Owner-Operator Independent Drivers Association, Small Business in Transportation Coalition Petitions for Rulemaking; Transparency in Property Broker Transactions |
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Topics: Owner-Operator Independent Drivers Association
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Heather Eilers-Bowser
Federal Motor Carrier Safety Administration
19 August 2020
[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Notices]
[Pages 51145-51147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18130]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
[Docket No. FMCSA-2020-0150]
Owner-Operator Independent Drivers Association, Small Business in
Transportation Coalition Petitions for Rulemaking; Transparency in
Property Broker Transactions
AGENCY: Federal Motor Carrier Safety Administration (FMCSA),
Transportation (DOT).
ACTION: Notice; request for public comments.
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SUMMARY: FMCSA requests public comments on petitions for rulemaking to
amend certain requirements for property brokers submitted by the Owner-
Operator Independent Drivers Association (OOIDA) and the Small Business
in Transportation Coalition (SBTC). OOIDA requests that FMCSA require
property brokers to provide an electronic copy of each transaction
record automatically within 48 hours after the contractual service has
been completed, and prohibit explicitly brokers from including any
provision in their contracts that requires a motor carrier to waive its
rights to access the transaction records. SBTC requests that 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 for doing business. SBTC also requests that
FMCSA 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.
DATES: Comments must be submitted by October 19, 2020.
ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2020-0150 using any of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
Mail: Docket Operations, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor,
Room W12-140, Washington, DC 20590-0001.
Hand Delivery or Courier: Docket Operations, West
Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue, SE,
Washington, DC 20590, between 9 a.m. and 5 p.m. ET, Monday through
Friday, except Federal holidays. To be sure someone is there to help
you, please call (202) 366-9317 or (202) 366-9826 before visiting
Docket Operations.
Fax: (202) 493-2251.
To avoid duplication, please use only one of these four methods.
See the ``Submitting Comments'' portion of the SUPPLEMENTARY
INFORMATION section for instructions on submitting comments.
FOR FURTHER INFORMATION CONTACT: Ms. La Tonya Mimms, Chief, Driver and
Carrier Operations, Federal Motor Carrier Safety Administration, 1200
New Jersey Avenue SE, Washington, DC 20590-0001, by telephone at (202)
366-4001, or by email at MCPSD@dot.gov. If you have questions on
viewing or submitting material to the docket, contact Docket Services,
(202) 366-9826.
SUPPLEMENTARY INFORMATION:
A. Submitting Comments
If you submit a comment, please include the docket number for this
notice (Docket No. FMCSA-2020-0150), indicate the specific section of
this document to which each comment applies, and provide a reason for
each suggestion or recommendation. You may submit your comments and
material online or by fax, mail, or hand delivery, but please use only
one of these means. FMCSA recommends that you include your name and a
mailing address, an email address, or a telephone number in the body of
your document so that FMCSA can contact you if there are questions
regarding your submission.
To submit your comment online, go to http://www.regulations.gov,
put the docket number, FMCSA-2020-0150, in
[[Page 51146]]
the keyword box, and click ``Search.'' When the new screen appears,
click on the ``Comment Now!'' button and type your comment into the
text box on the following screen. Choose whether you are submitting
your comment as an individual or on behalf of a third party and then
submit.
If you submit your comments by mail or hand delivery, submit them
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. If you submit comments by mail and would
like to know that they reached the facility, please enclose a stamped,
self-addressed postcard or envelope.
FMCSA will consider all comments and material received during the
comment period.
Confidential Business Information
Confidential Business Information (CBI) is commercial or financial
information that is both customarily and actually treated as private by
its owner. Under the Freedom of Information Act (FOIA, 5 U.S.C. 552),
CBI is exempt from public disclosure. If your comments responsive to
the notice contain commercial or financial information that is
customarily treated as private, that you actually treat as private, and
that is relevant or responsive to the notice, it is important that you
clearly designate the submitted comments as CBI. Please mark each page
of your submission that constitutes CBI as ``PROPIN'' to indicate it
contains proprietary information. FMCSA will treat such marked
submissions as confidential under the FOIA, and they will not be placed
in the public docket for this notice. Submissions containing CBI should
be sent to Mr. Brian Dahlin, Chief, Regulatory Analysis Division,
Federal Motor Carrier Safety Administration, 1200 New Jersey Avenue SE,
Washington DC 20590. Any comments FMCSA receives which are not
specifically designated as CBI will be placed in the public docket for
this notice.
B. Viewing Comments and Documents
To view comments, as well as any documents mentioned in this
preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2020-0150 in the
keyword box, and click ``Search.'' Next, click the ``Open Docket
Folder'' button and choose the document to review. If you do not have
access to the internet, you may view the docket online by visiting
Docket Operations in Room W12-140 on the ground floor of the DOT West
Building, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, between
9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays.
To be sure someone is there to help you, please call (202) 366-9317 or
(202) 366-9826 before visiting Docket Operations.
C. Privacy Act
In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.transportation.gov/privacy.
I. Background
A. Brokers' Records of Transactions; History of Current Requirements
Section 371.3(c) of title 49 of the CFR states that ``[e]ach party
to a brokered transaction has the right to review the record of the
transaction required to be kept by these rules.'' The current
requirements under 49 CFR 371.3(c) were adopted by the Interstate
Commerce Commission (ICC) on October 17, 1980 (45 FR 68941), at 49 CFR
1045.3(c). Prior to 1980, the broker records requirements under 49 CFR
1045.3 did not include a specific provision concerning the rights of
parties to a brokered transaction to review the record of the
transaction. In its May 12, 1980 (45 FR 31140) notice of proposed
rulemaking concerning multiple broker regulations, the ICC explained
that the proposed change to section 1045(c) would allow the agency to
``. . . eliminate more complex rules found at sections 1045.5, 1045.6,
and 1045.10.'' Those requirements related to charges for brokerage
services, charges for non-brokerage services, and duties and
obligations of brokers, respectively.
With the termination of the ICC in 1995, the regulatory oversight
of brokers was transferred to the Federal Highway Administration (FHWA)
and the requirements under 49 CFR 1045.3 were redesignated, without
change, under 49 CFR 371.3 (61 FR 54707; October 21, 1996).
Subsequently, with the establishment of FMCSA in 2000, all motor
carrier oversight responsibilities and regulations were transferred
from FHWA to FMCSA.
B. OOIDA Petition for Rulemaking
OOIDA requested that FMCSA amend 49 CFR 371.3 to require brokers to
provide an electronic copy of each transaction record automatically
within 48 hours after the contractual service has been completed. OOIDA
also requested that the Agency explicitly prohibit brokers from
including any provision in their contracts that requires a carrier to
waive their rights to access the transaction records required by
section 371.3.
OOIDA explained that with freight rates reaching historic lows,
small motor carriers of property are struggling financially. Motor
carriers have expressed frustration about the lack of transparency
between brokers and motor carriers. OOIDA believes the problem is that
the regulations designed to provide transparency are routinely evaded
by brokers or simply not enforced by FMCSA. While the current rules
require brokers to keep transaction records and permit each party to a
brokered transaction to review the records, many brokers implement
hurdles they know will prevent a carrier from ever seeing this
information. For example, some brokers allow a motor carrier to access
records only at the broker's office during normal business hours, and
OOIDA argues this makes it virtually impossible for motor carriers to
access the records. Given that many business transactions now take
place electronically, OOIDA believes that the rules need to be updated
to improve transparency and prevent brokers from keeping their
transaction records from motor carriers that are not located near the
broker. The updated rules would also prevent brokers from retaliating
against carriers that request the transaction information. A copy of
the OOIDA petition is included in the docket for this notice.
C. SBTC Petition for Rulemaking
The SBTC requested that FMCSA amend 49 CFR 371.3 to prohibit
brokers from coercing or otherwise requiring parties to a transaction
to waive their right to review the record of the transaction as a
condition of doing business. The requested language would also state
that ``No stipulation or clause in any contract shall exempt any broker
from having to comply with this rule, upon demand, by a party to the
transaction.''
SBTC explained that freight rates have dropped drastically and that
motor carriers have reported instances of brokers engaging in
``profiteering, price gouging and low-balling tactics.'' SBTC claims
that in some instances, brokers are receiving commissions of up to 65
percent on loads due to a sudden shortage of freight and over-capacity
in the transportation market. SBTC stated that, to evade regulations,
some brokers have resorted to requiring carriers, as parties to broker
transactions, to waive their rights to obtain documents that
[[Page 51147]]
show the amount the shipper is paying the broker. SBTC further states
that the provisions in 49 CFR 371.3 should be strengthened to stop this
abuse, noting:
While the SBTC does not seek to return to economic regulation to
limit the amounts or percentages brokers earn and believe this
should be left to the free market--much like we wouldn't want
carriers' revenue to suddenly be limited, transparency is essential
in making sure market forces operate ethically and fairly. We
believe FMCSA should enforce its rule and act to terminate this
abuse by big brokers in the marketplace.
A copy of SBTC's petition is included in the docket for this
notice.
II. Request for Public Comments
Petitions for rulemaking are governed by DOT regulations codified
at 49 CFR 5.13 and FMCSA regulations at 49 CFR 389.31 and 389.33. While
these regulations do not require FMCSA to publish a notice in the
Federal Register seeking public comments, FMCSA believes that taking
this action would provide a means of engaging stakeholders in the
process for assessing the need for a rulemaking. FMCSA therefore
requests public comments on OOIDA's and SBTC's petitions for
rulemaking. The Agency seeks public feedback concerning its statutory
authority to require that brokers disclose certain financial details
about transactions to motor carriers, and further seeks comments on
whether a regulatory action would provide an effective solution to the
problem described. Commenters are encouraged to provide responses to
the following questions:
1. FMCSA has authority under 49 U.S.C. 14122(a) to require the form
of records to be prepared or compiled by carriers and brokers, the
Agency's right of inspection under 49 U.S.C. 14122(b), its authority to
prescribe time periods for preservation of records under 49 U.S.C.
14122(c), and its authority to require annual financial reports from
motor carriers, freight forwarders and brokers. FMCSA also has
discretionary authority to prescribe regulations to carry out the
provisions of 49 U.S.C. 13101-14916 that govern the commercial aspects
of motor carrier and broker transportation. 49 U.S.C. 13301(a). Section
13301(a) is the statutory successor to former 49 U.S.C. 10321, which
the ICC relied on in 1980 in prescribing the regulations later
redesignated as part 371. In light of the significant statutory changes
reducing the scope of regulatory authority over commercial
transportation that have occurred since 1980, what statutory
provisions, if any, would be carried out by the regulatory changes
requested by the petitioners? In particular, how would a rule
restricting the rights of private parties from including certain terms
in their agreements align with the Agency's statutory authority?
2. How would a rulemaking expanding FMCSA's role in enforcement of
the requirement mandating that brokers automatically disclose financial
details about each transaction to the respective motor carrier
transporting the load, as requested in the OOIDA and SBTC petitions,
align with the statutes identified above? What measures could FMCSA
take to ensure that regulatory action in this area is an appropriate
exercise of the Agency's authority?
3. Are the transparency issues raised by OOIDA and SBTC limited to
small brokers or large brokers (e.g., brokers with revenues above a
certain threshold, brokers with a certain number of transactions, etc.)
or are they more widespread such that the rulemaking should cover all
brokers, regardless of size?
4. If the transparency issues are primarily associated with large
brokers, what revenue threshold should the FMCSA consider for the
applicability of any new requirements, and how would the Agency obtain
accurate information about brokers' revenues?
5. The OOIDA petition requested that brokers provide information to
motor carriers automatically and electronically. The Agency requests
commenters to provide their views on the most efficient and effective
means of accomplishing this request. Should each broker have, for
example, a stand-alone system with motor carriers receiving an email
from the broker after the contractual service has been completed, or
should brokers be allowed to satisfy the request with partnerships or
networks through which registered brokers would upload transaction
information which would then be automatically transmitted via the
network to the registered carrier associated with the transaction?
6. The OOIDA petition request that FMCSA require brokers to provide
transaction information automatically within 48 hours of the completion
of the contractual services would likely require information technology
(IT) resources that are currently not in use. FMCSA requests that
commenters provide cost estimates for implementing an IT solution to
accomplish OOIDA's request, either through stand-alone systems run by
individual brokers, or systems operated by groups of brokers notifying
the individual carriers utilizing any of the brokers within the group.
7. Please provide a quantitative estimate of the economic benefits
that would likely be achieved by motor carriers if FMCSA adopted the
rules OOIDA and SBTC requests. How much additional revenue might motor
carriers receive on a per-transaction basis?
8. Please provide a quantitative estimate of the economic costs to
brokers or others if FMCSA adopted the rules OOIDA and SBTC request.
How much profit reduction on a per-transaction basis would brokers
experience, and what percentage of the costs would be passed through to
shippers or motor carriers?
Issued under authority delegated in 49 CFR 1.87.
Heather Eilers-Bowser,
Chief Counsel.
[FR Doc. 2020-18130 Filed 8-18-20; 8:45 am]
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