Congress eyes broker bill

Jill Dunn | June 26, 2011

For the second year running, Congress is considering a bill trucking and broker organizations say will mitigate unscrupulous broker practices.

On June 24, U.S. Rep. Frank Guinta (R-N.H.) introduced the “Fighting Fraud in Transportation Act,” after working on it with the Owner-Operator Independent Drivers Association, American Trucking Associations and Transportation Intermediaries Association.

Todd Spencer, OOIDA executive vice president, said current law provides too much opportunity for fraud. “Too often, we’ve seen deceitful brokers get away with collecting payments from shippers, but cheating truckers out of what is rightfully theirs,” he said.

TIA, the third-party logistics association, said the federal broker bond requirement has been $10,000 since the mid-1980s. In recent years, some transportation associations pushed for requiring escrow accounts and upping bond to $500,000, while there was a Congressional move to demand brokers disclose profit margin on invoices.

The trucking and brokers industries compromised with a $100,000 bond requirement and the Federal Motor Carrier Safety Administration Administrator would have the option of reconsidering that amount every five years.

The bill would demand the U.S. Department of Transportation establish an annual screening of registered motor carriers, brokers and freight forwarders and list only those with current operating authority.

If the legislation is enacted, companies would have up to four years to comply with new regulations that:

  • Increase requirements and disclosures for seeking broker or freight forwarder authority.
  • Clarifies that carriers need separate broker or forwarder authority and bond to broker freight. 
  • Establish significant penalties for violating broker regulations.
  • Set strict guidelines on companies that provide and administer brokers with surety bonds.

U.S. Rep. Russ Carnahan (D-Mo.) co-sponsored the bill, H.R. 2357, which was referred to the House transportation committee. TIA stated that the bill could be attached to a more comprehensive transportation-related bill.

Last year, OOIDA and TIA supported the Motor Carrier Protection Act, or S.3483, which was referred to the transportation committee with one sponsor.