Broker Transparency: More Time to Comment on Proposed Rule – Fleet Management

The agency said it received a request to reopen the comment period from the Small Business in Transportation Coalition and agreed to do so.

The proposal would revise property broker rules in response to petitions from the Owner-Operator Independent Drivers Association and the SBTC – petitions filed more than four years ago.

Those 2020 petitions asked that the FMCSA change regulations to require brokers to disclose (when requested by the carrier), among other items, amounts paid by the shipper to the broker for a shipment. 

The docket already contains nearly 5,000 comments. However, many of them share the same last name, and many are simply variations of “I agree,” or clearly following a cut-and-paste script, without any of the specific information FMCSA was looking for.

Why Owner-Operators and Small Fleets Want Changes to Broker Transparency Rules

Under current regulations, the parties to a brokered freight transaction have a right to review the broker’s record of the transaction, which stakeholders often refer to as “broker transparency.” 

However, in reality that rarely happens, according to critics.

OOIDA said brokers often find ways of avoiding the federal regulations that require them to keep records of transactions and make them available to motor carriers. 

For instance, it’s such a common practice for broker contracts to waive the requirements that OOIDA said truckers often have no other choice if they want to haul a brokered load.

Another tactic is that brokers require a carrier to come to the broker’s office to see the records in person. If the broker is in Ohio and the truck owner is in California, that’s not realistic.

Rule Would Prevent ‘Salami Slicing’

The National Owner Operators Association (a different organization than OOIDA), wrote expressing its “full support” for the rule change.

“The general freight brokerage sector currently suffers from systemic practices that disadvantage motor carriers, especially small owner operators,” it said.

“A widespread issue we witness daily is when brokers engage in practices where small amounts of money — detention fees, accessorial charges, tracking fees, lumper fees, fuel surcharges, quickpay fees, appointment fees, layovers, tonu, chargebacks, or other compensations — are withheld from carriers. 

“This practice, often referred to as the ‘salami slicing’ scheme, disproportionately impacts small carriers operating on thin margins,” the NOOA said in its comments.

“Many carriers hesitate to request transaction records due to fear of retaliation, such as being blacklisted from accessing future loads. Automatic disclosure would remove this risk, ensuring equitable treatment for all carriers.

“Carriers would no longer face prolonged disputes over withheld payments, as they would have immediate access to supporting documentation. As it stands currently, carriers are held liable for losses without knowing the financial stakes or details of the shipper’s invoice.”

FMCSA’s Proposed Broker Transparency Rule Would:

1. Require brokers to maintain records electronically so they would be easier to share. 
2. Revise the required contents of brokers’ records, including all charges and payments connected with the shipment, including a description, the amount, the date, and any claims associated with the shipment such as cargo damage.
3. Require brokers to provide records upon request. The current regulation frames the broker transparency requirement as a right to review the records. The proposed amendment would reframe it as a regulatory duty imposed on brokers.
4. Require brokers to provide the records within 48 hours when a party to the transaction requests those records.

Critics: Broker Transparency Proposal ‘Unworkable,’ ‘Counterproductive’

J.B. Hunt, which in 2023 brokered roughly 1 million shipments to third-party carriers, called the proposal  “a misguided regulatory intervention into a marketplace that is naturally responding to the increases and decreases in freight demand and transportation capacity.

“To blame a tougher carrier rate environment on brokers, as proponents of the Proposed Rule do, is to ignore the basic fundamentals of supply and demand.”

As both a broker and a motor carrier, J.B. Hunt cited several examples where it said the proposed rule is unworkable. The rates paid by shippers in a multimodal operation such as J.B. Hunt’s don’t necessarily break out the truck portion of the transport vs. the rail portion.

In addition, J.B. Hunt said that under the proposal, disclosing rate information could breach the confidentiality clauses of its contracts with its shippers.