After more than four and a half years since petitions were filed from trucking groups<\/a> seeking increased brokered freight transparency<\/a>, the Federal Motor Carrier Safety Administration on Wednesday will publish a notice of proposed rulemaking (NPRM) to revise the existing regulatory text around brokers\u2019 record-keeping requirements<\/a>.<\/p>\n In 2020, the FMCSA received petitions from the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) related to broker transparency. <\/p>\n OOIDA\u2019s petition asked FMCSA to require brokers to provide an electronic copy of each transaction record automatically within 48 hours after the contractual service has been completed, and explicitly prohibit brokers from including any provision in their contracts that requires a motor carrier to waive its rights to access the transaction records<\/a>.<\/p>\n Similarly, SBTC requested that FMCSA prohibit brokers from coercing or otherwise requiring parties to brokers\u2019 transactions to waive their right to review the record of the transaction as a condition for doing business, as well as to adopt regulatory language indicating that brokers\u2019 contracts may not include a stipulation or clause exempting the broker from having to comply with the transparency requirement.<\/p>\n [Related:\u00a0<\/b>Why brokers don’t want to give owner-ops transparency in freight transactions<\/a>]<\/p>\n While FMCSA is addressing the concerns over broker transparency, its proposal differs from the petitions from both of the associations. Instead, the NPRM proposes four amendments to the brokered freight transparency regulations (more details below):<\/p>\n In FMCSA\u2019s new NPRM, the agency said the proposed amendments to the existing broker transparency regulations in 49 Code of Federal Regulations 371.3<\/a> \u201care intended to reinforce broker transparency for motor carriers and to better tailor the required contents of the records to the purpose of broker transparency.\u201d<\/p>\n FMCSA noted in its proposal that while the current regulations are intended to provide broker transparency, the reality is that \u201cbroker transparency is rare in practice. The agency believes the revisions to the regulation will make it more likely that brokers will comply with their regulatory duty to provide information.\u201d<\/p>\n The agency also recognized the belief of some motor carriers that increased broker transparency \u201cwould have a material effect on negotiated freight rates.\u201d FMCSA said it believes other market factors, and not the availability of more information, \u201care likely more dominant in setting freight rates. However, the agency has not ruled out the possibility that motor carriers and shippers could negotiate for better rates over time using the broker transparency information.\u201d <\/p>\n FMCSA is accepting public comments on the proposed rule through Jan. 21, 2025<\/a>.. See below for more details on the specific information FMCSA is requesting.<\/i><\/p>\n [Related:<\/b>\u00a0‘Stop dealing with brokers who treat you like garbage’<\/a>]<\/p>\n FMCSA is proposing four amendments to 49 CFR 371.3, \u201cRecords to be kept by brokers.\u201d <\/p>\n The first provision would require property brokers to keep their records in an electronic format<\/b>. It would serve the purpose of broker transparency, FMCSA said, by making it easier for motor carriers and shippers to review broker records on request, and remotely, as compared to the current practice of some who respond to transparency requests by making only physical records available at their principal place of business<\/a>. FMCSA noted many brokers already maintain their records in an electronic format, so this requirement \u201cshould not impose a significant burden on these brokers,\u201d the agency believed.<\/p>\n Second, FMCSA is proposing to modernize and tailor the required contents of the records to better achieve broker transparency<\/b>. The current transparency requirement uses a distinction between brokerage and non-brokerage services, which is rooted in a previous regulatory approach, the agency noted. FMCSA is now proposing to eliminate this distinction 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 of payment, both from the shipper to the broker and from the broker to the carrier.<\/p>\n FMCSA said this is \u201csubstantially similar to the current requirement but removes the outdated distinction. The record would also be required to include any claims connected to the shipment, such as a shipper\u2019s claims for damage or delay.\u201d <\/p>\n FMCSA noted that this change would \u201censure 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.\u201d<\/p>\n [Related:\u00a0<\/b>FMCSA forces broker transparency from Uber Freight after double brokering scam<\/a>]<\/p>\n The third proposed amendment, and perhaps the most significant in the NPRM for motor carriers, would clarify the obligation imposed on brokers to respond to requests for transaction records and the process parties must follow when requesting and supplying such records<\/b>. The current regulation frames the broker transparency requirement as a right, given to the transacting parties, to review the records<\/a>. The proposed amendment would reframe broker transparency, rather, as a regulatory duty<\/i> imposed on brokers to provide records to the transacting parties.<\/p>\n [Related:<\/b>\u00a0Carriers’ right to review what the shipper paid for a brokered load<\/a>]<\/p>\n FMCSA noted that both petitions from OOIDA and SBTC sought to ban waivers of the requirements in 371.3(c)<\/a> to review a transaction record. The agency added, however, that parties are permitted to waive any right unless Congress, by statute, specifically makes a right non-waivable, which FMCSA found does not exist in this context.<\/p>\n However, to address concerns related to these waivers, FMCSA is proposing to reframe the disclosure requirement as a \u201cregulatory obligation.\u201d FMCSA said it believes this more closely aligns with the original intent of the regulation. <\/p>\n \u201cMoreover, a regulated entity must adhere to the regulations and cannot \u2018disguise its regulatory obligations as contractual ones,\u2019\u201d FMCSA said. <\/p>\n These changes \u201cwould clarify that brokers maintain a continuing duty to act fairly and honestly, and that visibility into the transaction records is the mechanism by which shippers and carriers can ensure that brokers are complying with this duty,\u201d FMCSA said. \u201cThe requirement to provide the records upon request would thus be made explicit as a regulatory obligation.\u201d<\/p>\n What the proposal doesn\u2019t do, however, is prohibit brokers from including confidentiality disclosures in their contracts with motor carriers. As long as brokers are complying with the requirement to disclose records upon request, the parties can negotiate and reach agreements regarding non-disclosure of the information to non-parties, the agency added.<\/p>\n The fourth proposed provision would require brokers to provide the records required to be maintained under 371.3(a)<\/a> within 48 hours when a party to the transaction requests those records<\/b>. 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. FMSCA noted that the \u201camendment plainly places the responsibility of delivering the information to the requestor on the broker.\u201d<\/p>\n [Related:\u00a0<\/b>Owner-ops sound off to FMCSA on need for more light on brokered rates<\/a>]<\/p>\n As mentioned above, the agency will receive comments on the NPRM for 60 days beginning Wednesday. Those can be filed here through Jan. 21, 2025.<\/a><\/p>\n In general, the agency is seeking feedback on all aspects of the proposal during the comment period. FMCSA did note, however, that it is particularly interested in comments that address the following issues (in addressing these topics, FMCSA asks that commenters number their remarks to correspond with the list below):<\/p>\n [Related:\u00a0<\/b>FMCSA denies brokers’ request to remove transparency regs<\/a>]<\/p>\n<\/div>\n\n
![\"Made](\"https:\/\/mindful-org-rr.imgix.net\/workspaces\/default\/uploads\/2024\/11\/JBLFLIP6BLKAM.CpkYwcbYwm.jpg?crop=focalpoint&fit=crop&fp-x=0.5&fp-y=0.5&h=167&w=250&auto=format%2Ccompress&q=70\")
<\/a><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\nProposed amendments to 49 CFR 371.3<\/b><\/h2>\n
FMCSA\u2019s request for comments<\/b><\/h2>\n
\n