On August 19, 2020, the Federal Motor Carrier Safety Administration (FMCSA) published a notice and request for public comments on two separate petitions filed by the Owner-Operators Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC).
These petitions were filed requesting regulatory changes to enforce rate transparency and cut down on what OOIDA and SBTC call price gouging by brokers. Todd Spencer, the OOIDA president, emphasized that “record-keeping and transparency requirements are a central component of broker regulations.”
In May of 2020, the OOIDA sent a petition to Elaine Chao and Jim Mullen, the Transportation Secretary and Federal Motor Carrier Safety Administration acting administrator respectively, demanding stricter transparency regulations with transactions between brokers and owner-operators. The petition proposes the following regulatory changes:
- Require brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed
- Explicitly prohibit brokers from including any provision that requires a carrier to waive their rights to access the transaction records
In March of 2020, the SBTC submitted a petition requesting that the FMCSA:
- Prohibit brokers from coercing or otherwise requiring parties to brokers’ transactions to waive their right to review the record of the transaction as a condition of doing business
- Adopt regulatory language indicating that brokers’ contracts may not include a stipulation or clause exempting the broker from having to comply with the transparency requirement
“With freight rates reaching historic lows, small-business truckers are struggling,” OOIDA President and CEO Todd Spencer states in the letter. “Many have expressed frustration about the lack of transparency between brokers and motor carriers. The problem is that the regulations designed to provide transparency are routinely evaded by brokers or simply not enforced by DOT.” OOIDA also requested that the FMCSA strictly enforce penalties for noncompliant brokers.
“OOIDA has long pushed for greater transparency in transactions with brokers,” the petition states. “With rates on the decline, many truckers are concerned they’re the only ones feeling the pain – or at least feeling a disproportionate share of the pain. This will not change until federal regulators enhance and enforce the broker transparency regulations listed in 49 CFR §371.3. OOIDA strongly encourages FMCSA to promulgate and enforce measures that will prevent brokers from continuing to circumvent these requirements.”
TIA strongly opposes the petitions filed by OOIDA and SBTC. Chris Burrows, the vice president of governmental affairs for TIA, called the SBTC and OOIDA petitions “an attempt to undermine the free market.” He said the petitions were “driven by the COVID-19 pandemic because of a temporary economic downturn that upended the supply chain.” Burrows also indicated that the allegations of systematic issues with brokers evading regulations are unsubstantiated, stating that SBTC and OOIDA’s petitions are “a solution in search of a problem.”
Over 1,200 comments have been submitted to the record on these two petitions. FMCSA’s acting administrator, Wiley Deck, said the comments are “extremely helpful” and encourages drivers, carriers, and brokers to continue to submit comments on the issue. The FMCSA is accepting public comments on the petitions through November 18, which can be submitted through regulations.gov under docket No. FMCSA-2020-0150.
What do you think about the OOIAD and SBTC rate transparency petitions, and TIA’s response to the regulatory requests?
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