In response to petitions filed in May 2020 by the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC), the Federal Motor Carrier Safety Administration (FMCSA) has proposed a rule to enhance transparency in transactions involving truck brokers. These organizations highlighted concerns about fraudulent practices and a lack of clarity in the rate-making process.
Key Proposals:
- Automatic Disclosure of Transaction Information: OOIDA requested that brokers be required to provide transaction details, including rate and cost information, within 48 hours of a contract’s completion.
- Prohibition on Waiver Clauses: Both OOIDA and SBTC urged FMCSA to prevent brokers from including clauses in contracts that require carriers to waive their rights to review transaction records.
- New Regulatory Language: SBTC proposed regulatory amendments to ensure broker contracts explicitly comply with transparency requirements, prohibiting exemptions for brokers.
The FMCSA’s proposal is seen as a step forward in addressing long-standing concerns about potential fraud and ensuring fair practices in broker-carrier agreements. The rule aims to provide carriers with timely access to transaction records, bolstering their ability to verify payments and protect against deceptive practices
Further details will emerge as FMCSA reviews public feedback and finalizes the proposed regulations.
The FMCSA has proposed four major revisions to its broker transparency rules, addressing concerns about accessibility and fairness in broker transactions. Here’s a summary of the key changes:
- Mandatory Electronic Records: Brokers must maintain transaction records in an electronic format, making it easier for carriers and shippers to access them remotely. This change modernizes the process and reduces reliance on physical records, which can be inconvenient for requesting parties.
- Detailed Record-Keeping Requirements: Brokers must include itemized details in their records for each shipment, such as charges, payments, descriptions, amounts, dates, and claims (e.g., damages or delays). The goal is to provide comprehensive visibility into all financial aspects of a transaction, facilitating dispute resolution without costly legal interventions.
- Mandatory Provision of Records: Transparency is reframed as a regulatory duty for brokers, who must proactively provide transaction records to transacting parties upon request, rather than framing it as an optional right for carriers and shippers.
- 48-Hour Response Time: Brokers must deliver the requested records within 48 hours to ensure timely resolution of payment or service-related disputes.
Reactions:
- Small Business in Transportation Coalition (SBTC): Expressed dissatisfaction, calling the proposed changes insufficient and accusing FMCSA of prioritizing the interests of large brokers over carriers. The SBTC is advocating for stronger prohibitions against contractual waivers that restrict access to transaction details.
- Carriers and Other Stakeholders: Mixed reactions have emerged, with some supporting increased transparency but others criticizing the measures as maintaining the status quo.
The proposed changes aim to increase fairness but face criticism for potentially favoring larger brokerage firms. FMCSA encourages public comments to refine the rulemaking process
