It has been more than four years since the Owner-Operator Independent Drivers Association petitioned the Federal Motor Carrier Safety Administration to do something about the lack of broker transparency in the trucking industry.
FMCSA accepted that petition in 2023, and the most recent regulatory agenda targeted October for the release of a notice of proposed rulemaking that would amend broker rules. Broker transparency regulations already exist but are not enforced. OOIDA’s petition asked the agency to close the loopholes that allow brokers to evade current rules.
Now that we are more than a week into October, truckers continue to wait to see if and when the agency will address a longtime issue. Freight fraud has been estimated to cost 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,” OOIDA Executive Vice President Lewie Pugh submitted 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 contractual service has been completed
- Explicitly prohibit brokers from including any provision that requires carriers to waive their rights to access the 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 they know will prevent a carrier from ever seeing this information.”
2023 listening session
Truckers’ frustration with the lack of broker transparency was made evident during a listening session at the Mid-America Trucking Show in March 2023.
Daniel Koors was among a large group of truck drivers who urged FMCSA to take immediate action.
“You have the power to change this,” 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 guys to set rates. We don’t need you to set who makes profit and who doesn’t. By giving us that transparency, we can go in the next time and negotiate a fairer rate.”
What’s next?
If FMCSA keeps to its schedule, it should release a notice of proposed rulemaking regarding broker transparency sometime this month.
The good news is that because the rulemaking is labeled as “nonsignificant,” it does not need to be sent to the White House Office of Management and Budget before being published in the Federal Register. Considering the pace of government, any reduction of red tape could expedite the process.
What’s still unclear, however, is what exactly the agency will propose.
Truckers are hopeful that real action will be taken.
“If rules are promulgated to improve broker transparency and the Department of Transportation better enforces current regulations, the economic stability of the trucking industry would be more assured and the reliability of our supply chain would improve,” Pugh said. LL
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