FMCSA to Consider Broker-Shipper Transparency
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Federal trucking regulators have confirmed they plan to consider a controversial request by the Owner-Operator Independent Drivers Association seeking a rulemaking to require broker-shipper pricing documents be shared with truckers carrying the load.
The Federal Motor Carrier Safety Administration said in a June 16 Federal Register post on broker and bona fide agent definitions that the agency, “at the appropriate time,” will take up the issue of OOIDA’s 2020 transparency petition to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed.
The Transportation Intermediaries Association is actively fighting the OOIDA petition, arguing that the documents are private transactions.
“OOIDA has long fought to protect our members’ rights to access contractual documents guaranteed to them under federal regulations,” OOIDA CEO Todd Spencer wrote in a Sept. 22 follow-up letter to FMCSA Administrator Robin Hutcheson. “Not only does access to these documents protect carriers from unscrupulous brokers, it helps to protect the public by providing a marketplace in which each party behaves in a clear and transparent manner.”
“It has been over two years since OOIDA submitted its original petition, 20 months since the most recent comment period ended for broker transparency-related dockets, and nearly 1,500 comments have been filed on the dockets listed above,” the letter said. “For that reason, we believe an update is warranted on where the agency stands on our outstanding petition and related comments from motor carriers.”
In an interview, Spencer said he hopes the agency will soon act on OOIDA’s petition. He said that if the agency issues a regulation requiring the transparency, it could lower costs for consumers.
“From the perspective of people who operate trucks, we assume that they [brokers] don’t want to disclose information because the position they have right now is advantageous to them,” Spencer said. “Obviously, if you’re the carrier that moved the goods then you’re a party that’s entitled to see the information. Who knows what they’re hiding.”
TIA President Anne Reinke disagrees. She thinks OOIDA is seeking the pricing between the shipper and broker so they can leverage their own pricing, but that the broker shipper pricing information is private.
“They’re using a regulatory method to use leverage to negotiate,” Reinke said. “That doesn’t sit well with us. It’s not clear to me what they think we’re protecting. There is some indication that FMCSA is going to act on the OOIDA petition, but they have not predisposed to act a certain way.”
Reinke said that during the COVID-19 epidemic, shipping prices went “to the basement, and brokers were blamed for driving prices down, and making money off the pandemic.”
“Nothing could be further from the truth,” she added. Since then, carrier rates have “gone through the roof,” because people have been ordering things “out the ying-yang.”
In December, TIA made it clear it is fighting OOIDA’s petition, asking regulators to sunset a decades-old regulation that the group argues is out of alignment with today’s brokerage marketplace.
The regulation, 49 CFR 371.3, is in the federal rulebook. According to TIA Vice President of Government Affairs Chris Burroughs, the 1980 law stretches back to a very different time in the brokerage business.
“Motor carriers paid brokers a commission, and there was concern from the [Interstate Commerce Commission] of rebating and double-dipping in profits when brokers and shippers shared common ownership,” he said. “The marketplace does not operate like that today. It is drastically different, with two separate business transactions between the broker-shipper and the broker-carrier.”
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