The head of the Federal Motor Carrier Safety Administration (FMCSA) says that his agency is actively investigating several allegations of violations by freight brokers.
During a June 23 Truckload Carriers Association’s Virtual Safety and Security Meeting webinar, FMCSA Acting Administrator Jim Mullen appeared to field questions during a general session.
Mullen addressed one of the year’s most hot button issues in trucking when he was asked whether there were any new developments on broker transparency and enforcement.
In Mullen’s remarks below, he acknowledges that active investigation into broker complaints are taking place and tells trucking industry stakeholders to expect a regulatory notice on the issue
“Let’s be clear, the regulations says what it says as to what the broker is obligate to not only maintain but give to the motor carrier upon request. And we have received… I don’t remember the exact count. It’s not a lot. Maybe five to ten allegations where the broker didn’t provide the data required by the regulation and — and here’s the important part — and the motor carrier didn’t waive that obligation imposed upon the broker in the broker/carrier agreement. So we’re investigating those, there’s been a Notice of Violation issued to a broker that didn’t provide it, we verified that the motor carrier didn’t waive it, and we issued the Notice of Violation to the broker and if they don’t come into compliance then of course the next step is the Notice of Claim.
Now there are many people that will say to us, you’re missing the point, Mullen. The brokers are trying to circumvent the process by requiring the waiver and if the motor carrier doesn’t waive it they get black balled. I understand the concept. But the regulation says what it says and I think most people understand that the regulation is very specific. OOIDA, in fact, filed a petition for rule making on this issue requiring two things. One, that the transfer of this data be automatic within 48 hours of the completion of the load or the transaction. And secondly, that you cannot contractually waive the provisions contained in the 371.3.
So expect, in all likelihood, a notice, a Federal Register Notice, from agency on this issue, on the petition not only by OOIDA but by the Small Business Trucking Coalition filed a petition for rule making on the same issue, a little different in scope, but it did cover the same issues, and we’ll seek public comment on that. And again, you have to look at this with an eye of what is within the agency’s statutory authorities. So you could say that it makes sense that the FMCSA regulate and prohibit these contractual waivers, but then do we have the authority to even do that. I read the trade journals. I know there’s a difference of opinions on this. I know that some folks are dissatisfied at the pace by which the agency is working and that some folks are dissatisfied that we aren’t already taking action against those brokers who do have it in their broker/carrier agreement and I would say this is what the process is for, hence why we’re going to do the notice and comment period.
My understanding is that there’s some other federal agencies involved in this situation that have jurisdiction that we don’t and I don’t know enough to comment on that because they wouldn’t tell me what exactly they’re doing at this point.”
The announcement of an active investigation into allegations of violations of broker transparency come after high profile nationwide protests during which truckers rallied against cheap freight and said that brokers were to blame for plummeting rates.
For three weeks, a group of truckers protested on Constitution Avenue on Washington D.C. to raise awareness about broker issues and low rates. Their message made its way all the way to President Trump, who Tweeted in support of truckers and went so far as to say that truckers are being “price gouged.”
The Washington D.C. protest activities ended shortly after trucking representatives Mike Landis and Sergey “C.J.” Karman met with Mullen and White House Chief of Staff Mark Meadows at the White House to ask for broker transparency.