By Gallagher Sharp LLPThe Federal Motor Carrier Safety Administration (“FMCSA”) recently issued a Notice of Proposed Rulemaking on November 20, 2024, proposing revisions to regulations governing broker transparency in freight transactions. The aim is to update these regulations by clarifying a broker’s “obligation” to provide transaction records to parties like motor carriers and shippers. The FMCSA believes that this, in turn, “promote[s] efficiency within the motor carrier transportation system.”
The proposed changes to 49 CFR 371.3 include: mandating electronic recordkeeping for better accessibility, requiring brokers to maintain detailed transaction records of payments, fees, and charges, obligating brokers to provide shippers and motor carriers requested records within 48 hours, and updating regulatory text to reflect a broker’s “duty” to comply with these requirements.
The FMCSA’s proposal is the result of significant industry changes since the original rules were promulgated in the 1980s when government focused on deregulating the trucking industry. Today’s brokers offer even greater services than before, and broker relationships are much more complex. Because of these changes, they have prompted debates about the current rule’s relevance and the need for transparency to combat what some consider unfair practices. For instance, brokers today often include contractual language with motor carriers that require motor carriers to waive their ability to review broker records.
The FMCSA’s call for public input focuses on several key areas, such as the impact on freight rates, the burden of electronic recordkeeping, and the proposed 48-hour timeframe for record disclosure. If adopted, these rules could notably impact broker relationships, so industry leaders and participants are encouraged to share their perspectives to shape the final rule.