FMCSA issues long-awaited freight broker transparency rule proposal

The Federal Motor Carrier Safety Administration (FMCSA) will issue a rule proposal to increase transparency in freight broker and motor carrier transactions in response to petitions from trucking groups.

In a Notice of Proposed Rulemaking (NPRM) to be published in the Federal Register on November 20, 2024, the FMCSA proposed amendments to current freight broker regulations in order to increase transparency.

The NPRM was issued in response to petitions from the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC).

Both the SBTC and OOIDA petitioned FMCSA for increased broker transparency in May 2020.

“Brokers often include provisions in their contracts with motor carriers that require motor carriers to waive their ability to review broker records. In addition, even without waiver clauses, motor carriers often face practical hurdles in accessing records that they should be able to review under the current regulations. As a result of the SBTC and OOIDA petitions, the Agency reviewed its property broker recordkeeping requirements and is proposing certain amendments to those requirements. The proposed amendments are intended to reinforce broker transparency for motor carriers and to better tailor the required contents of the records to the purpose of broker transparency,” FMCSA said.

Four Proposed Amendments To Broker Requirements

1. Require property brokers to keep their records in an electronic format. According to FMCSA, this rule change would make it easier to “review broker records on request, and remotely, as compared to the current practice of some brokers who respond to transparency requests by making only physical records available at their principal place of business.”
2. Modernize and tailor the required contents of the records to better achieve broker transparency. The provision would eliminate the distinction between brokerage and non-brokerage services and instead require that the records contain, for each shipment in the transaction, all charges and payments connected to the shipment, including a description, amount, and date. “This amendment would ensure the parties have full visibility into the payments, fees, and charges associated with the transaction so they can resolve issues and disputes among themselves without resorting to costlier remedies,” officials say.
3. Reframe broker transparency as a regulatory duty imposed on brokers to provide records to the transacting parties. The FMCSA notes that current regulations
   frame the broker transparency requirement as a right, given to the transacting parties, to review the records. The amendment would place the regulatory burden on brokers to provide requested records.
4. Require brokers to provide the records within 48 hours when a party to the transaction requests those records. “This provision is intended to ensure that the requesting party receives the records in a timely manner, to support the resolution of issues around service or payment,” FMCSA said.

“Four years ago we asked FMCSA to improve broker transparency and we welcome this overdue Notice of Proposed Rulemaking. We appreciate that FMCSA incorporated input from our petition, including a requirement to make records available electronically and emphasizing that brokers have a duty to comply with regulations. As FMCSA noted, broker transparency is necessary for a fair, efficient transportation system, and is especially important to help carriers defend themselves against alleged claims on a shipment. We look forward to responding to FMCSA’s request for feedback, and most importantly, will continue to press the agency, lawmakers, and other regulators to make all resources available to enforce these regulations and ensure that brokers finally play by the rules,” said OOIDA President Todd Spencer.

The FMCSA will accept public comment on the NPRM for 60 days following the November 20 publication in the Federal Register. Follow this link after the publication date to access the Federal Register and leave a comment.

Earlier this month, the FMCSA pushed back compliance dates on the “Broker and Freight Forwarder Financial Responsibility” Final Rule intended to better protect truckers from brokers who fail to pay.