The Owner-Operator Independent Drivers Association (OOIDA) has requested a new rule requiring brokers to share pricing documents with truckers. Federal trucking regulators have confirmed that they will consider this proposal, which aims to increase transparency in the industry.
The Federal Motor Carrier Safety Administration (FMCSA) announced in a recent post that they will address OOIDA’s transparency petition at an appropriate time. If approved, brokers would be required to provide an electronic copy of each transaction record to truckers within 48 hours of the completion of service.
Transportation Intermediaries Association (TIA) opposes OOIDA’s petition, claiming that these documents should remain private. The battle between OOIDA and TIA underscores the importance of transparency in the trucking industry, and the decision by FMCSA will ultimately shape the future of broker-trucker relationships.
“OOIDA has long fought to protect our members’ rights to access contractual documents guaranteed to them under federal regulations,” OOIDA CEO Todd Spencer wrote in a Sept. 22 follow-up letter to FMCSA Administrator Robin Hutcheson. “Not only does access to these documents protect carriers from unscrupulous brokers, it helps to protect the public by providing a marketplace in which each party behaves in a clear and transparent manner.”
“It has been over two years since OOIDA submitted its original petition, 20 months since the most recent comment period ended for broker transparency-related dockets, and nearly 1,500 comments have been filed on the dockets listed above,” the letter said. “For that reason, we believe an update is warranted on where the agency stands on our outstanding petition and related comments from motor carriers.”
During an interview, Spencer expressed his hope that the agency will promptly take action on OOIDA’s petition. He believes that if the agency introduces a regulation that promotes transparency, it has the potential to reduce costs for consumers.
“From the perspective of people who operate trucks, we assume that they [brokers] don’t want to disclose information because the position they have right now is advantageous to them,” Spencer said. “Obviously, if you’re the carrier that moved the goods then you’re a party that’s entitled to see the information. Who knows what they’re hiding.”
TIA President Anne Reinke has a different perspective. She believes that OOIDA is trying to gain access to the pricing details between shippers and brokers in order to negotiate their own rates; however, she emphasized that the pricing information shared between brokers and shippers is confidential.
“They’re using a regulatory method to use leverage to negotiate,” Reinke said. “That doesn’t sit well with us. It’s not clear to me what they think we’re protecting. There is some indication that FMCSA is going to act on the OOIDA petition, but they have not predisposed to act a certain way.”
Reinke added that during the COVID-19 epidemic, shipping prices went “to the basement, and brokers were blamed for driving prices down, and making money off the pandemic.”
“Nothing could be further from the truth,” she added. Since then, carrier rates have “gone through the roof,” because people have been ordering things “out the ying-yang.”
TIA actively opposes OOIDA’s request to eliminate a regulation that they believe is outdated in today’s brokerage market. The regulation in question, 49 CFR 371.3, has been in place since 1980 and no longer aligns with the current state of the industry. TIA Vice President of Government Affairs, Chris Burroughs, emphasizes that this law was established during a significantly different time in the brokerage business.
“Motor carriers paid brokers a commission, and there was concern from the [Interstate Commerce Commission] of rebating and double-dipping in profits when brokers and shippers shared common ownership,” said Burroughs. “The marketplace does not operate like that today. It is drastically different, with two separate business transactions between the broker-shipper and the broker-carrier.”
Source: Transport Topics
