FMCSA Administrator Says No Proof Yet of Any Freight Broker Transparency Violations
Washington D.C. – The Acting Administrator of the Federal Motor Carrier Safety Administration (FMCSA) says the Agency has yet to receive a single complaint about freight brokers violating federal transparency regulations.
During a webinar hosted by the Intermodal Association of North America (IANA) on Thursday, Jim Mullen, FMCSA Acting Administrator, said the Agency has yet to receive any proof freight brokers are violating 49 CFR 371.3.
The much discussed federal regulation requires freight brokers to keep records of each transaction and provide those records, upon request, to each party of the transaction including the motor carrier.
Mullen indicated that the Agency has yet to receive a single complaint thus far despite asking for them.
“The number of complaints that we have about the freight brokerage space and the rates right now aren’t relative to the transparency of 371.3,” Mullen stated. “In fact, I will tell you we don’t have a specific complaint that a broker failed to abide by 371.3 in a situation in which a motor carrier hadn’t waived contractually the ability to get the financial data that the regulation encompasses.”
A few moments later, Mullen then reiterated his point.
“I can’t state enough that we don’t have a specific violation in front of us on 371.3 in spite of essentially asking for it,” he said.
Mullen’s new comments come as protesters just ended a nearly three-week rally in Washington D.C. asking for, in part, the Agency to better enforce 371.3.
Trucking groups such as the Small Business in Transportation Coalition (SBTC) and the Owner Operator Independent Driver’s Association (OOIDA) have also petitioned the FMCSA in recent weeks demanding the Agency crack down on freight brokers which require carriers to waive its rights under the regulation as a condition of doing business.
Specifically, the SBTC seeks a new provision to 49 CFR 371 to state, “Brokers may not coerce or otherwise require parties to the transaction to waive their right to review the record of the transaction as a condition for doing business. No stipulation or clause in any contract shall exempt any broker from having to comply with this rule, upon demand, by a party to the transaction.”
OOIDA is asking the FMCSA to: 1) require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed, and 2) explicitly prohibit brokers from including any provision that requires a carrier to waive their rights to access the transaction records.
While Mullen did not address the SBTC’s request, he did discuss OOIDA’s petition.
“OOIDA has petitioned for a rulemaking to prohibit that contractual waiver. That’s under deliberation and step one of that deliberation is do we even have the statutory authorities to do such?” he questioned. “Expect perhaps a notice and comment on their petition.”
Mullen reportedly expressed a similar question as to the Agency’s authority to enforce the rule in a recent White House meeting with President Donald Trump’s Chief of Staff, Mark Meadows, and D.C. group representatives Mike Landis and C.J. Karman.
Additionally, Mullen also expressed questions about the intent of the regulation during Thursday’s webinar.
“I believe that when the reg was promulgated that the whole process was different. Motor carriers paid the brokers directly versus the shipper paying the brokers. There’s some perhaps difference of opinions as to what the net effect of that regulation was intended to be, but I’ll save that debate for a different time,” he said.
Mullen’s new statements are made all the more interesting given the instructions he was reportedly given by Chief of Staff Meadows.
According to Landis and Karman, Meadows directed Mullen to prepare a proposal to include three recommendations on how the Agency plans to solve the transparency issue, as well as to provide five broker set up packages which contain language requiring carriers to waive its rights to review the transaction record as a condition of doing business.
If it is Mullen’s position the Agency does not have the authority to enforce the rule, it could be a point of contention between the White House and the FMCSA.
Transportation Nation Network (TNN) has asked the Agency for its position on the matter and any new recommendations for enforcing the rule.
So far, we have not received an official statement though the Agency has been in communication with TNN regarding our request.
As for Mullen, he admitted today that the battle over this issue is just getting warmed up.
“We don’t expect this one to go away any time soon,” he stated.