The U.S. Department of Transportation recently posted its planned Significant Rulemakings, and while the headlines mostly centered around the revelation of a 68 mph target for speed limiters, which was quickly retracted, another detail has ignited outrage from trucking groups and individuals.
The previous spring regs agenda released by DOT had one particular issue slated for action in June of this year: potential measures to ensure greater transparency in brokered freight transactions. Yet this latest rulemaking document said FMCSA will extend the schedule for acting on transparency until Oct. 31, 2024. This comes after repeated notice requests from the Owner-Operator Independent Drivers Association and the Small Business in Transportation Coalition to act on their separate petitions, likewise numerous owner-operators' voices raised to demand similar at FMCSA's Mid-America Trucking Show session in March.
OOIDA petitioned FMCSA to require brokers to provide an electronic copy of each transaction record showing all fees/commissions 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.
With rates down at abysmal lows and diesel set to climb throughout the winter, the owner-operators who make up OOIDA's membership have seen their income dive on average nearly 10% year over year, by one recent estimate.
SBTC also requested that FMCSA prohibit brokers from coercing or otherwise requiring parties to brokers’ transactions to waive their right to review the record of the transaction as a condition for doing business. The organization asked for regulatory language indicating that brokers’ contracts may not include a stipulation or clause exempting the broker from having to comply with the transparency requirement, too.
In a strongly worded statement, OOIDA President Todd Spencer made reference to the long history of the current transparency regulation -- 49 Code of Federal Regulations 371.3(c), establishing carriers' right to review records of brokered transactions. He had this to say about what's looking like another 13 months at least before any action:
"The continued delay is BS -- transparency has been required since 1980! FMCSA stated in March 2023 the timeframe would be announced in the upcoming unified regulatory agenda. The agenda indicated June and now they’ve inexplicably delayed more than a year! The public docket from our petition, as well as the listening sessions they’ve held, provided an abundance of material to produce a meaningful proposal by now. FMCSA is completely aware of the rampant broker fraud that continues to take advantage of truckers. This is a time they should be expediting this and anything else they can do to stop this rampant criminal activity. Hundreds of thousands of small business truckers are simply trying to put food on the table and FMCSA has -- once again -- turned their backs on hardworking American families."
Illusrating the problem calls for greater transparency seek to address, a small fleet recent sent Overdrive a prime example of brokered margins in excess of what's reasonable when that carrier inked a new contract with a steel manufacturer on the lane between Michigan and Buffalo at $1,700 for the run.
The carrier had run this lane hauling a similar product more than a year ago numerous times with a few different brokers at rates between $1,000 and $1,2000
"The actual steel manufacturer is paying $500 more than the brokers were paying last year," the carrier said. If that's the case now in a down freight market, he shudders to think how much higher the broker's margin was a year and more ago.