Largest Freight Broker Group Pushes Back Against New Proposals to Increase Transparency
Washington D.C. – The largest association representing third party logistics (3PL) companies is pushing back against two new proposals which would require more transparency in transactions.
On Wednesday, the Federal Motor Carrier Safety (FMCSA) published into the Federal Register recently filed petitions by the Owner Operator Independent Driver’s Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) calling for new measures to ensure small business truckers have access to each transaction record.
The petitions stem from concerns that freight brokers are not complying with, or are circumventing 49 CFR 371.3 which requires brokers to provide a copy of the transaction record to carriers, at the carriers request, upon delivery of the load.
Reform measures called for in the petitions include: requiring brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed, and disallowing brokers from including any stipulation in its contracts which exempt them from having to comply with 49 CFR 371.3.
Click HERE to read more details in the petitions.
In response, Chris Burroughs, vice president of government affairs with the Transportation Intermediaries Association (TIA), said the proposed reform measures are unnecessary.
“The reality is the market will continue to ebb and flow through supply and demand, and we do not need government regulation and further transparency with shippers and brokers proprietary information in an already extremely transparent marketplace,” Burroughs argued in an exclusive statement to Transportation Nation Network (TNN).
Issues surrounding broker transparency came under intense scrutiny earlier this year during the height of the COVID-19 recession.
As spot market freight rates plummeted, small business truckers felt the squeeze leading to an historic three-week protest in Washington D.C. back in May.
At the time, then-CEO of TIA, Robert Voltmann, went on the record with TNN in an unforgettable and explosive two-part interview.
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Voltmann asserted the depressed rate environment was a “supply and demand” issue and would likely soon shift.
Burroughs says TIA members are now experiencing that shift and it is costing them.
“We stand firm that the downturn in the truck rates was a marketplace condition because of COVID-19 and the marketplace is completely flipped 180 since then, with truck rates through the roof and our members losing money on many loads,” Burroughs told TNN.
Further, in Part II of TNN’s interview with Voltmann, he warned if brokers are forced to comply with the transparency rule, it will be devastating to small business truckers.
“Most shipper contracts today have strict confidentiality rules in them. So, the reason the broker asks the carrier to waive that is because if they don’t waive that right they can’t move that shipper’s freight,” he explained. “If Congress were to come in and say 371 is now mandatory, shippers will stop using brokers. That means all those owner operators are going to have to field their own salesforce. We’ll go out of business. If the brokerage part of the industry disappears, so will the owner operators.”
Shortly following the interview series, Mr. Voltmann stepped down from his position with TIA.
As for the petitions, the public has 60 days from Wednesday to file comments and responses to eight questions posed by the Agency.
Burroughs said TIA will file a public comment to the docket in the coming days.
To comment, simply visit www.regulations.gov and reference Docket No. FMCSA-2020-0150.
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