FMCSA Responds After White House Demands Enforcement of Broker Transparency Rule
Washington D.C. – The Federal Motor Carrier Safety Administration (FMCSA) is responding for the first time since the Agency was reportedly instructed by the White House this week to better enforce regulations requiring freight rate transparency.
On Wednesday, Mark Meadows, President Donald Trump’s Chief of Staff, met with two representatives of the truckers who protested in Washington D.C. for nearly three weeks.
The group, which descended on D.C. on May 1 to bring awareness to low freight rates being offered by brokers amid the COVID-19 national emergency, was represented by Mike Landis, founder of the United States Transportation Alliance (USTA) and Sergey “C.J.” Karman, founder and CEO of Ezlogz.
Also present in the meeting was FMCSA Acting Administrator Jim Mullen and White House Staff Secretary Derek Lyons.
According to both Karman and Landis who spoke with Transportation Nation Network (TNN) on Thursday, Mullen didn’t seem particularly enthused about being there.
“I don’t think [Mullen] was excited being there,” Karman said. “He was put on the spot about a lot of things.”
Specifically, Meadows took Mullen to task for the Agency not adequately enforcing federal regulations requiring freight rate transparency, Karman and Landis reported.
It was Mullen who first brought up the now famous 49 CFR 371.3 provision which requires freight brokers to provide a record of the load transaction to the carrier upon request after the delivery is made.
To illustrate the problems that enforcing the much-debated provision would cause among shippers, Karman and Landis said Mullen used an example.
He made the case that Coca-Cola does not want Pepsi to know its transportation costs and vice versa.
“I don’t believe that argument for a second because honestly, I don’t see Coke and Pepsi caring what the other pays for transportation,” Meadows replied, according to Landis.
“You could see the frustration in Mullen’s face,” Landis described.
Then Karman and Landis explained to Meadows that it has become common practice in the brokerage business to require carriers to waive its rights under 371.3 in order to do business with many of the brokers.
“You know about this?” Meadows asked Mullen.
When Mullen acknowledged he was aware of the widespread practice, Meadows then incredulously questioned, “Aren’t you supposed to enforce this?”
“That’s a problem and you’re going to have to fix that,” Meadows reportedly instructed Mullen.
Meadows then 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.
“I’m going to call the CEO’s of these [brokerage] companies to see if they know what they are really doing,” Meadows reportedly stated.
The FMCSA provided TNN with an exclusive statement on Thursday addressing this issue.
“FMCSA continues to monitor the concerns of truckers regarding broker rates, transparency, and practices,” an Agency spokesperson stated. “The Administration takes these concerns seriously and supports transparency in the motor carrier industry.”
What about putting forward solutions, as Mr. Meadows reportedly directed?
“While FMCSA doesn’t have regulatory authority over broker rates, the Agency is actively engaged in finding and evaluating solutions that may address these concerns and assist our nation’s truckers,” the spokesperson said.
Further, the Agency spokesperson again reminded TNN that during this Administration, “FMCSA has been committed to directly engaging with drivers and CMV stakeholders throughout the country and has taken action—such as historic hours-of-service reform—to better the lives of commercial drivers and improve safety on America’s roadways.”
Meadows did not put a timetable on the FMCSA to provide the White House with its recommendations.
However, according to both Karman and Landis, Meadows’s tone was one that implied urgency.
TNN has much more from our interview with Karman and Landis about Wednesday’s White House meeting, so stay logged on to TransportationNation.com for more soon.