There is a lot of illegal brokering trying to get us to run loads for only .23 cents to $1.62 per mile. We can’t run like this
Carew57867@aol.com
Brokers are corrupt. They will not have any jobs or make any money with rates 1.25 a mile.
Brokers are KILLING truckers. Cost of fuel has outrageous and the rates for loads pathetic.
As an independent operator we are feeling the pinch.
Who regulates this?????