Transportation Intermediaries Association Petition for Rulemaking Concerning Property Broker Transaction Records and Regulatory Guidance Concerning Dispatch Services |
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James W. Deck
Federal Motor Carrier Safety Administration
25 November 2020
[Federal Register Volume 85, Number 228 (Wednesday, November 25, 2020)]
[Proposed Rules]
[Pages 75280-75282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25307]
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DEPARTMENT OF TRANSPORTATION
Federal Motor Carrier Safety Administration
49 CFR Chapter III
[Docket No. FMCSA-2020-0194]
Transportation Intermediaries Association Petition for Rulemaking
Concerning Property Broker Transaction Records and Regulatory Guidance
Concerning Dispatch Services
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Petition for rulemaking; request for public comments.
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SUMMARY: FMCSA requests public comments on the Transportation
Intermediaries Association (TIA) petition for rulemaking concerning the
rights of parties to a brokered transaction to review the records of
the transaction and its request that the Agency issue regulatory
guidance concerning dispatch services. TIA believes transparency in
broker transactions is provided through other means in today's market
place and that the regulatory guidance would ensure that interested
parties can distinguish between a dispatch service and an authorized
broker.
DATES: Comments must be submitted by January 25, 2021.
ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2020-0194 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 ``Public Participation and Request for 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
document (Docket No. FMCSA-2020-0194), indicate the specific section of
this document to which each comment
[[Page 75281]]
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-2020-0194, in 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 document. 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 document.
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-2020-0194 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. Petition for Rulemaking
TIA requested that FMCSA rescind 49 CFR 371.3(c) concerning the
rights of parties to a brokered transaction to review the records of
the transaction. TIA wrote, ``The Interstate Commerce Commission's
(ICC) commentary in the Federal Register notice published on May 12,
1980 offers an interesting perspective on the purpose of the broker
transaction (emphasis added):
The amount of the broker's fee is not regulated by the
Commission. This means that a broker must engage in a bargaining
process with its principals. The amount of commission that a
principal agrees to pay will vary according to the benefits it
perceives it will gain from the transaction. No party is obligated
to deal with a broker or pays its commissions. A party may either
choose to do without the brokers' services or to look for another
broker who will offer the service at a lower price. In this regard,
we note that the property broker industry is a highly competitive
one. Our goal in regulating transactions between brokers, carriers,
and shippers is to remove all unnecessary restrictions which might
impede the free operation of the marketplace.''
TIA argues that 49 CFR 371.3(c) is in direct conflict with the
original intent of the ICC to ensure that ``all unnecessary
restrictions which might impede the free operation of the marketplace''
are removed. TIA stated, ``In today's marketplace brokers are not
commissioned sales agents of motor carriers. As noted above brokers pay
motor carriers regardless of the rate that the shipper pays the broker.
The need to verify commissions no longer exists.''
TIA asserts that motor carrier transportation on the spot market is
one of the most transparent market places in the world. Load boards,
the internet, and rate quotes in person-to-person communications within
the industry provide the rate transparency that was intended by 49 CFR
371.3 when commissions paid by carriers to brokers were common. Motor
carriers have sufficient access to current market rates without
inspecting brokers' shipment records to find out what the brokers'
gross margins are on a load-by-load basis.
C. TIA Request for Regulatory Guidance Concerning Dispatch Services
TIA believes that some ``dispatch services'' are essentially
unlicensed brokers that handle financial
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transactions for freight transportation services but do not meet the
statutory licensing or financial security requirements applicable to
brokers registered with FMCSA. TIA describes dispatch services as
entities that provide a service on behalf of a motor carrier, where
they assist on booking loads and other services.
TIA believes the Agency should publish regulatory guidance
explaining that the legal duties of a dispatch service allow them to be
an agent for one motor carrier, and that anything further requires a
brokerage license and compliance with the financial responsibility
requirements applicable to brokers. TIA believes this is especially
necessary when the dispatch service is handling payment from the
shipper and then making payment to the motor carrier. According to TIA,
this guidance would ultimately enable private legal action to be taken
for violations, which would allow the public and the Agency both to
enforce the provisions of this regulation. A copy of TIA's letter
petitioning the Agency to initiate rulemaking and to issue regulatory
guidance is included in the docket for this document.
D. 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 comment on TIA's petition for rulemaking to rescind 49
CFR 371.3 and the association's request that the Agency issue
regulatory guidance concerning ``dispatch services.'' Commenters are
encouraged to provide responses to the following questions:
1. To what extent would brokers' disclosure of the records of
individual transactions to individual motor carriers under 49 CFR
371.3(c) place brokers and their shipper clients at risk of having
proprietary information concerning freight descriptions, transportation
rates and routes disclosed to their competitors?
2. For authorized brokers, how often do motor carriers exercise
their right under 49 CFR 371.3(c) to review the record of the
transaction, and are there motor carriers who make requests on such a
frequent basis that they could, if working with other motor carriers,
learn certain proprietary information concerning shippers' rates and
routes?
3. In the absence of 49 CFR 371.3(c), what information concerning
brokered transactions would authorized brokers share with the shippers
and for-hire carriers?
4. To what extent do shippers engage in discussions with brokers
about the rates the authorized motor carriers will be paid?
5. How often do shippers enter into negotiations about interstate
transportation services with an entity that is neither an interstate
motor carrier registered with FMCSA nor a broker registered with FMCSA?
6. Would the issuance of regulatory guidance concerning ``dispatch
services'' provide an effective deterrent to unauthorized brokerage
services, or would additional actions by FMCSA be required to address
the challenges described by TIA?
7. Is there sufficient clarity in the current definitions of
``broker,'' ``bona fide agents,'' and ``brokerage or brokerage
service'' under 49 CFR 371.2 to enable interested parties to identify
dispatch services that are actually carrying out the functions of a
registered broker and to file a complaint with FMCSA for subsequent
investigation?
Issued under authority delegated in 49 CFR 1.87.
James W. Deck,
Deputy Administrator.
[FR Doc. 2020-25307 Filed 11-24-20; 8:45 am]
BILLING CODE 4910-EX-P