The FMCSA (Federal Motor Carrier Safety Administration) is tightening regulations for broker-keeping by proposing new rules for broker transparency. In 2020, the Owner-Operator Independent Drivers Association (OOIDA) and Small Businesses In Transportation Coalition (SBTC) petitioned the FMSCA for improvements in transparency. In particular, they asked for better laws for the brokers’ disclosure of information when the carriers request it. An example of the info includes the amount the shipper pays to a broker for a shipment. The FMSCA recently proposed a rulemaking in response to the petitions in which individuals can submit feedback until January 21st. If the transparency rule follows through, it could impact domestic shipping for brokers, shippers, and carriers.
What Are The New Rules For Broker Transparency?
After the OOIDA and SBTC petitioned the FMSCA in 2020, the FMSCA released a proposal notice this week. One of the main changes in the proposal is that the broker provides records within 48 hours of the request. These records include transactions such as services and payments that parties make to the brokers. The reason is to create a layer of transparency by allowing carriers the right to review the records. FMSCA proposed a 48-hour timeframe to ensure the requesting party receives the record promptly. This is essential in finding resolutions to transaction issues promptly. Another significant change that the FMSCA proposes is a revision to the contents of a broker’s records.
FMSCA proposes that the record for each shipment in the transaction all charges and payments related to the shipment. The record should contain a description, date, amount, and claims such as damages or delays. A reason behind the amendment is to create complete visibility in the transactions and resolve issues cost-effectively. FMSCA may also soon require that brokers keep records in electronic format. Maintaining records electronically lets shippers evaluate records quickly and remotely. This differs from how certain brokers only have physical records at their facilities. FMSCA notes that the majority of brokers already keep their records electronically.
What Can This Mean For Domestic Shipping?
The implementation of the proposal can have various implications for the transportation industry. Along with transparency, the FMSCA proposes this regulation to help carriers protect themselves against claims on a shipment. Some of these claims can include cargo damage and shipping delays. The OOIDA notes that brokers tend to find methods of avoiding federal regulations, and the proposal is a transparency solution. Carriers also feel that the ability to access information will directly influence setting freight rates. Brokers had an opposite view on the proposal, with organizations calling it a “misguided overreach.” They believe the rule is outdated in today’s trucking industry and that more concerning issues like freight fraud exist.
Despite the arguments against the new regulations, many feel that shippers and carriers need transparency in today’s transportation industry. While FMCSA may not implement the rule immediately, finding an ideal freight broker is essential when transporting goods. Brokers are the middleman between the shippers and carriers coordinating freight movement. Qualities to consider when deciding on one include expertise, relationships, specialization, and communication. A1 Freight Solutions understands this and has brokers with all these qualities and numerous shipping solutions. Speak to our freight brokers at info@a1fsinc or 786-375-9420 to begin shipping your cargo anywhere in the U.S.