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.


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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.

FMCSA Responds

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.

 


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Comment (9)

  1. Nobody’s gonna pick your loads to grow your business but YOU.
    Grow up and establish relationships, stop taking time off to visit your nonworking wife and 25 kids you produced.
    Learn English first and get involved with non spanish neighbors.
    Just cuz you moved here, you gotta be an American in custom and heart.
    Dont move here just to make money and think we cant see right through you.

  2. Jim Mullen has been heard to say, “We’ve got to tamp this thing down” when referring to the DC Truckers Mayday Rally. A real fine servant of the People. He is using his position as Deputy Administrator of the Federal Motor Carrier Safety Administration to advance his personal vendetta towards leaders of the DC Truckers Mayday Rally. In short, he was caught with his rhetorical pants down. Both he and Elaine Chao need to resign … immediately.

      1. The Quantum Video, which is posted here too, went viral during the recent DC Truckers Mayday Rally. It has been seen over 36,000 times in the United States. It has also been viewed globally.

        I assert the “Quantum” discussion and the on-going DC Truckers’ Mayday protest on-going along Constitution Ave is a GIG ECONOMY issue. Call it what you will … 1099s, California AB5, a reordering of American Priorities … Politicians, are you listening?

        QUANTUM – 1.00 (1989) = 2.08 (2020) SOURCE: According to the Bureau of Labor Statistics consumer price index, today’s prices in 2020 are 108.16% higher than average prices since 1989. The U.S. dollar experienced an average inflation rate of 2.39% per year during this period, meaning the real value of a dollar decreased.

        In other words, $1 in 1989 is equivalent in purchasing power to about $2.08 in 2020, a difference of $1.08 over 31 years.

        Let’s try to narrow that argument. I will use the US DOT 2017 Census Report as my basis.

        There are 1,608,168 Active USDOT numbers, give or take ten per cent due to attrition or entry.

        There are 818278 active USDOT records which are for hire.

        There are approximately 3.5 million professional truck drivers in the United States, according to estimates by the American Trucking Association. On average, approximately 2 drivers per every US DOT registered company. There are 1,456,249 registered with the USDOT as of 2017 Census which are “for hire,” “private fleet,” or both.

        The Pareto Principle aka the 80/20 rule. Eighty percent of the nation’s cargo is handled by twenty percent of the carrier actors and vice-versa. The total number of people employed in the industry, including those in positions that do not entail driving, exceeds 8.7 million.

        Of the 8.7 million employed in total, using the 80/20 rule, for the sake of argument, 1.75 million are employed by the megas. 6.96 million earn their living as small operations.

        Look at the pie. 80 per cent of freight revenues is cut up by 1.75 million people. 20 per cent of the revenues is cut up by 6.96 million people. That ain’t a recipe for success. Furthermore, if those 6.96 million little guys have to feed off of the table scraps of the megas, that revenue, too, is being stepped on before the little guy gets his share. I wouldn’t stay in this business as an owner-operator for all the tea in China.

        Overly simplistic, I know. But this is what you get with deregulation and eased entry into the business. The bottom lines of mega-carriers, mega-brokers, equipment financiers, and morticians get fattened while the greater share of this industry’s participants get health issues, broken marriages, bankruptcies, lost property, and death. From the Federal point of view, the lost tax revenue must be astounding.

        This is unsustainable. What should Trump tell these people? Remember, these people overwhelmingly are his base. Should they fold up their tents and go work at Walmart? Do they just go away and die? These people, to quote Jimmy Stewart, do most of the living and working and dying here. Is there something wrong with wanting better housing? Good food and healthcare for their spouses and kids? Good schools? Some quality time off? That is what this is about. The overall playing field in transport leans heavily away from 80 per cent of the people in this business. This must be redressed. This is why I think the Quantum Agreement is a fair place to start.

  3. This is what needs to be done on every load confirmation no matter if it’s 1 pallel1 Box or 1 truckload there is a load confirmation. On that load confirmation there needs to be transparency. Number one rate of load number two money being paid to broker number 3 money being paid to Carrier number four fuel surcharge being paid to Carrier. Never again allowing brokers to steal from rate or fuel surcharge. Garret A.Sudbring

  4. This is what needs to be done on every load confirmation no matter if it’s 1 pallel1 Box or 1 truckload there is a load confirmation. On that load confirmation there needs to be transparency. Number one rate of load number two money being paid to broker number 3 money being paid to Carrier number four fuel surcharge being paid to Carrier. Never again allowing brokers to steal from rate or fuel surcharge. Brokers all they have in a load is a phone call.Carriers have there time,were on equipment, tires, lights, brakes ,insurance, roadtax, statetax federal tax,on every new tire we buy$25.00tax,IFTA TAX QUATERLY. THIS IS WHY 800 CARRIERS OUT OF BUSINESS 2O19.BROKERS STEAL US BLIND WITH KNOE REPERCUSSIONS. Garret A.Sudbring

  5. Let’s see…..carriers battle each other to see how much they can under bid each other, then one of them wins their prize, takes the load at such a low rate that they lose money on it, then they blame the broker for taking the losing loads. Rinse and repeat 1000s of times a day. No amount of transparency will save carriers from themselves.

    Folks, you cannot win when you are bidding against carriers who continue to bid themselves right into bankruptcy.

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