Friday, June 10, 2022 Trucking News and Briefs:
FMCSA seeks public input on definition of “broker”, “bona fide agents”
In a Federal Register notice released Friday, the Federal Motor Carrier Safety Administration is asking for answers to a number of questions to help provide future guidance on the definitions of “broker” and “bona fide agent.” The Biden administration’s Infrastructure Investment and Jobs Act (IIJA) requires the FMCSA to issue guidance on the subject by Nov. 15.
The FMCSA said it has received numerous inquiries and petitions over the past decade regarding the definition of a broker, and the agency has acknowledged “that there is significant stakeholder interest in applying the brokerage not authorized by the FMCSA”.
[Related: ‘You just lose’ when middlemen don’t pay: Broker reform eight years in the waiting]
The IIJA requires that, when issuing guidance, the FMCSA consider the extent to which technology has changed the nature of freight brokerage, the role of bona fide agents, and other aspects of the shipping industry. trucking. Additionally, the FMCSA said it needs to, at a minimum, review the role of dispatch services, consider the extent to which dispatch services could be considered bona fide brokers or agents, and clarify the level of penalties. fees for unauthorized brokerage activities applicable to a dispatch service. .
Currently, “broker” is defined in 49 USC 13102(2) as a “person, other than a motor carrier or an employee or agent of a motor carrier, who, as principal or agent, sells, offers to the sale, negotiates or presents itself by solicitation, advertising or otherwise as selling, providing or arranging transport by motor carriers for remuneration”. In 49 CFR 371.2(a), broker is also defined as a “person who, for compensation, arranges or offers to arrange for the transportation of goods by a licensed motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this article when they arrange or offer to arrange for the carriage of shipments which they are authorized to to transport and which they have accepted and legally undertake to transport.”
Next, “bona fide agents” are defined as “persons who are part of the normal organization of a motor carrier and perform functions under the direction of the carrier pursuant to a pre-existing agreement which provides for an ongoing relationship, excluding the the exercise of discretion by the agent in the distribution of traffic between the carrier and others.
Dispatch services, often acting as agents for different motor carriers at the same time, are not directly defined in the regulations.
[Related: Time to account for independent dispatch services in regulation?]
FMCSA is seeking public input on the following 13 questions. The agency wants commenters to identify the question they are answering in each section of their comments:
- What evaluation criteria should the FMCSA use to determine if a business model/entity meets the definition of a broker?
- Provide examples of transactions that meet the definition of broker in 49 CFR 371.2 and examples of transactions that do not meet the definition in 49 CFR 371.2.
- What role should possession of the money exchanged between shippers and motor carriers in a brokerage transaction play in determining whether or not to broker?
- How would you define the term shipping service? Is there a commonly accepted definition? What role do dispatch services play in the transportation industry?
- To your knowledge, do dispatch services need to obtain a business license/employer identification number from the state in which they primarily conduct business?
- Some dispatch services cite 49 CFR 371.2(b) [that is, the definition of bona fide agents included above] as the reason why they do not obtain registration with the FMCSA brokerage authority in order to conduct their operations. … Some dispatch services interpret this regulation as allowing them to represent more than one carrier without obtaining registration from a broker operating authority. Others interpret this regulation as arguing that a dispatch service can only represent one carrier without obtaining authorization from a broker. What should the FMCSA consider when determining whether a dispatch service should obtain a broker’s license to operate?
- If a dispatch service represents more than one carrier, does that in itself make it an unauthorized broker?
- When should a dispatch service be considered a bona fide agent?
- What role do bona fide agents play in the transportation of goods?
- Message boards match shippers and carriers for a fee. The fee is a membership fee for accessing bulletin board information. Should message boards be considered brokers and required to register with the FMCSA to obtain a broker’s license to operate? If yes, when and why?
- How has technology changed the nature of freight brokerage and how should these changes be reflected, if at all, in FMCSA guidelines?
- Are there other business models/services, other than dispatch services and message boards, that should be considered when clarifying the definition of broker?
- Are there other aspects of the freight transportation industry that the FMCSA should consider when issuing guidelines for the definitions of bona fide broker and agent?
Comments can be made here until July 11.
The inclusion of a requirement for FMCSA to study this issue in the infrastructure bill last year followed the Transportation Intermediaries Association brokerage group’s 2020 petition to FMCSA that called on the agency to specifically require brokering authorities for any independent dispatch service working with more than one carrier. Hear the view on this request and more in this December 2020 edition of Radio Overdrive:
New dealership for Autocar yard-spotters
Kriete Truck Centers has announced that it is now an authorized dealer of Autocar-branded terminal tractors. Family-owned and operated for more than 70 years, the Wisconsin-based Kriete Truck Centers network operates in ten locations across the state with heavy-duty and medium-duty truck sales, service, parts and lease-to-rent support. for Hino, Mack and Volvo. trucks. The company also offers a variety of trailer, body and loader options from brands such as Barko, Cross Country, Great Lakes, Kesla, Palfinger and Serco, and is an Allison and Cummins certified service provider.
Autocar entered the terminal tractor, or “yard-spotter” business over a decade ago, and today, with products powered by Cummins engines and Allison transmissions, its yard-spotter trucks are well represented. in trucking as purpose-built, custom-engineered tractors with factory-direct support.