The Federal Motor Carrier Safety Administration Tuesday announced plans to delay implementation of certain provisions of its rules requiring stricter financial responsibilities for brokers and freight forwarders from January 16, 2025, until a full year later -- January 16, 2026.
FMCSA said it would delay the new broker responsibilities to wait for its big registration system overhaul to take place.
"FMCSA is taking this action because the Agency determined that only its forthcoming online registration system will be used to accept filings and track notifications, and this functionality will not be added to its legacy systems," the agency wrote.
In a Notice of Proposed Rulemaking in January of 2023, FMCSA spelled out the new broker responsibilities, which include the provision requiring the "immediate suspension of broker/freight forwarder operating authority" when a "broker or freight forwarder’s available financial security falls below $75,000" in the event of valid claims.
That provision is among those affected by the delay to 2026, and one that owner-operators and other small carriers have long waited for. Today, a 30-day notice period is required before operating authority suspension/revocation, and bad actors and/or failing brokerages have been shown to exploit that time lag to deliver and collect on more freight with carriers, even though they "do not intend to pay" carriers at all, as FMCSA has previously noted.
The rule contains other requirements for brokers and freight forwarders, including on what the assets they need readily available, and responsibilities in cases of broker/freight forwarder financial failure or insolvency. The entities that grant the surety bonds also have a new reporting requirement under the regulation. "If a surety/trustee becomes aware that a broker or freight forwarder is experiencing financial failure or insolvency, it must notify FMCSA and initiate cancellation of the financial responsibility," FMCSA said.
Failure of the financial responsibility providers to comply comes with a penalty, as they "will be ineligible to provide financial responsibility for 3 years and may also be subject to a civil penalty."
For a detailed breakdown of what the reg requires, read here.
FMCSA's proposed new registration system, slated to come online in 2025, includes additional identity verification steps as an anti-fraud measure.
The agency delayed the implementation of the rule "so that FMCSA can make the new online registration system available to entities required to register and make filings in the system. This extension is also intended to provide users with an opportunity to begin using, and become familiar with, the new online registration system before compliance with the system becomes mandatory."
The Owner-Operator Independent Drivers Association commented on FMCSA's November Notice of Proposed Rulemaking supporting the rule, but predicted an inevitable delay.
"We alerted FMCSA nearly a year ago that 'the Unified Registration System remains a work in progress and there have been numerous problems with URS rollout historically.'" OOIDA commented. "We mentioned skepticism about the Final Rule providing sufficient time to complete the URS rulemaking process before the January 2025 compliance date for the Immediate Suspension of Broker/Freight Forwarder Operating Authority provision. We are disappointed these warnings proved accurate."
[Related: FMCSA proposing new broker, freight forwarder financial responsibility regs]
