The Federal Motor Carrier Safety Administration (FMCSA) is going to uphold its final rule concerning broker and freight forwarder financial responsibility, maintaining regulations introduced last November.
This rule includes provisions such as the suspension of operating authority if financial security drops below $75,000. While the Owner-Operator Independent Drivers Association (OOIDA) views this rule as a positive step, it advocates for further measures to ensure fairness in the broker-carrier relationship.
OOIDA submitted a petition for reconsideration in December to enhance the rule’s effectiveness. Despite OOIDA’s requests, FMCSA has informed the association that it will continue to enforce the finalized rule, which came into effect in January. The agency justified its decision by stating that OOIDA’s proposals were beyond the scope of this specific rule, though it acknowledged ongoing efforts to address broker-related issues.
FMCSA’s final rule aims to streamline broker and freight forwarder financial responsibility by:
- Limiting acceptable asset types in trusts
- Establishing procedures for immediate operating authority suspension if financial security falls short
- Defining financial failure or insolvency criteria
It also introduces civil penalties for surety and trust fund violations and outlines a process for their suspension in cases of non-compliance.
In its petition, OOIDA urged for the inclusion of broker knowledge and experience provisions, an annual report on broker fraud, a seven-day claims investigation period, and public disclosure of broker financial insolvency.
“We believe various modifications can improve the economic health of the broker/motor carrier component of the transportation industry,” OOIDA wrote. “Additionally, small-business motor carriers who rely upon brokers will be spared financial loss from both brokers and ineffective bonds or trusts under these suggested amendments. This will result in safe, experienced motor carriers staying in business along with a more transparent process for both industry stakeholders and general consumers.”
The FMCSA did reject most of these requests.
“Thus, the agency will not be making any changes to the rule based on these requests,” FMCSA wrote. “Regarding your request to implement a seven-day claims investigation period, FMCSA believes a full and fair investigation of each claim is necessary. While many investigations take seven days or less, there may be instances in which a surety provider requires additional time. Thus, the agency decided not to place a time limitation on the claims investigation process and declines to reconsider this provision.”
However, it seems to be addressing these concerns in other ways. FMCSA has indicated a willingness to consider displaying broker financial insolvency information on its Safety and Fitness Electronic Records (SAFER) page, although it believes such action should not be mandated.
Additionally, the agency has granted petitions from both OOIDA and the Transportation Intermediaries Association (TIA) to address broker-related issues. TIA’s petition, submitted in June last year, dealt with implementing and enforcing existing experience and training requirements for brokers and freight forwarders. While FMCSA granted this petition, the rulemaking process hasn’t started. Similarly, OOIDA’s petition, aimed at enhancing broker transparency, is expected to initiate the rulemaking process in the coming fall, following FMCSA’s delay in action since the association’s petition in 2020.
Source: Land Line
