91648 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 

(i)(A) Provided for profit, i.e., with the 

intent of receiving compensation or 

monetary gain; 

(B) An interconnected service; and 

(C) Available to the public, or to such 

classes of eligible users as to be 

effectively available to a substantial 

portion of the public; or 

(ii) The functional equivalent of such 

a mobile service described in paragraph 

(i)(A) of this definition. 

(iii) A variety of factors may be 

evaluated to make a determination 

whether the mobile service in question 

is the functional equivalent of a 

commercial mobile radio service, 

including: Consumer demand for the 

service to determine whether the service 

is closely substitutable for a commercial 

mobile radio service; whether changes 

in price for the service under 

examination, or for the comparable 

commercial mobile radio service, would 

prompt customers to change from one 

service to the other; and market research 

information identifying the targeted 

market for the service under review. 

(iv) Unlicensed radio frequency 

devices under part 15 of this chapter are 

excluded from this definition of 

Commercial mobile radio service. 

* * * * * 

Georouting data means location data 

generated from cell-based location 

technology that is aggregated to a level 

that will not identify the location of the 

cell site or base station receiving the 988 

call or text or otherwise identify the 

precise location of the handset. 

Lifeline Administrator is the entity 

that controls the 988 call routing 

platform pursuant to contract with the 

Substance Abuse Mental Health 

Services Administration. 

* * * * * 

(d) Georouting. By [DATE SIX 

MONTHS AFTER DATE OF 

PUBLICATION OF THE FINAL RULE], 

all covered text providers must: 

(1) Have the capability to provide 

georouting data with covered 988 text 

messages to the Lifeline Administrator 

in a format that is compatible with the 

Lifeline’s routing platform, to allow 

routing of the covered 988 text message 

by the Lifeline Administrator to the 

appropriate crisis center based on the 

geographic area where the handset is 

located at the time the covered 988 text 

is initiated. 

(2) Provide georouting data, when 

available, with covered 988 text 

messages to the Lifeline Administrator 

sufficient to allow routing of the 

covered 988 text message by the Lifeline 

Administrator to the appropriate crisis 

center based on the geographic area 

where the handset is located at the time 

the covered 988 text is initiated. 

[FR Doc. 2024–26795 Filed 11–19–24; 8:45 am] 

BILLING CODE 6712–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Motor Carrier Safety 

Administration 

49 CFR Part 371 

[Docket No. FMCSA–2023–0257] 

RIN 2126–AC63 

Transparency in Property Broker 

Transactions 

AGENCY: Federal Motor Carrier Safety 

Administration (FMCSA), Department 

of Transportation (DOT). 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: FMCSA proposes 

amendments to its property broker rules 

in response to petitions for rulemaking 

from the Owner-Operator Independent 

Drivers Association (OOIDA) and the 

Small Business in Transportation 

Coalition (SBTC). Under current 

regulations, the parties to a brokered 

freight transaction have a right to review 

the broker’s record of the transaction, 

which stakeholders often refer to as 

‘‘broker transparency.’’ Contracts 

between brokers and motor carriers 

frequently contain waivers of this right. 

OOIDA requested that FMCSA 

promulgate a requirement that property 

brokers provide an electronic copy of 

each transaction record automatically 

within 48 hours after the contractual 

service has been completed, and 

explicitly prohibit brokers from 

including any provision in their 

contracts that requires a motor carrier to 

waive its rights to access the transaction 

records. SBTC requested that FMCSA 

prohibit brokers of property from 

coercing or requiring parties to brokers’ 

transactions to waive their right to 

review the record of the transaction as 

a condition for doing business and 

prohibit the use of clause(s) exempting 

the broker from having to comply with 

this transparency requirement. Though 

the proposed rule is responsive to the 

petitions in reinforcing the broker 

transparency requirement, the proposed 

provisions differ from those requested 

by OOIDA and SBTC. The proposed rule 

would revise the regulatory text to make 

clear that brokers have a regulatory 

obligation to provide transaction records 

to the transacting parties on request. 

The proposal would also make changes 

to the format and content of the records. 

DATES: Comments must be received on 

or before January 21, 2025. 

ADDRESSES: You may submit comments 

identified by Docket Number FMCSA– 

2023–0257 using any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

https://www.regulations.gov/docket/ 

FMCSA-2023-0257/document. Follow 

the online instructions for submitting 

comments. 

• Mail: Dockets Operations, U.S. 

Department of Transportation, 1200 

New Jersey Avenue SE, West Building, 

Ground Floor, Washington, DC 20590– 

0001. 

• Hand Delivery or Courier: Dockets 

Operations, U.S. Department of 

Transportation, 1200 New Jersey 

Avenue SE, West Building, Ground 

Floor, Washington, DC 20590–0001, 

between 9 a.m. and 5 p.m., 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 Dockets Operations. 

• Fax: (202) 493–2251. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Michael Evans, Transportation 

Specialist, Commercial Enforcement 

Division, Office of Safety, FMCSA, 1200 

New Jersey Avenue SE, Washington, DC 

20590–0001; (202) 568–0530; 

michael.evans@dot.gov. If you have 

questions on viewing or submitting 

material to the docket, call Dockets 

Operations at (202) 366–9826. 

SUPPLEMENTARY INFORMATION: FMCSA 

organizes this NPRM as follows: 

I. Public Participation and Request for 

Comments 

A. Submitting Comments 

B. Viewing Comments and Documents 

C. Privacy 

D. Comments on the Information 

Collection 

II. Executive Summary 

A. Purpose and Summary of the Regulatory 

Action 

B. Summary of Major Provisions 

C. Costs and Benefits 

III. Abbreviations 

IV. Legal Basis 

V. Background 

A. History of Property Broker Regulations 

B. History of the Current Rulemaking 

C. Related Actions 

VI. Discussion of Proposed Rulemaking and 

Comments 

A. Proposed Rulemaking 

B. Comments and Agency Responses 

C. Issues on Which the Agency Seeks 

Further Comment 

VII. Section-by-Section Analysis 

A. Section 371.2 Definitions. 

B. Section 371.3 Records To Be Kept by 

Brokers 

VIII. Regulatory Analyses 

A. E.O. 12866 (Regulatory Planning and 

Review), E.O. 13563 (Improving 

Regulation and Regulatory Review), E.O. 


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1Asymmetric information exists when one party 

in a transaction has more information than the 

other, which can result in a market failure. 

Asymmetric information provides an advantage to 

one side of a market over the other when 

negotiating a transaction. OMB Circular No. A–4, p. 

17 (Nov. 9, 2023). 

14094 (Modernizing Regulatory Review), 

and DOT Regulatory Policies and 

Procedures 

B. Advance Notice of Proposed 

Rulemaking 

C. Regulatory Flexibility Act 

D. Assistance for Small Entities 

E. Unfunded Mandates Reform Act of 1995 

F. Paperwork Reduction Act 

G. E.O. 13132 (Federalism) 

H. Privacy 

I. E.O. 13175 (Indian Tribal Governments) 

J. National Environmental Policy Act of 

1969 

K. Rulemaking Summary 

I. Public Participation and Request for 

Comments 

A. Submitting Comments 

If you submit a comment, please 

include the docket number for this 

NPRM (FMCSA–2023-0257), indicate 

the specific section of this document to 

which your 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 phone number in the body 

of your document so FMCSA can 

contact you if there are questions 

regarding your submission. 

To submit your comment online, go to 

https://www.regulations.gov/docket/ 

FMCSA-2023-0257/document, click on 

this NPRM, click ‘‘Comment,’’ and type 

your comment into the text box on the 

following screen. 

If you submit your comments by mail 

or hand delivery, submit them in an 

unbound format, no larger than 81⁄2 by 

11 inches, suitable for copying and 

electronic filing. 

FMCSA will consider all comments 

and material received during the 

comment period. 

Confidential Business Information (CBI) 

CBI is commercial or financial 

information that is both customarily and 

actually treated as private by its owner. 

Under the Freedom of Information Act 

(5 United States Code (U.S.C.) 552), CBI 

is exempt from public disclosure. If 

your comments responsive to the NPRM 

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 NPRM, 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 Freedom of 

Information Act, and they will not be 

placed in the public docket of the 

NPRM. Submissions containing CBI 

should be sent to Brian Dahlin, Chief, 

Regulatory Evaluation Division, Office 

of Policy, FMCSA, 1200 New Jersey 

Avenue SE, Washington, DC 20590– 

0001 or via email at brian.g.dahlin@

dot.gov. At this time, you need not send 

a duplicate hardcopy of your electronic 

CBI submissions to FMCSA 

headquarters. Any comments FMCSA 

receives not specifically designated as 

CBI will be placed in the public docket 

for this rulemaking. 

B. Viewing Comments and Documents 

To view any documents mentioned as 

being available in the docket, go to 

https://www.regulations.gov/docket/ 

FMCSA-2023-0257/document and 

choose the document to review. To view 

comments, click this NPRM, then click 

‘‘Browse Comments.’’ If you do not have 

access to the internet, you may view the 

docket online by visiting Dockets 

Operations 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., 

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 Dockets 

Operations. 

C. Privacy 

In accordance with 5 U.S.C. 553(c), 

DOT solicits comments from the public 

to better inform its regulatory process. 

DOT posts these comments, including 

any personal information the 

commenter provides, to 

www.regulations.gov as described in the 

system of records notice DOT/ALL 14 

(Federal Docket Management System 

(FDMS)), which can be reviewed at 

https://www.transportation.gov/ 

individuals/privacy/privacy-act-systemrecords-notices. The comments are 

posted without edit and are searchable 

by the name of the submitter. 

D. Comments on the Information 

Collection 

Written comments and 

recommendations for the information 

collection discussed in this NPRM 

should be sent within 60 days of 

publication to www.reginfo.gov/public/ 

do/PRAMain. Find this information 

collection by clicking the link that reads 

‘‘Currently under Review—Open for 

Public Comments.’’ 

II. Executive Summary 

A. Purpose and Summary of the 

Regulatory Action 

Property brokers match motor carriers 

with shippers, which can create new 

business opportunities for motor 

carriers and transportation solutions for 

shippers. This business model can also 

lead to an asymmetry of information 

between parties, which in turn can 

affect the contracting process by 

limiting parties’ ability to negotiate for 

their desired terms.1 These risks can 

lead to market inefficiencies, such as 

decreased freight capacity or decreased 

market competition, which can arise 

when parties lack material information 

about the transaction. FMCSA and its 

predecessor agencies have attempted to 

address these problems by requiring 

property brokers to keep certain records 

of their transactions and make the 

records available to motor carriers and 

shippers involved in those transactions. 

Making the records available to the 

transacting parties, sometimes referred 

to as ‘‘broker transparency,’’ is meant to 

inform business decisions and enable 

self-policing of abuses that may arise. 

The Agency has received rulemaking 

petitions and other input from the 

public, however, that indicate many 

motor carriers cannot review the 

brokers’ transaction records as the 

broker recordkeeping regulation 

intends. Brokers often include 

provisions in their contracts with motor 

carriers that require motor carriers to 

waive their ability to review broker 

records. In addition, even without 

waiver clauses, motor carriers often face 

practical hurdles in accessing records 

that they should be able to review under 

the current regulations. As a result of 

the SBTC and OOIDA petitions, the 

Agency reviewed its property broker 

recordkeeping requirements and is 

proposing certain amendments to those 

requirements. The proposed 

amendments are intended to reinforce 

broker transparency for motor carriers 

and to better tailor the required contents 

of the records to the purpose of broker 

transparency. 

The current and proposed regulations 

are based on the Agency’s authority to 

regulate the procurement of interstate 

transportation, which includes authority 

over property brokers and their 

arrangement of transportation. The 

Agency has the authority to collect 


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information from brokers and require 

them to keep certain records. The 

Agency also has authority over the 

registration of property brokers, and 

when registering them, to determine 

whether the broker is willing and able 

to comply with all applicable 

regulations, including the recordkeeping 

regulations. In exercising its authority 

over brokers, the Agency is required to 

provide for the protection of motor 

carriers and shippers. The proposed rule 

would use and implement this authority 

by revising the broker recordkeeping 

requirements to further protect motor 

carriers and promote efficiency within 

the motor carrier transportation system. 

B. Summary of Major Provisions 

FMCSA proposes several amendments 

to 49 CFR 371.3, ‘‘Records to be kept by 

brokers.’’ The first proposed provision 

would require property brokers to keep 

their records in an electronic format. 

This provision would serve the purpose 

of broker transparency by making it 

easier for motor carriers and shippers to 

review broker records on request, and 

remotely, as compared to the current 

practice of some brokers who respond to 

transparency requests by making only 

physical records available at their 

principal place of business. The Agency 

believes that many brokers already 

maintain their records in an electronic 

format. 

The second proposed provision 

would modernize and tailor the 

required contents of the records to better 

achieve broker transparency. The 

current requirement uses a distinction 

between brokerage and non-brokerage 

services, which is rooted in a previous 

regulatory approach. FMCSA proposes 

eliminating this distinction and instead 

requiring that the records contain, for 

each shipment in the transaction, all 

charges and payments connected to the 

shipment, including a description, 

amount, and date. This is substantially 

similar to the current requirement but 

removes the outdated distinction. The 

record would also be required to 

include any claims connected to the 

shipment, such as a shipper’s claims for 

damage or delay. This amendment 

would ensure the parties have full 

visibility into the payments, fees, and 

charges associated with the transaction 

so they can resolve issues and disputes 

among themselves without resorting to 

costlier remedies. 

The third proposed provision would 

clarify the obligation imposed on 

brokers to respond to requests for 

transaction records and the process 

parties must follow when requesting 

and supplying such records. The current 

regulation frames the broker 

transparency requirement as a right, 

given to the transacting parties, to 

review the records. The proposed 

amendment would reframe broker 

transparency as a regulatory duty 

imposed on brokers to provide records 

to the transacting parties. 

The fourth proposed provision would 

require brokers to provide the records 

required to be maintained under 

§ 371.3(a) within 48 hours when a party 

to the transaction requests those 

records. This provision is intended to 

ensure that the requesting party receives 

the records in a timely manner, to 

support the resolution of issues around 

service or payment. 

C. Costs and Benefits 

Broker transparency is intended to 

enable efficient outcomes in the 

transportation industry by providing the 

material information necessary for the 

transacting parties to make informed 

business decisions. Broker transparency 

also supports the efficient resolution of 

disputes between parties. Though the 

current regulations are meant to provide 

broker transparency, the Agency has 

heard through numerous listening 

sessions and comments from motor 

carriers that broker transparency is rare 

in practice. The Agency believes the 

revisions to the regulation will make it 

more likely that brokers will comply 

with their regulatory duty to provide 

information. The Agency analyzes these 

potential benefits qualitatively and 

seeks further information and data from 

the public to better analyze the benefits. 

Some motor carriers believe that 

increased broker transparency would 

have a material effect on negotiated 

freight rates. The Agency believes that 

other market factors, rather than the 

availability of additional information 

through broker transparency, are likely 

dominant in setting freight rates. 

However, the Agency has not ruled out 

the possibility that motor carriers and 

shippers could negotiate for better rates 

over time using the broker transparency 

information. The Agency seeks further 

comment on this issue. 

The Agency believes that the cost of 

the proposed rule would be minimal. 

Based upon its interactions with 

brokers, the Agency believes that most 

brokers already keep records 

electronically and that these records 

already contain the information that 

would be required by the proposed rule. 

The Agency believes that brokers 

already provide information and 

documents, e.g., rate confirmation 

documents, to motor carriers. The 

Agency believes that these current 

practices can be adjusted, at relatively 

low cost, to provide broker transparency 

information within 48 hours of request. 

The Agency analyzes these potential 

costs qualitatively and seeks further 

information and data from the public to 

better analyze the costs. The Agency 

does not believe that this rule would be 

economically significant. 

III. Abbreviations 

API Application programming interface 

BLS Bureau of Labor Statistics 

COVID–19 Coronavirus disease 2019 

DOJ Department of Justice 

DOT Department of Transportation 

DTSA Defend Trade Secrets Act of 2016 

EDI Electronic data interchange 

FHWA Federal Highway Administration 

FMCSA Federal Motor Carrier Safety 

Administration 

FR Federal Register 

HHG Household goods 

ICC Interstate Commerce Commission 

IT Information technology 

MATS Mid-America Trucking Show 

NAICS North American Industry 

Classification System 

NCCDB National Consumer Complaint 

Database 

NPRM Notice of proposed rulemaking 

OIRA Office of Information and Regulatory 

Affairs 

OMB Office of Management and Budget 

OOIDA Owner-Operator Independent 

Drivers Association 

PIA Privacy Impact Assessment 

PII Personally identifiable information 

PPP Paycheck Protection Program 

PTA Privacy Threshold Assessment 

SAS Service Annual Survey 

SBA Small Business Administration 

SBTC Small Business in Transportation 

Coalition 

Secretary Secretary of Transportation 

TIA Transportation Intermediaries 

Association 

UMRA Unfunded Mandates Reform Act of 

1995 

U.S.C. United States Code 

IV. Legal Basis 

The Secretary of Transportation 

(Secretary) has general jurisdiction to 

establish regulations concerning the 

procurement by property brokers of forhire transportation in interstate or 

foreign commerce (49 U.S.C. 13501). 

The Secretary is authorized to obtain 

information from motor carriers, 

brokers, and other related parties that 

the Secretary determines is necessary to 

ensure a transportation system that 

meets the needs of the United States (49 

U.S.C. 13101 and 13301(b)). 

The Secretary has broad authority to 

adopt regulations to carry out the 

requirements of the commercial statutes 

in Title 49 U.S.C., subtitle IV, part B (49 

U.S.C. 13301(a)). Some of the needs 

articulated in the national 

transportation policy (49 U.S.C. 13101) 

include encouraging fair competition 

and reasonable rates for transportation 

by motor carriers of property; promoting 


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 91651 

2The previous version of the statute (located at 

49 U.S.C. 13904(c)) only required the Secretary to 

provide for the protection of shippers by motor 

vehicle in broker regulations. The Moving Ahead 

for Progress in the 21st Century Act (MAP–21), 

Public Law 112–141 (July 6, 2012), amended this 

provision to include the protection of motor carriers 

as a requirement for regulations applicable to 

brokers. Sec. 32916, Public Law 112–141, 126 Stat. 

820 (July 6, 2012). 

efficiency in the motor carrier 

transportation system; enabling efficient 

and well-managed motor carriers to earn 

adequate profits, attract capital, and 

maintain fair wages and working 

conditions; and improving and 

maintaining a sound, safe, and 

competitive privately owned motor 

carrier system. The Secretary is also 

authorized to prescribe the form of any 

required records prepared or compiled 

by brokers, including those related to 

movement of traffic and receipts and 

expenditures of money, and the time 

period for preservation of such records 

(49 U.S.C. 14122). Furthermore, under 

49 U.S.C. 13904(e), regulations 

applicable to brokers ‘‘shall provide for 

the protection of motor carriers and 

shippers by motor vehicle.’’ 2

In recent years, many motor carriers, 

industry-wide, have expressed concern 

about their inability to access records 

pertaining to their transactions with 

brokers. The inability to obtain these 

records from brokers has led to financial 

harm, including but not limited to, an 

inability to present a proper defense 

when shippers or brokers allege 

problems with a shipment. Because 

FMCSA’s mandate under 49 U.S.C. 

13904 specifically includes providing 

for the protection of motor carriers with 

respect to broker regulations, and 

because a records-transmittal regulation 

would protect both motor carriers and 

shippers, FMCSA’s promulgation of 

such a regulation is authorized by 49 

U.S.C. 13904(e). 

This rulemaking is intended to 

address an asymmetry of information 

between brokers, shippers, and motor 

carriers that affects the ability of all 

parties to participate effectively in a fair, 

efficient transportation system. FMCSA 

intends to modernize regulations 

applicable to broker recordkeeping and 

disclosure while complying with the 

requirement in 49 U.S.C. 13904(e) to 

ensure that the regulations provide for 

the protection of motor carriers and 

shippers. FMCSA relies on the statutory 

authorities cited above. 

Authority to carry out the functions 

and exercise the authorities cited above 

is delegated to the FMCSA 

Administrator under 49 CFR 1.87(a)(1)– 

(3) and (5)–(6). 

V. Background 

FMCSA regulates property brokers, 

defined as persons who, for 

compensation, arrange or offer to 

arrange the transportation of property by 

an authorized motor carrier (49 CFR 

371.2(a)). The property broker 

regulations include recordkeeping 

requirements, for each transaction, at 49 

CFR 371.3 ‘‘Records to be kept by 

brokers.’’ A brokered transaction for 

transportation of property involves at 

least a shipper seeking to have the 

property transported, a carrier willing to 

transport the property, and a broker who 

arranges the transportation. There may 

be separate contracts between the broker 

and the shipper and between the broker 

and the carrier, but the broker, carrier, 

and shipper are all party to the same 

brokered transaction for the purpose of 

the broker recordkeeping regulation. 

The relationship between the parties is 

further explained in the Property Broker 

Practices NPRM (45 FR 31140, 31141, 

May 12, 1980). Under the broker 

recordkeeping regulation, FMCSA 

requires brokers to make certain 

transaction records available to the 

transacting parties, that is, the shipper, 

the motor carrier, and any other party to 

the brokered property transaction. The 

availability of this information is 

sometimes referred to as ‘‘broker 

transparency.’’ The term should not be 

misunderstood to mean public 

disclosure of the information, i.e., 

‘‘public transparency.’’ 

FMCSA proposes to amend the broker 

transparency requirement. FMCSA 

initiated the rulemaking based on the 

grant of two rulemaking petitions 

regarding broker transparency, and the 

Agency has also received input on the 

topic through several related actions. 

The petitions and related actions are 

summarized below. The broker 

transparency regulation has a long 

history, with several predecessor rules 

and regulations. The regulatory history 

is summarized below. 

A. History of Property Broker 

Regulations 

Congress tasked the Interstate 

Commerce Commission (ICC) with 

regulating the motor carrier industry in 

the Motor Carrier Act of 1935, which 

included regulating property brokers 

operating in the industry (Pub. L. 74– 

255). The ICC issued its initial rule 

regulating brokers in 1949 (14 FR 2833, 

May 28, 1949). The rule was based on 

an ICC report entitled Practices of 

Property Brokers (Ex Parte MC–39, 49 

Motor Carrier Cases (MCC) 277 (May 16, 

1949)). The report contemplated 

imposing a cap on broker commissions 

to address concerns over alleged 

excesses. The ICC postponed 

implementation of a cap because it 

lacked information to determine an 

appropriate upper limit. In the interim, 

the ICC believed that concerns over 

commissions could be addressed by 

having brokers maintain a public 

schedule of services with their 

maximum charges for brokerage 

services. The cap was not pursued 

further, and the interim solution 

persisted, as described in the follow-on 

report ‘‘Practices of Property Brokers’’ 

(Ex Parte MC–39, 53 MCC 633 (Dec. 27, 

1951)). 

The property broker regulations 

remained unmodified for several 

decades, except for a recodification that 

relocated them within Title 49, from 

part 167 to part 1045 (49 FR 20003, Dec. 

20, 1967). On May 12, 1980, the ICC 

published an NPRM to revise the 

property broker regulations (45 FR 

31140). This proposed rule sought to 

eliminate unnecessary regulations and 

to modify regulations that were 

unnecessarily restrictive. The intent 

generally aligned with the purpose of 

the Motor Carrier Act of 1980 (Pub. L. 

96–296), which was not in force at the 

time, but which was enacted a few 

months later, on July 1, 1980. The ICC 

made this connection clear in the final 

rule published on October 17, 1980 (45 

FR 68941). That rule explained that 

Congress had given the ICC the general 

mandate to open up the bargaining 

process between shippers and motor 

carriers, and it sought to remove 

unnecessary restrictions which might 

impede the free operation of the 

marketplace. The ICC viewed its 

revisions to the property broker 

regulations as consistent with those 

goals. The rulemaking put into place 

regulations that are substantially similar 

to FMCSA’s current property broker 

regulations. 

The final rule included a revised 49 

CFR 1045.3, which had the same 

requirements as the current 49 CFR 

371.3 in all significant respects, 

including the recordkeeping 

requirement placed on brokers and the 

right of each party to the transaction to 

review the record. In discussing the 

revisions to the required records in the 

NPRM, the ICC stated that the primary 

purpose of the recordkeeping 

requirements was to ascertain whether 

improper rebating activities were taking 

place, and it noted that the proposed 

rule also included revisions to the 

rebating rules (45 FR 31140). When the 

ICC issued the original property broker 

regulations, it was concerned with a 

form of indirect rebating where brokers 

would undercharge for services to 


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3FMCSA issued guidance on the definitions of 

‘‘broker’’ and ‘‘bona fide agent,’’ including guidance 

on the role dispatch services play in the 

transportation industry and clarification on when 

such entities must register as brokers, on November 

16, 2023 (88 FR 39368). 

4The petition for rulemaking and denial letters 

are available in the docket for this rulemaking. 

shippers as a means to secure and 

control the shippers’ traffic and make 

up for the undercharging by charging 

motor carriers instead (49 MCC 277, 

317–18). In the 1980 NPRM, the ICC 

stated that this concern over indirect 

rebating was no longer valid, and it 

revised the rebating regulations 

accordingly (45 FR 31140, 31141). 

After explaining the revisions to the 

required record contents, the ICC then 

explained the addition of the right-toreview requirement as a replacement for 

more complex requirements in 

§§ 1045.5, 1045.6, and 1045.10 (45 FR 

31140). The ICC explained that § 1045.5, 

which required brokers to make their 

maximum prices for brokerage services 

publicly available and to adhere to those 

prices, could be rendered ineffective by 

brokers giving a wide price range 

instead (45 FR 31140, 31141). The same 

was true of § 1045.6, which set forth 

similar restrictions on prices for nonbrokerage services. In removing these 

regulations in favor of the new 

§ 1045.3(c), the ICC explained that the 

new regulation would enable parties to 

determine what portion of their bill was 

related to the broker’s services (45 FR 

31140, 31141). Section 1045.10 

prohibited brokers from charging both 

the shipper and the carrier for a service 

without first advising both parties of the 

details of the charges. The ICC stated 

that this requirement was unnecessary 

and potentially burdensome since 

proper notification could delay service, 

particularly when the broker was trying 

to arrange freight transportation on an 

expedited basis, and it was replaced by 

the right to review in § 1045.3(c) (45 FR 

31140, 31141). The broker regulations 

remain substantially the same as when 

they were amended in 1980. 

In 1996, pursuant to the ICC 

Termination Act (Pub. L. 104–88), 

responsibility for certain transportation 

regulations was transferred from the ICC 

to DOT and delegated by DOT to FHWA 

(61 FR 54706, Oct. 21, 1996). This 

transfer and redesignation included part 

1045, which was moved to part 371. 

Part 371 was subject to a minor 

technical amendment in 1997 but has 

remained otherwise unchanged since 

that time (62 FR 15417, Apr. 1, 1997). 

FMCSA assumed responsibility for part 

371 when the Agency was created by 

the Motor Carrier Safety Improvement 

Act of 1999 (Pub. L. 106–159), and the 

Secretary subsequently delegated 

authority to administer 49 U.S.C. 

chapters 131, 133, 135, and 139 to the 

FMCSA Administrator (65 FR 220, Jan. 

4, 2000). 

B. History of the Current Rulemaking 

On May 6, 2020, the Small Business 

in Transportation Coalition (SBTC) 

petitioned the Department to initiate a 

rulemaking amending the broker 

transparency regulation. SBTC 

described § 371.3, the broker 

transparency regulation, as providing 

motor carriers with a ‘‘right to know’’ 

the rate offered by the broker as a 

proportion of the rate paid by the 

shipper to the broker. SBTC raised 

concerns about the widespread practice 

of brokers including clauses in their 

contracts that waive a carrier’s rights 

under § 371.3(c). Transparency is 

necessary for a market to operate in an 

ethical and fair manner, SBTC argued, 

and the prevalence of waiver clauses 

undercuts that transparency. As a 

remedy, the petition proposed 

prohibiting brokers from requiring 

waiver of broker transparency as a 

condition of doing business. SBTC’s 

petition referenced the economic 

impacts of the COVID–19 national 

emergency, impacts that were being 

acutely felt when the petition was filed 

in May 2020. 

On May 19, 2020, the Owner-Operator 

Independent Drivers Association 

(OOIDA) petitioned the Department to 

initiate a rulemaking amending the 

broker transparency regulation. The 

petition sought two changes to § 371.3. 

First, the petition proposed adding a 

requirement that brokers provide a copy 

of the transaction record required under 

§ 371.3(a), in an electronic format, 

within 48 hours of the service being 

completed. Second, the petition 

proposed prohibiting brokers from 

including clauses in their contracts that 

waive motor carriers’ rights to access the 

transaction records required under 

371.3. The petition argued that the 

prevalence of waiver clauses and 

instances of retaliation by brokers 

against motor carriers seeking to 

exercise their rights under § 371.3(c) 

undercut the transparency envisioned 

by § 371.3. As with the SBTC petition, 

the OOIDA petition referenced the 

economic conditions affecting truckers 

at the time. Both petitions for 

rulemaking are included in the docket 

for this rulemaking. 

FMCSA published a notice in the 

Federal Register on August 19, 2020, 

requesting public comment on OOIDA’s 

and SBTC’s rulemaking petitions (85 FR 

51145). On October 16, 2020, the 

Agency extended the comment period 

by 30 days (85 FR 65898). The Agency 

received 1,391 comments on OOIDA’s 

and SBTC’s rulemaking petitions by the 

end of the extended comment period. 

The public commented on the 

transparency of charges and payments, 

broker margins, freedom of contract, 

pricing confidentiality, and the history 

of the broker transparency regulation. 

These issues are discussed below in 

Section VI.B., Comments and Agency 

Responses. On March 16, 2023, FMCSA 

granted OOIDA’s and SBTC’s 

rulemaking petitions. In the letters 

granting the SBTC and OOIDA petitions, 

FMCSA made clear that, while the 

Agency found good cause to open a 

rulemaking to amend 49 CFR 371.3, the 

proposed rule would not necessarily 

include the changes SBTC or OOIDA 

sought. The letters granting the petitions 

are available in the docket for this 

rulemaking. 

C. Related Actions 

In the time between the filing and 

grant of these petitions several related 

actions have provided the Agency with 

further information about broker 

transparency and wider context of the 

rulemaking. The related actions also 

indicate that the concerns surrounding 

broker transparency have persisted 

beyond the specific economic 

conditions of the freight industry in 

2020. 

Shortly after the OOIDA and SBTC 

petitions were filed, the Transportation 

Intermediaries Association (TIA) filed a 

rulemaking petition on August 4, 2020, 

seeking the elimination of § 371.3(c) and 

requesting guidance on dispatch 

services. Only the portion directed 

towards the elimination of § 371.3(c) is 

relevant to this rulemaking.3 The TIA 

petition argued that the regulation is 

outdated given the changes in the 

brokered freight industry since the 

regulation was introduced in 1980. The 

petition further argued that broker 

transparency jeopardizes the 

confidentiality of proprietary pricing, 

and that motor carriers have sufficient 

information about prevailing rates to 

make informed business decisions 

without needing the records required by 

§ 371.3. 

The Agency published a request for 

public comments regarding TIA’s 

petition on November 25, 2020 (85 FR 

75280) and received 179 comments in 

response. These comments were 

substantially similar to those filed in 

response to the OOIDA and SBTC 

petitions. FMCSA denied TIA’s petition 

on March 17, 2023.4 In denying the 


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5The transcript of the listening session is 

available in the docket for this rulemaking. 

6See, e.g., Comment FMCSA–2023–0268–0026 

(comment on ‘‘Fees for the Unified Carrier 

Registration Plan and Agreement’’) available at 

https://www.regulations.gov/comment/FMCSA2023-0268-0026; comment FMCSA–2016–0102– 

0351 (comment on ‘‘Broker and Freight Forwarder 

Financial Responsibility’’) available at https://

www.regulations.gov/comment/FMCSA-2016-0102- 

0351. 

petition, the Agency stated that TIA’s 

proposal would be contrary to the stated 

transportation policy goals in 49 U.S.C. 

13101, including promotion of fairness 

and efficiency in the transportation 

industry. 

While the SBTC, OOIDA, and TIA 

petitions were pending, FMCSA held a 

public listening session on October 28, 

2020, regarding the three petitions and 

property brokers in general (85 FR 

64613, Oct. 13, 2020). FMCSA received 

76 written comments in response to the 

Federal Register notice announcing the 

listening session. During the listening 

session, participants expressed concerns 

about freight rates, disclosure of 

confidential pricing information, motor 

carriers directly soliciting shippers, socalled ‘‘double brokering,’’ recordkeeping costs, comparisons to other 

industries, charge backs, and detention 

time fees. 

The Agency has received additional 

input from the public on the topic of 

broker transparency in several other 

contexts. In March 2023, the Agency 

held a listening session at the MidAmerica Trucking Show (MATS) shortly 

after granting the SBTC and OOIDA 

petitions.5 Despite the Agency’s public 

statement that the listening session 

would focus on other broker matters, 

including financial responsibility, 

public commenters at MATS focused on 

broker transparency. Many of the 

transparency related concerns were 

consistent with those raised in the 

comments on the OOIDA and SBTC 

rulemaking petitions in 2020, suggesting 

that the issues raised at the time of the 

public comment period for those 

petitions had not subsided as of March 

2023. 

The topic of broker transparency has 

also appeared in the comments received 

on other proposed rules.6 While 

comments are most useful to the Agency 

when directed towards the subject 

matter of the public notice to which 

they respond, the Agency acknowledges 

these ancillary comments as evidence of 

continuing concerns around broker 

transparency. 

VI. Discussion of Proposed Rulemaking 

and Comments 

FMCSA proposes this rulemaking in 

response to OOIDA’s and SBTC’s 

petitions. The NPRM differs in certain 

ways from the provisions sought by 

OOIDA and SBTC, as discussed below. 

The rulemaking is also informed by the 

comments received in response to the 

petitions, as well as in the related 

actions detailed elsewhere in this 

NPRM. The comments, input from 

related actions, and the Agency’s 

responses are discussed after the 

provisions of the proposed rulemaking. 

A. Proposed Rulemaking 

To address the concerns over broker 

transparency raised in the rulemaking 

petitions and subsequent public 

comments, FMCSA proposes the 

following amendments to § 371.3, 

‘‘Records to be kept by brokers,’’ 

presented in the order in which they 

would appear in the section. The 

Agency also proposes a conforming 

amendment to § 371.2, ‘‘Definitions.’’ 

Sections 371.2 and 371.3 apply to all 

property brokers FMCSA regulates, as 

would the proposed amendments. 

Property brokers are divided between 

household goods (HHG) brokers, who 

arrange the transportation of personal 

property between homes, and non-HHG 

(i.e., general freight) brokers. FMCSA 

believes that the broker transparency 

regulation should continue to apply 

equally to HHG brokers and general 

freight brokers, and the Agency has not 

identified any rationale for imposing 

different transparency requirements on 

HHG brokers versus general freight 

brokers. The comments received to date 

do not raise any broker transparency 

concerns unique to HHG brokers, and 

the Agency seeks comment on this 

issue. 

1. Brokers Must Keep Records in an 

Electronic Format 

FMCSA proposes requiring that the 

records covered by § 371.3(a) be kept in 

an electronic format to promote 

compliance with the broker 

transparency requirement in § 371.3(c). 

The Agency is aware of brokers avoiding 

meaningful compliance with § 371.3(c) 

by making the required records 

available for inspection only at their 

principal place of business, which often 

makes inspection by the motor carrier 

difficult or impossible. By requiring that 

the records be kept in an electronic 

format, the Agency intends to remedy 

this issue. Because the Agency, based on 

its interactions with various brokers, 

believes that most freight brokers 

already keep their records in an 

electronic format, this requirement 

should not impose a significant burden 

on these brokers. FMCSA believes that 

electronic recordkeeping may not be as 

common among household goods 

brokers and seeks comment on what 

burden, if any, would be imposed upon 

those brokers if electronic 

recordkeeping were required. 

2. Revisions to the Required Contents of 

Brokers’ Records 

Within the recordkeeping 

requirements of § 371.3, paragraph (a) 

specifies the details that the records 

must contain. The Agency proposes the 

following revisions to ensure that the 

records are tailored to the needs of the 

parties, therefore better addressing the 

concerns of motor carriers while not 

imposing unnecessary recordkeeping 

burdens on brokers. 

Date of Payment 

The Agency proposes adding the date 

of payment from both the shipper to the 

broker and from the broker to the 

carrier. Some brokers commented that 

they bear significant risk because they 

tender payment to motor carriers prior 

to receiving payment from shippers, for 

instance, in a situation where the carrier 

is paid within 3 days of delivering a 

load, but the shipper has 30 days to pay 

the broker. On the other hand, motor 

carriers have commented about not 

being paid by brokers in a timely 

manner, often in the context of a charge 

back or other contractual dispute over 

whether the carrier performed their 

duties adequately under the contract. 

Including the date of payment would 

provide transparency to all parties about 

the benefits and risks of the carrier’s 

payment structure. It would also 

provide motor carriers with necessary 

information in the event they 

experience charge backs or other 

instances of nonpayment, because the 

carrier would be better able to 

understand any deductions the shipper 

may have made to the payment it 

remitted to the broker and to verify that 

those deductions correspond to the 

charge back against the carrier. 

Elimination of Brokerage Service vs. 

Non-Brokerage Service Distinction 

The Agency proposes eliminating the 

distinction between brokerage services 

and non-brokerage services in § 371.3(a) 

by removing current paragraph (5) and 

revising paragraph (4). This distinction 

was originally made by the ICC in its 

1949 rule, which was based on the 

‘‘Practices of Property Brokers’’ report. 

As explained in the report, the ICC was 

contemplating a cap on brokers’ 

commissions. The ICC distinguished 

between brokerage and non-brokerage 

services to support implementation of 

the cap and to prevent brokers from 

circumventing it through charges for 

non-brokerage services. The 


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contemplated cap was deferred from the 

1949 rule and ultimately never adopted. 

Despite this, the distinction between 

brokerage and non-brokerage services 

was included as part of the rule and has 

remained in the regulations ever since. 

The Agency believes that the 

distinction between brokerage and nonbrokerage services is unnecessary for the 

purposes of the broker transparency 

regulation and proposes removing the 

distinction in favor of a simpler 

itemization requirement described 

below. The term non-brokerage service 

is defined at § 371.2(d), and used only 

in § 371.3(a)(5), so the Agency also 

proposes removing the definition of 

non-brokerage service, which would no 

longer be used. 

Itemization of Charges and Fees 

The Agency proposes clarifying that 

the records must itemize all charges and 

fees associated with the brokerage 

service, to include an amount and 

description of each charge and fee. 

Brokers would also be required to 

itemize any penalties assessed in 

connection with the shipment, for 

example, a penalty for late delivery or 

cargo damage. This revision is intended 

to ensure the parties have visibility into 

the payments, fees, and charges 

associated with the transaction, and can 

resolve issues and disputes without 

resorting to costlier remedies. 

3. Brokers Must Provide Records Upon 

Request 

In their petitions, both OOIDA and 

SBTC sought an explicit ban on waivers 

of the requirements in 371.3(c). 

However, as a general principle, parties 

are permitted to waive any right unless 

Congress, by statute, specifically makes 

a right non-waivable. The Agency has 

not identified any statutory provision in 

which Congress expressly barred 

waivers in this context, and therefore 

the Agency has not included the 

requested language in the revised 

regulation. The petitions did, however, 

identify inconsistencies between this 

regulation and the rest of part 371, 

which the Agency intends to address 

through this rulemaking. To this end, 

the Agency proposes amending the 

language of § 371.3(c) to more accurately 

describe the regulatory obligation 

imposed on brokers and the process for 

requesting and supplying transaction 

records. 

When the ICC issued the broker 

transparency regulation in 1980, it 

stated that it would enable the 

elimination of other, more complex 

regulations. One of the major provisions 

eliminated, former 49 CFR 1045.10, 

related to the duties and obligations of 

a broker, which included giving fair 

advice to shippers and not 

misrepresenting or making false 

promises about the services motor 

carriers would provide; not 

misrepresenting or giving false 

information to motor carriers about the 

commodities in the shipment; advising 

both the shipper and carrier of the 

amount and basis of any compensation 

being received from the other; 

exercising due diligence in carrying out 

the terms of its contracts with shippers 

and motor carriers and ensuring prompt 

payment; and paying any freight charges 

in full to the carrier or carriers without 

deduction for any amount due to the 

broker from such carrier or carriers. The 

ICC was clear that its intention was not 

to eliminate these duties and 

responsibilities entirely, but rather that 

providing shippers and carriers with the 

ability to review the transaction records 

would ensure that brokers were acting 

honestly and fairly. 

By phrasing the requirement as a 

private ‘‘right to review,’’ the original 

regulation did not prohibit a broker 

from requiring a waiver of the private 

‘‘right to review’’ as a condition of 

brokering a load to a motor carrier and 

did not contain an enforcement 

mechanism for the Agency to enforce 

the private ‘‘right to review.’’ However, 

FMCSA believes the original wording 

did not adequately capture the ICC’s 

intent that brokers continue to comply 

with those duties and obligations, 

particularly disclosure of such records 

to shippers and motor carriers who find 

value in such information. To address 

these concerns, FMCSA has reframed 

the disclosure requirement as a 

regulatory obligation, as the Agency 

believes this more closely aligns with 

the original intent of the regulation. 

Moreover, a regulated entity must 

adhere to the regulations and cannot 

‘‘disguise its regulatory obligations as 

contractual ones.’’ Taylor Energy Co. 

LLC v. United States, 975 F.3d 1303, 

1306 (Fed. Cir. 2020). These changes 

would also ensure that the language in 

§ 371.3(c) is consistent with the other 

broker requirements in part 371. 

The proposed amendments to 

§ 371.3(c) would clarify that brokers 

maintain a continuing duty to act fairly 

and honestly, and that visibility into the 

transaction records is the mechanism by 

which shippers and carriers can ensure 

that brokers are complying with this 

duty. The requirement to provide the 

records upon request would thus be 

made explicit as a regulatory obligation. 

The proposed rule would not, however, 

prohibit brokers from including 

confidentiality clauses in their contracts 

with motor carriers. As long as brokers 

are complying with the requirement to 

disclose records upon request, the 

parties may negotiate and reach 

agreements regarding non-disclosure of 

the information to non-parties. 

4. Records Must Be Provided Within 48 

Hours of Request 

As discussed in the comments, the 

Agency is aware of brokers avoiding 

meaningful compliance with the 

regulation by delaying the availability of 

records for review, and by restricting 

access for review to their principal place 

of business. The Agency proposes 

amending § 371.3(c) to require that 

records must be provided within 48 

hours. This amendment is intended to 

provide the requestor with the records 

in a timely fashion, which enables the 

use of the records to resolve any issues 

around service or payment. By requiring 

the broker to ‘‘provide’’ records 

electronically, this amendment is 

intended to prevent a broker from only 

making its records available for review 

at its principal place of business or 

another, potentially inconvenient, 

location. Instead, the amendment 

plainly places the responsibility of 

delivering the information to the 

requestor on the broker. 

B. Comments and Agency Responses 

In the notice requesting public 

comment on OOIDA’s and SBTC’s 

rulemaking petitions (85 FR 51145, Aug. 

19, 2020), the Agency posed a series of 

questions regarding the rulemaking 

sought by the petitions. FMCSA 

received a large number of comments in 

response to the notice, and in 

subsequent related actions, many 

responsive to the questions posed and 

others raising additional issues for the 

Agency’s consideration. The comments 

expressed a range of views from motor 

carriers, brokers, and other interested 

parties, and the Agency’s proposed 

rulemaking is informed by this input. 

1. The Agency’s Authority Over Broker 

Transparency 

The first question the Agency posed 

in the notice regarding the rulemaking 

petitions referenced FMCSA’s existing 

authorities related to brokers (49 U.S.C. 

13101–14916) and asked what statutory 

provisions, if any, would be carried out 

by the regulatory changes requested 

petitioners requested. Both successful 

petitioners, OOIDA and SBTC, indicated 

that FMCSA has existing authority to 

carry out the proposed changes in the 

petitions for rulemaking. OOIDA 

indicated Congress has required the 

Secretary, and hence FMCSA, to 

regulate brokers to protect motor 

carriers, including requiring brokers to 


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7See In the Matter of Darlene Riojas, Manuel J. 

Riojas, Four Star Trucking, Inc., 7 Star Transport, 

LLC—Order Dismissing Three Charges for Lack of 

Subject Matter Jurisdiction, and Reserving Ruling 

on Other Summary Judgment Requests, Docket No. 

FMCSA–2012–0174–0056 (May 8, 2019). This 

decision is available on the internet at https://

www.regulations.gov/document/FMCSA-2012-0174- 

0056. 

have a bond as found in 49 U.S.C. 

13904(e) and (f), as detailed in OOIDA’s 

petition. SBTC indicated FMCSA 

already has existing authority to act on 

these petitions for rulemaking under 

U.S.C. 13101 through 14916, and more 

specifically, 49 U.S.C. 14906, which 

addresses evasion of regulation by 

motor carriers and brokers. 

Few commenters responded directly 

to the Agency’s questions about 

authority. Of those who did, most 

indicated that FMCSA has a mission to 

promote safe operation of commercial 

motor vehicles, and any form of market 

regulation falls outside of this mission. 

Scopelitis, a national transportation law 

firm, for example, indicated there is no 

need for the existing regulations in a 

highly competitive industry, much less 

the proposed addition of even more 

regulatory burden. 

FMCSA also asked how a rule 

restricting the rights of private parties 

(e.g., brokers) from including certain 

terms in their agreements would align 

with the Agency’s statutory authority. 

Few commenters directly addressed this 

question. TIA and MODE 

Transportation, for example, indicated 

that 49 U.S.C. 14101 provides brokers 

the option to include a waiver 

provision. The applicability of 49 U.S.C. 

14101 is discussed in Section VI.B.8. 

The National Association of Small 

Trucking Companies did not cite a 

specific statute but indicated that 

dictating the terms of contracts between 

private parties was beyond FMCSA’s 

authority. In contrast, OOIDA and SBTC 

commented that FMCSA has the 

authority to restrict private parties from 

including a waiver under FMCSA’s 

existing authority. Overall, there was 

substantial disagreement on this 

question. 

FMCSA response: As discussed in 

Section IV. Legal Basis, the Agency has 

the authority to establish certain 

regulations for property brokers. The 

Agency believes that the proposed rule, 

which revises the recordkeeping 

regulations for property brokers, falls 

squarely within this authority. 

Comments that characterize broker 

transparency as beyond the Agency’s 

authority and unrelated to safety 

oversimplify both the Agency’s 

authority and the purpose of broker 

transparency. FMCSA and its 

predecessor agencies have long been 

responsible for regulating certain 

commercial aspects of motor carrier 

transportation, including broker 

recordkeeping. 

2. FMCSA Enforcement Role 

Question two asked how a rulemaking 

expanding FMCSA’s enforcement of a 

requirement that brokers automatically 

disclose financial details about each 

transaction to the motor carrier 

transporting the load, as requested in 

the OOIDA and SBTC petitions, would 

align with the statutes identified above 

(i.e., 49 U.S.C. 13301 and 14122). 

In its comments on the petitions, CR 

England Logistics stated that the 

rulemakings proposed by OOIDA and 

SBTC do not align with existing FMCSA 

statutes. TIA indicated that disclosure of 

financial details is in direct conflict 

with 49 U.S.C. 14101(b), in addition to 

Congressional intent. A small number of 

commenters, such as TIA, stated 

disclosure of commission, a violation of 

§ 371.3, has not been an issue. TIA 

further stated there have been no 

complaints made to DOT’s National 

Consumer Complaint Database (NCCDB) 

for a violation of a broker not disclosing 

its commission under § 371.3(c). OOIDA 

stated FMCSA would not experience 

additional burdens by adopting the 

changes proposed in the petitions and 

already has existing authority to do so 

under 49 U.S.C. 13904 and 14122. 

FMCSA response: The Agency 

believes that the proposed rulemaking is 

an appropriate exercise of its authority 

that builds on the current recordkeeping 

requirements. Since the filing of these 

petitions, broker transparency has 

become a topic of intense interest in the 

transportation industry. According to 

Agency records, at least 32 complaints 

were received from 2018 through 2020. 

The Agency receives complaints 

through NCCDB and other sources. As 

detailed above, FMCSA believes the 

language of the original regulation does 

not accurately describe the transacting 

parties’ rights and burdens, and that a 

broker’s obligation to provide records is 

not premised on any inherent right of 

the carrier or shipper to receive those 

records, but rather on the Agency’s 

statutory authority to protect motor 

carriers in connection with its broker 

recordkeeping regulations. 

FMCSA has several options for 

enforcing these regulations. In order to 

register with FMCSA, brokers must 

agree to comply with all applicable 

regulations (49 U.S.C. 13904(a)(2)), and 

FMCSA has the authority to suspend or 

revoke a broker’s operating authority for 

willful failure to comply with a 

condition of registration (49 U.S.C. 

13905(d)(2)(A)(iii)). FMCSA may also 

decline to renew a broker’s registration 

if the broker has demonstrated it is not 

willing or able to comply with the 

regulations. 

The Agency has a further option to 

seek a civil penalty for regulatory 

violations. The penalty schedule in 49 

CFR part 386 Appendix B already sets 

out penalties for violations of FMCSA’s 

commercial regulations in paragraph (g), 

as well as penalties for evasion in 

paragraph (i). The existing penalties 

cover violations of this proposed rule, 

so FMCSA does not propose a new 

enforcement mechanism or alter the 

current penalty schedule as part of this 

rulemaking. FMCSA is aware that the 

Department of Justice (DOJ) must bring 

certain enforcement actions for civil 

penalties on behalf of FMCSA.7

However, parties may still file 

complaints with FMCSA for the Agency 

to investigate, take enforcement action 

within its existing authorities, and refer 

to DOJ as appropriate. 

The Agency’s exercise of authority to 

regulate broker recordkeeping, 

including its issuance of broker 

transparency regulations, is not in 

conflict with 49 U.S.C. 14101(b). That 

statute permits shippers and carriers to 

waive certain rights and remedies by 

contract, but for reasons discussed in 

section VI.B.8. of this NPRM, the 

Agency believes brokers are not 

shippers within the meaning set out by 

49 U.S.C. 14101(b). Because the statute 

does not relate to brokers, it does not 

conflict with the Agency’s broker 

transparency regulations. Congress has 

also expressed its clear intent in 49 

U.S.C. 13904(e) for the Agency to issue 

regulations applicable to brokers that 

provide protection for shippers and 

motor carriers, consistent with the 

Agency’s responsibility to carry out the 

objectives of the national transportation 

policy and its general authority to 

regulate brokers of property. 

3. Broker Size as Related to 

Transparency 

The third question in the notice was 

whether the transparency issues raised 

by OOIDA and SBTC are 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 whether 

they are more widespread such that the 

rulemaking should cover all brokers, 

regardless of size. The fourth question 

assumed that transparency issues were 

primarily associated with large brokers 

and asked what revenue threshold 

FMCSA should consider for the 

applicability of any new requirements. 

It also asked how the Agency could 


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obtain accurate information about 

brokers’ revenues. 

Of the commenters that responded 

directly to the third question, the 

majority indicated that the proposed 

rule should apply equally to large and 

small brokers. These commenters 

included brokers and trade associations, 

such as England Logistics and OOIDA, 

and a large number of individuals 

involved in the trucking industry. 

A smaller number of commenters 

responding to question four indicated 

that freight brokers, particularly large 

brokers, due to their size and resources, 

are taking advantage of the current 

situation. However, most commenters 

did not differentiate based on the size of 

the broker but rather stated that brokers 

as a whole were not transparent and 

were not treating motor carriers fairly. 

FMCSA response: The Agency 

believes that the proposed broker 

transparency requirements should apply 

to all brokers, regardless of size, as is the 

case with the current regulation. The 

Agency believes that a lack of broker 

transparency causes problems whether 

the broker who arranged the 

transportation is large or small. 

4. Cost of Providing Transaction 

Records 

The fifth question posed related to the 

most efficient and effective means for 

brokers to provide information, 

automatically and electronically, to 

motor carriers. The Agency asked 

whether each broker should have, for 

example, a stand-alone system with 

motor carriers receiving an email from 

the broker after the contractual service 

has been completed, or whether the 

brokers should 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. The sixth question, related 

to the fifth, was a request for cost 

estimates for implementing an 

information technology (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 motor carriers utilizing any 

of the brokers within the group. 

The majority of the commenters 

agreed that electronic transmission is 

the most efficient means for brokers to 

provide information. However, one 

commenter, MODE Transportation, 

indicated that implementing an 

electronic or IT solution is not required 

to solve the transparency issue and was 

never envisioned when § 371.3 was 

developed. Echo Global Logistics stated 

that much of the information sought 

through broker transparency is already 

publicly available, including rate 

information from aggregators like 

DAT.com and required financial reports 

from publicly-held brokers. Echo Global 

Logistics argued that, given the public 

availability of this information, the cost 

of developing and maintaining an 

electronic reporting system to comply 

with the petitioners’ proposed 

regulations is not justifiable. 

There was disagreement among 

commenters as to whether a proposed 

electronic system should be stand alone 

or a current electronic format(s) which 

the broker may already be using. Some 

commenters mentioned use of existing 

electronic formats, such as email, 

spreadsheets, faxes, which are in 

common use to meet a proposed 

electronic requirement. However, most 

brokers that commented indicated that 

dedicated stand-alone systems such as 

an electronic data interchange (EDI) or 

application programming interface (API) 

are just as likely to be already in use by 

many freight brokers, and these systems 

provide the necessary data privacy and 

security. England Logistics mentioned 

that the data transmitted could 

potentially be trade secrets and 

therefore would require more intensive 

IT systems to protect. 

In terms of cost, most commenters 

indicated that, if the use of a standalone 

system such as EDI or API were 

required, it would have a cost impact on 

those brokers which do not have such 

systems in place already. Both Axle and 

Lange Logistics indicated this cost 

impact may affect small businesses 

more profoundly than others. 

Five commenters directly responded 

to question six and provided a cost 

estimate for brokers to establish an 

electronic system to transmit records. 

Trinity Logistics and Tucker Worldwide 

estimated a cost of $2,500 to $10,000 per 

carrier setup. TIA further provided an 

estimated cost example of a broker that 

utilizes 5,000 motor carriers in their 

database, using their own existing IT 

system (presumably EDI- or API-based), 

would incur a cost of $12.5 million to 

$50 million for implementation. ArcBest 

indicated personnel and equipment 

required to implement the electronic 

information transfer would be $500,000 

per broker. 

FMCSA response: FMCSA is not 

proposing to prescribe a specific type of 

electronic system brokers must use, 

provided the system complies with 49 

CFR 390.32, ‘‘Electronic documents and 

signatures.’’ The Agency finds that the 

requirements listed there are 

appropriate in the context of the broker 

recordkeeping requirements and sees a 

benefit in having a consistent standard 

for electronic documents. FMCSA’s 

experience in reviewing brokers’ records 

shows that most records covered by 

§ 371.3(a), including bills of lading, are 

already kept in electronic format, 

though paper bills of lading may still be 

occasionally used. Thus, the burden on 

parties to keep and transmit transaction 

records electronically is expected to be 

minimal. 

The proposed rule does not include 

an automatic disclosure provision. 

FMCSA believes that the cost estimates 

provided in response to question 6, 

which were related to developing an IT 

solution for automatic disclosure within 

48 hours of the completion of 

contractual obligations, are 

overestimated. Since the rule does not 

include an automatic disclosure 

provision and records would only be 

provided upon request within 48 hours, 

the Agency expects that the costs would 

be significantly lower because brokers’ 

existing systems, either as currently 

implemented or with minor 

modification, could be used to fulfill 

these requirements. However, the 

Agency lacks specific data to quantify 

these costs and is seeking public 

comments on the cost estimates for this 

proposal. 

In response to the comment that much 

of the information brokers would have 

to provide is already publicly available, 

FMCSA notes that information found on 

publicly held brokers’ financial reports 

is not transaction specific. While 

reviewing this information could give 

shippers and motor carriers a general 

sense of the state of the freight brokerage 

industry, it does not provide them with 

information about the loads they have 

consigned or hauled. Rate aggregation 

websites provide pricing information 

that carriers may find useful in deciding 

whether to accept an offer to haul a 

prospective load, but it is also not a 

substitute for broker transparency 

information. In particular, it would not 

provide shipper, carrier, or bill of lading 

information for a particular shipment, 

nor would it provide carriers with any 

information about chargebacks or other 

fees assessed against them in connection 

with a particular delivery. FMCSA 

therefore does not believe relying on 

publicly-available information is an 

adequate substitute for the information 

disclosure proposed in this rule. 

5. Economic Benefits to Motor Carriers 

and Costs to Brokers 

Both rulemaking petitions linked 

broker transparency to concerns over 

carrier revenue and broker margins, and 

the notice requesting public comment 


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sought input on these concerns. 

Margins, as discussed in this proposed 

rulemaking, refer to the division of a 

shipper’s payment between the broker 

and the motor carrier, expressed as a 

percentage. SBTC stated that, in the 

context of the economic impact of the 

COVID–19 national emergency, freight 

rates had dropped drastically, yet 

brokers, in at least a few instances, were 

making large margins on freight. SBTC 

stated that it did not seek regulations 

limiting the amounts or percentages 

brokers earn, but it viewed broker 

transparency as essential to making sure 

market forces operate ethically and 

fairly. The OOIDA petition raised 

similar concerns. The notice asked for 

quantitative estimates of the economic 

benefits that would likely be achieved 

by motor carriers if FMCSA adopted the 

rules requested by OOIDA and SBTC, 

including how much additional revenue 

motor carriers might receive on a pertransaction basis. The notice also sought 

quantitative estimates of the economic 

costs to brokers or others, including 

how much profit reduction on a pertransaction basis brokers would 

experience and what percentage of the 

costs would be passed through to 

shippers or motor carriers. 

Only a few commenters responded to 

these questions. OOIDA estimated that 

the additional revenue a carrier would 

earn in an individual transaction would 

be between tens to thousands of dollars, 

depending on the specifics of the 

transaction. This estimate was preceded 

by a discussion of increased 

convenience and a decrease in unfair 

billing practices, and it is unclear how 

OOIDA’s estimated additional revenue 

was apportioned among the increase in 

convenience, the decrease in unfair 

billing practices, greater negotiating 

power for motor carriers, or other 

factors. Few of the comments from small 

motor carriers contained responsive 

estimates, and several motor carriers 

noted that the current lack of broker 

transparency meant that they do not 

have access to the transaction 

information necessary to provide an 

informed estimate. Brokers commented 

that motor carriers would not receive 

any economic benefit from the proposed 

transparency rulemaking. Brokers 

provided estimates of the cost to comply 

with OOIDA’s proposal based on 

information technology and staffing 

costs but did not provide an estimate of 

the economic impact due to changes to 

freight rates, profit reduction on a pertransaction basis for brokers, or 

percentage of costs that would be passed 

through to shippers or motor carriers. 

Although the Agency received few 

quantitative estimates of the economic 

benefits of broker transparency to motor 

carriers and the economic costs to 

brokers, many comments addressed 

carrier revenue and broker margins. 

Motor carriers commented on the 

prevailing low freight rates at the time 

and provided examples of offers of one 

dollar or less per mile. Motor carriers 

described the impact of these low rates. 

For example, some comments stated 

that the offered rates make it difficult to 

cover motor carriers’ operating 

expenses, including maintaining 

equipment in safe working condition. 

Some comments also described low 

rates as a contributor to undue stress on 

drivers and unsafe operating practices. 

Many comments from motor carriers 

characterized the rates as inequitable 

given the difficulty of the work they do 

and value of the service they provide. 

Many of these comments identified 

brokers as responsible, at least in part, 

for low rates and many characterized 

the brokers’ business practices as 

deceitful. Carriers also say they cannot 

operate a profitable business unless they 

haul brokered loads, and some have 

reported taking brokered loads at a loss, 

citing the need for revenue to service 

business debts. In addition, many motor 

carriers expressed concern that they 

lack negotiating power to exclude 

transparency waiver provisions from 

contracts and, if they exercise their right 

to view the transaction records, brokers 

will select other motor carriers to work 

with and refuse to do business with 

them in the future. 

Many comments from motor carriers 

support the broker transparency 

proposals in the petitions as a remedy 

for the issues they raised. Some 

comments state that increased broker 

transparency would allow motor 

carriers to negotiate higher rates. Many 

comments simply supported broker 

transparency as a means for increasing 

carrier revenue, without describing how 

revenue would increase as a result of 

transparency. Other comments 

suggested modifying the rules requested 

by OOIDA and SBTC to address their 

concerns about low rates more directly, 

including several suggestions to provide 

the broker transparency information 

when the parties are negotiating a rate, 

before the service is provided. Some of 

these comments stated that the 

transparency information would not be 

useful to the carrier after the 

transportation service had been 

provided. 

Some motor carriers did not support 

broker transparency and stated that the 

information is irrelevant to motor 

carriers because the only pricing 

information they need is the offered 

rate. Other commenters proposed a rule 

limiting broker margins to a certain 

percentage of the price paid by the 

shipper. 

Many of the comments from brokers 

challenged the assertions made in the 

petitions and other comments regarding 

freight rates and broker margins. Broker 

commenters also argued that low freight 

rates are not a result of high broker 

margins but rather a result of broad 

market forces, particularly the shortterm acute economic impact of the 

COVID–19 national emergency. They 

disputed claims about price gouging by 

identifying a variety of factors that 

influence the price a broker sets for a 

load. Brokers also explained that their 

contracts with shippers are typically for 

a set period, often one year, while their 

contracts with motor carriers are 

typically shorter, often on a load-byload basis. As a result, the broker’s 

margin for a load covered by the shipper 

contract will fluctuate based on the spot 

market, so that the broker may have a 

higher margin on some loads and a 

lower, sometimes negative, margin on 

other loads. Brokers also explained that 

their margins should not be equated 

with profitability and described the 

various expenses incurred to provide 

brokerage services to shippers. These 

expenses would not be reflected in the 

broker transparency information. 

Many of the comments from brokers 

stated that the rulemaking the petitions 

sought would not have the claimed 

effect of increasing carrier revenue. 

These comments stated that broker 

transparency would not increase freight 

rates. They also stated that load boards 

and other commonly available services 

already provide motor carriers with 

enough information regarding freight 

availability, traffic lanes, market rate 

information, seasonality adjustments, 

and so on to make informed business 

decisions, rendering the records 

available under § 371.3 unnecessary. 

Some comments added that motor 

carriers can decline to take a load if the 

offered rate is too low to be profitable. 

In response, some comments explained 

that motor carriers with leased trucks 

may accept unprofitable loads to secure 

revenue, even as that revenue is not 

profitable. 

Since the comment period closed, 

FMCSA has received further input 

regarding broker transparency. This 

input includes further expressions of 

concern regarding low prevailing freight 

rates, and of the belief that the low 

freight rates are caused, at least in part, 

by high broker margins. There is 

continued interest from motor carriers 

in broker transparency as a solution to 

low prevailing rates. 


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FMCSA response: The purpose of the 

proposed rule is not to provide an 

economic benefit to motor carriers, nor 

to impact broker margins. However, the 

Agency considers the economic impacts 

of the proposed rule as part of its 

mandated regulatory analysis. The 

comments received to date do not 

conclusively establish what the 

economic impact of the proposed rule 

would be. As with the current rule, the 

proposed rule would give shippers and 

carriers the option to access information 

about a brokered freight transaction after 

the parties have negotiated the terms of 

the contract and the transaction is 

complete but would not require 

disclosure prior to that time, nor would 

it require automatic disclosure. The 

information provided would allow the 

carrier to compare the amount that the 

shipper paid the broker to the amount 

that the broker paid the carrier but 

would not set or limit rates or brokers’ 

margins. By clarifying the regulatory 

obligation for brokers to provide the 

transaction records, the proposed rule 

would make the information 

enumerated at § 371.3(a) available to all 

parties participating in a brokered 

freight transaction. 

Although the Agency cannot 

determine, with the currently available 

information, what economic impact the 

proposed rule would have, two main 

theories can be derived from the 

comments. Under one theory, broker 

transparency would not provide an 

economic benefit to motor carriers even 

if such transparency was widespread. 

Motor carriers would not have access to 

the transparency information when 

determining whether to accept a 

brokered load at the broker’s offered 

price or when negotiating the price of a 

load with a broker. The information, 

provided after the fact, would not 

change the price of the load. The 

information may not have an impact on 

the price of future loads for a variety of 

reasons. The carrier may not find the 

information from past transactions 

useful when negotiating prices for 

future loads offered by the same broker 

or loads offered by other brokers. If, 

based on the transparency information, 

the carrier chose not to accept future 

loads from that broker, the carrier might 

not be able to find higher-paying loads 

from other brokers. Relatedly, the broker 

in that scenario may be able to find 

other motor carriers willing to accept 

the load, even if one carrier refuses to 

work with them. 

Under the second theory, broker 

transparency would provide an 

economic benefit to motor carriers if 

such transparency was more widely 

available. The broker transparency 

information might impact the price of 

future loads that the carrier accepts. 

Motor carriers may be able to negotiate 

a higher price if they can apply their 

knowledge from previous loads to 

negotiations for future loads from the 

same broker or future loads with similar 

characteristics. Brokers may have to 

accept the higher price if they cannot 

find other motor carriers. Although the 

transparency information would not be 

publicly available, a broker might 

develop a reputation among motor 

carriers for offering low rates relative to 

the price paid by the shipper. If that 

reputation deterred motor carriers from 

taking loads, the broker may have to 

offer higher rates to place their loads. At 

least one broker highlighted concerns 

that transparency information could 

result in motor carriers directly 

soliciting shippers, bypassing brokers 

for future loads. The ICC considered this 

issue when it adopted the current 

regulations in 1980, emphasizing that 

motor carriers and shippers are free to 

deal directly with each other and 

‘‘[o]nly where the shipper finds that it 

can get better service from the broker 

will it stay with the broker’’ (45 FR 

68941, Oct. 17, 1980). 

There exists a possibility that 

transparency information could reduce 

the exclusive knowledge that brokers 

bring to a transaction if shippers and 

motor carriers collect transparency 

information over time. If the Agency 

were to assume that the broker’s 

exclusive knowledge is considered 

value-added and therefore currently 

captured in broker margins, then 

increased transparency with this 

proposal could result in downward 

pricing pressure on broker margins from 

motor carriers, shippers, or both. 

As discussed in section VI.B.4, above, 

FMCSA does not view the information 

available on load boards or through 

other publicly available sources to be an 

adequate substitute for the transactionspecific information set out in this 

proposed rule. Shippers and motor 

carriers have an interest in knowing 

details about their particular shipments, 

especially when problems with a 

shipment arise or the compensation 

received differs from the contractual 

amount. Broker transparency provides 

the retrospective transaction-specific 

detail on completed loads necessary to 

resolve these issues. By contrast, the 

prevailing rate information available on 

load boards for prospective loads is 

useful for making informed decisions 

about which offers to accept but is not 

useful in addressing issues with 

completed loads. 

From the comments received, the 

Agency cannot determine whether 

either of these theories would prove 

correct under the proposed rule. The 

actual impact may be somewhere in 

between these theories, or both theories 

may be incorrect. If broker transparency 

remained rare under the proposed rule, 

there may not be any economic impact. 

The Agency seeks further comment to 

better estimate the economic impact of 

the proposed rule. 

6. Transparency of Charge Backs, 

Accessorial Fees, and Surcharges 

The broker transparency comments 

brought up several issues not raised in 

the petitions or in the notice. One issue 

was the transparency of charge backs. 

Several comments described 

questionable claims in situations where 

a carrier delivered a load, got a clean 

bill of lading from the receiver, and then 

later had a claim, or ‘‘charge back,’’ on 

the load from the broker despite the 

clean bill of lading. Motor carriers 

contend that these claims often lack 

sufficient explanation or description of 

the reason for the charge back, and the 

motor carriers find it difficult to contest 

them, particularly when their payment 

for transporting the load is withheld 

unless they accede to the claim. In 

situations where the contracts include 

cross-collateralization provisions, 

payment for other loads transported by 

the same carrier for the same broker may 

also be withheld unless the claim is 

accepted. 

Other comments described issues 

with detention charges and fuel 

surcharges, where the rates and 

conditions of the fees that brokers 

charge shippers are different than the 

rates and conditions of payments 

remitted to the carrier, despite the fees 

being premised on the carrier’s 

operating costs. As an example, fees for 

detention time are premised on the 

operating costs of keeping a truck idle 

while waiting to load or unload, costs 

that include the driver’s time. One 

commenter described a situation where 

the broker charged the shipper for 

detention time after the first hour, at a 

rate of $50 per hour, but paid the carrier 

for detention only after 4 hours, and at 

a rate of $35 per hour. Comments from 

motor carriers expressed similar 

concerns regarding fuel surcharges. 

FMCSA response: The practices 

identified in the comments are 

concerning because, depending on their 

prevalence, they may significantly 

disrupt the efficiencies and 

opportunities offered by brokered 

freight transactions. Broker transparency 

seems to be a useful tool in addressing 

these concerns, by providing parties to 

a brokered transaction visibility into the 

associated payments, fees, and charges, 


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8 Dixie Midwest Express, Inc., Extension—General 

Commodities, No. MC–125038 (Sub-No. 24), 132 

M.C.C. 794 (Feb. 3, 1982). 

9See, e.g., Exel, Inc. v. S. Refrigerated Transp., 

Inc., 807 F.3d 140, 148–49 (6th Cir. 2015); Supreme 

Auto Transp., Inc. v. JBL Logistics, LLC, 2017 WL 

4334064, at *4 (D. Colo. Mar. 8, 2017); United Rd. 

Logistics LLC v. Alpha Transportation Grp. LLC, 

2017 WL 1755825, at *2 (E.D. Mich. May 5, 2017). 

See also TransCorr Nat’l Logistics, 2008 WL 

5272895 at *4 and REI Transp., Inc. v. C.H. 

Robinson Worldwide, Inc., 519 F.3d 693, 694 (7th 

Cir. 2008) (both recognizing that brokers are not 

shippers, but allowing for the possibility that a 

broker could step into a shipper’s shoes to assert 

claims against motor carriers). 

10See, e.g., Jackson Rapid Delivery Serv., Inc. v. 

Thomson Consumer Elecs., Inc., 210 F. Supp. 2d 

949, 954 (N.D. Ill. 2001). 

enabling the parties to resolve issues 

and disputes among themselves without 

resorting to costlier remedies. If a claim 

is made against a shipment, the carrier 

should be able to understand the basis 

of the claim, not just to dispute 

questionable claims, and in instances of 

well-founded claims, to take 

precautions with future shipments and 

thereby avoid such claims. On the 

remittance of surcharges, there may be 

a reasonable justification for a broker to 

remit less than the full amount of a 

surcharge received from a shipper to a 

carrier, but the carrier should be able to 

see that difference, particularly when 

the surcharge is premised on the 

carrier’s operating costs. 

In addressing broker transparency, 

FMCSA cannot replace prudent 

business judgment and cannot guarantee 

the trustworthiness of every shipper, 

broker, and carrier. However, the 

brokered freight transportation industry 

requires a certain degree of trust to 

operate efficiently. Trust is eroded when 

motor carriers are prevented from seeing 

the charges and payments associated 

with the service they are providing. In 

addition to creating mistrust, 

unsubstantiated and specious charges 

levied on motor carriers divert resources 

to paying or litigating the charges, that 

could otherwise be spent providing safe 

and efficient transportation. 

7. Confidentiality of Pricing 

Brokers commenting on transparency 

raised concerns about the 

confidentiality of their pricing. Brokers 

stated that shippers require pricing 

confidentiality in their contracts with 

brokers, which is one reason why 

brokers require confidentiality in their 

agreements with motor carriers. In this 

regard, several motor carriers noted that 

the broker-carrier contracts typically 

have confidentiality clauses, which 

would serve to protect shipper pricing 

in the context of greater broker 

transparency. 

Brokers also asserted that their pricing 

can constitute trade secrets, and broker 

transparency requirements would 

conflict with the Defend Trade Secrets 

Act (DTSA) (18 U.S.C. 1831 et seq.). 

Motor carriers commented that DTSA 

doesn’t apply to this situation because 

motor carriers have a right to the 

transaction information under the 

current regulations and, consistent with 

DTSA, the information can still be 

protected from public disclosure 

without waiving the carrier’s right to 

access. Motor carriers argued that a 

broker disclosing to a carrier the 

transactional information to which the 

carrier is authorized to access is not 

equivalent to theft of a trade secret. 

FMCSA response: The Agency 

recognizes that shippers, motor carriers, 

and brokers in a brokered freight 

transaction likely have a compelling 

business interest in protecting 

information about that transaction. The 

broker transparency regulation does not 

require public disclosure, and the 

Agency believes that broker 

transparency is compatible with the 

prudent protection of business 

information. Section 371.3 does not 

require the broker to disclose to the 

carrier all details of the business 

relationship between the broker and 

shipper, but rather only the transactionspecific details enumerated in 

§ 371.3(a). The Agency believes that the 

confidentiality provisions in brokercarrier contracts can provide protection 

consistent with broker transparency. 

The concerns around confidentiality 

must be balanced against the issues that 

broker transparency is meant to remedy, 

as described above. 

Regarding trade secrets, the Agency 

does not believe that § 371.3 in its 

current form, or with the amendments 

proposed, conflicts with trade secret 

protections. The DTSA prohibits 

economic espionage and theft of trade 

secrets, defined as when a person steals, 

receives, buys, possesses, duplicates, 

transmits, or engages in other similar 

activities regarding proprietary 

economic information, or conspires 

with others to do so. Here, the 

information is required to be kept and 

handled in accordance with a Federal 

regulation. Therefore, a broker or carrier 

is legally in possession of such 

information and does not violate the 

DTSA when it handles such information 

pursuant to the regulation. Parties are 

also permitted to include confidentiality 

clauses in their contracts that limit 

further disclosure of such information. 

Moreover, while a pricing formula 

could be a trade secret as a type of 

business information with independent 

economic value, the record of an 

individual transaction covered by 

§ 371.3(a), without more, is not likely to 

be covered as a trade secret. Brokers are 

not required to disclose additional 

information or documentation beyond 

the scope of what is covered in 

§ 371.3(a). Further, § 371.3(c) does not 

require the type of public disclosure 

that would be economically damaging to 

a party. Instead, it only requires that 

brokers give the parties to a transaction 

access to a limited amount of 

information pertaining to that 

transaction. 

8. Applicability of Other Statutes 

Several comments argued that any 

rule preventing the waiver of § 371.3(c) 

would be contrary to 49 U.S.C. 14101. 

Those commenters argue that 49 U.S.C. 

14101 should be interpreted to cover 

brokers and therefore permits brokers to 

include waiver provisions in contracts 

with motor carriers that waive the 

broker’s obligations to the motor carrier 

under § 371.3. In support of this claim, 

several commenters cited the Dixie 

Midwest 8 ICC decision for the 

proposition that a broker is a shipper in 

relation to a carrier. 

FMCSA response: The language of 49 

U.S.C. 14101 refers to shippers and 

motor carriers, not brokers. The Agency 

does not interpret that statute to apply 

to brokers, and the proposed rule 

therefore would not conflict with the 

statute. Motor carriers or shippers 

would not use 49 U.S.C. 14101 to 

contract out of their rights under 

§ 371.3(c), because 49 U.S.C. 14101 is 

premised on a contract between a carrier 

and a shipper, not a brokered freight 

transaction, while § 371.3 is focused 

solely on a brokered freight transaction. 

It is unreasonable to say that a broker 

could rely on 49 U.S.C. 14101, which on 

its face does not apply to brokered 

freight transactions, in order to waive a 

right that applies only to brokered 

freight transactions. 

Regarding the Dixie Midwest decision, 

in that case the ICC was determining 

whether a broker could be considered a 

shipper in the context of supporting an 

application for contract carrier 

authority. That situation has limited 

bearing on the interpretation of 49 

U.S.C. 14101. Most federal courts that 

have addressed the issue of whether 49 

U.S.C. 14101(b) applies to brokers in 

more recent years have held it does 

not.9

The Agency is aware that some courts 

have determined, after a fact-specific 

analysis, that a broker acted as a shipper 

under the particular conditions present 

in those transactions.10 However, the 

Agency does not consider all brokers to 

be shippers in relation to motor carriers 

or for that to be the standard by which 


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broadly applicable regulations are 

formulated. In circumstances where the 

broker does, in fact, act as the shipper, 

49 U.S.C. 14101(b) limits the 

circumstances under which the Agency 

may prohibit waivers in contracts. 

However, the Agency believes that in 

most brokered transactions, the broker is 

not the shipper, and 49 U.S.C. 14101(b) 

does not apply. 

The proposed amendments to 

§ 371.3(c) would also render this 

objection largely moot by clarifying that 

access to records is not a right belonging 

to motor carriers or shippers that can be 

contracted away, but instead is a 

regulatory compliance requirement that 

brokers must meet in order to operate in 

the interstate transportation industry. 

9. Context and Impact of the COVID–19 

National Emergency 

The SBTC rulemaking petition, which 

was filed in May 2020, referred to the 

COVID–19 national emergency and its 

negative impact on freight rates. The 

OOIDA petition, also filed in May 2020, 

noted that freight rates had reached 

historic lows but did not reference the 

COVID–19 national emergency 

specifically. SBTC’s petition raised 

concerns that brokers were taking 

advantage of the situation to obtain high 

margins, and several comments on the 

petitions expressed similar concerns. 

These concerns were not based on 

systematic data, but on personal 

experiences, beliefs, and anecdotes 

about broker margins during that time; 

however, motor carriers also noted the 

difficulty in providing supporting data 

because they rarely obtain information 

about broker margins. Several motor 

carriers made the related point that they 

provided essential transportation 

services during the COVID–19 national 

emergency and should be compensated 

accordingly. 

The comments received from brokers 

disagree with the motor carriers’ claims. 

These comments state that the COVID– 

19 national emergency did not provide 

brokers with high margins; instead, 

brokers claim they experienced the 

same weak freight market and had 

difficulty finding loads to broker. 

Several brokers characterized the 

rulemaking proposed in the petitions as 

a reaction to short-term economic forces 

and opposed the petitions because they 

believed that such a reaction was 

inappropriate. These brokers noted that 

freight rates were already rebounding at 

the time they filed their comments, 

which was later in 2020. Some 

commenters referenced freight market 

indices to support this point. 

Returning to the carrier point of view, 

the OOIDA petition did not directly tie 

its proposed rulemaking to COVID–19 

and stated that ‘‘OOIDA has long 

pushed for greater transparency in 

transactions with brokers.’’ In 2021, at a 

time when the freight market was 

stronger than when the petitions were 

filed, SBTC submitted a letter to DOT 

expressing continued interest in a 

broker transparency rulemaking. As 

described previously, FMCSA held a 

listening session at MATS in March 

2023 on the topic of property brokers. 

During this session the Agency heard 

from several motor carriers expressing 

their support for a broker transparency 

rulemaking. 

FMCSA response: The COVID–19 

national emergency had a drastic 

negative impact on the freight market in 

2020, but the market began to recover 

later that year. Subsequently the market 

has continued to fluctuate, reaching 

notable highs in 2021 and 2022 but 

dropping off significantly in the last few 

years. Though the Agency is aware of 

economic conditions in the industry, 

the proposed rulemaking is not 

intended to address those conditions. 

The circumstances of the COVID–19 

national emergency may have increased 

the interest in broker transparency 

regulation, but the Agency believes the 

proposed rulemaking serves a purpose 

beyond the context of that emergency, a 

conclusion supported by the continued 

engagement of motor carriers on the 

issue of broker transparency. 

10. Automatic Disclosure and 

Retaliation 

The OOIDA petition sought a 

provision making disclosure of the 

records automatic. OOIDA stated the 

automatic disclosure was necessary to 

prevent selective retaliation, i.e., 

blacklisting, against motor carriers who 

exercise their option to review the 

transaction records. The SBTC petition 

did not seek an automatic disclosure 

provision. Many commenters expressed 

the same concern with retaliation as 

OOIDA. 

FMCSA Response: The proposed rule 

does not include an automatic 

disclosure provision. Instead, as in the 

current regulation, parties to the 

transaction would have the ability to 

review the records upon request. The 

Agency believes that an automatic 

disclosure provision is unnecessary at 

this time and could be excessively 

burdensome to brokers. Though the 

concerns regarding retaliation appear 

plausible, the Agency cannot determine 

how frequently retaliation would take 

place or its potential effect on the motor 

carrier transportation industry. The 

Agency seeks further comment on this 

issue. 

C. Issues on Which the Agency Seeks 

Further Comment 

While the Agency invites comment on 

all aspects of the NPRM, we are 

particularly interested in comments that 

address the following issues. In 

addressing topics, FMCSA requests that 

commenters number their remarks to 

correspond with the list below: 

1. What impact, if any, would the 

proposed rule have on freight rates? 

Please provide support for your 

position. 

2. How common is electronic 

recordkeeping among household goods 

brokers? What burden, if any, would be 

imposed if electronic recordkeeping was 

required? 

3. How much time would a broker 

spend creating an electronic record from 

paper documents for the record 

mandated by § 371.3? What would be 

the costs for a broker to create an 

electronic record per transaction? 

4. Do you believe that the 48-hour 

timeframe proposed for § 371.3(c) would 

create a substantial burden for brokers? 

Why or why not? If you disagree with 

the proposed 48-hour timeframe, what 

timeframe would best balance the 

objectives of transparency while 

minimizing the burden on brokers? 

5. If this proposal effectively reduced 

instances of illegal brokering, through 

carrier policing with transparency 

information, would the brokers engaged 

in illegal practices exit the market, 

resulting in the transfer of illicit profits 

to legally operating motor carriers and/ 

or brokers? 

6. Should freight brokers and 

household goods brokers be subject to 

the same recordkeeping requirements 

under § 371.3? If your answer is ‘‘no,’’ 

why should they be subject to different 

requirements? 

7. Should parties requesting records 

under § 371.3(c) be required to submit 

their request in writing? Should parties 

requesting records under § 371.3(c) be 

required to submit their request 

electronically? Would requiring a 

specific format for submitted requests 

impose a cost on the parties or 

otherwise deter requests for 

transparency? Please provide support 

for your position. 

8. Would the proposal that records be 

provided electronically under § 371.3(c) 

make broker transparency more likely, 

as compared to not specifying a method 

of provided the records? Should the 

Agency be more specific in requiring a 

particular format for records provided 

under § 371.3(c), and if so, what method 

and/or format is preferrable? Please 

provide support for your position. 


khammond on DSK9W7S144PROD with PROPOSALS
Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 91661 

VII. Section-by-Section Analysis 

Part 371, entitled, ‘‘Brokers of 

Property,’’ provides requirements for 

entities or individuals brokering the 

transportation of property by authorized 

motor carriers. FMCSA proposes to 

amend §§ 371.2, ‘‘Definitions,’’ and 

371.3, ‘‘Records to be kept by brokers.’’ 

A. Section 371.2 Definitions 

Section 371.2 defines terms used in 

part 371 and includes a definition for 

‘‘non-brokerage service,’’ which is used 

only in § 371.3. FMCSA’s proposed 

amendments to § 371.3 would remove 

the term ‘‘non-brokerage service’’ from 

the section, and FMCSA therefore 

proposes a corresponding amendment to 

§ 371.2 to remove the definition, which 

would no longer be used. 

B. Section 371.3 Records To Be Kept 

by Brokers 

In § 371.3 the Agency proposes 

modernizing the language of the 

regulation by replacing the word ‘‘shall’’ 

with the word ‘‘must.’’ These words 

have the same meaning in the FMCSRs, 

as explained in § 390.7(b). Further, the 

addition of the electronic format in 

accordance with § 390.32(d) has been 

proposed to align with FMCSA’s 

electronic records requirements 

elsewhere in the FMCSRs and to make 

records readily available to all parties. 

Paragraph (a)(4) would be revised to 

include the amount of compensation 

received by the broker for each service 

performed in connection with each 

shipment, including, but not limited to, 

freight charges, surcharges, and 

accessorial fees; the date of payment; 

and the name of the payer, including 

any business aliases, if known. 

Paragraph (a)(5) would be revised to 

require broker records to include any 

penalties assessed in connection with 

each shipment and to delete reference to 

‘‘non-brokerage service.’’ Paragraph 

(a)(6) would be removed, as FMCSA 

proposes incorporating its language into 

paragraph (a)(4). FMCSA proposes 

revising paragraph (b) to replace ‘‘three’’ 

with ‘‘3,’’ to align with the U.S. 

Government Publishing Office 

guidelines on numeral styling, and to 

add ‘‘must’’ to confirm that records are 

required to be kept for 3 years. Finally, 

FMCSA would revise paragraph (c) to 

include the requirement that brokers 

must provide records electronically 

within 48 hours of request to any party 

to the brokered transaction. 

VIII. Regulatory Analyses 

A. Executive Order (E.O.) 12866 

(Regulatory Planning and Review), E.O. 

13563 (Improving Regulation and 

Regulatory Review), E.O. 14094 

(Modernizing Regulatory Review), and 

DOT Regulatory Policies and Procedures 

The Office of Information and 

Regulatory Affairs (OIRA) determined 

that this proposed rule is not a 

significant regulatory action under 

section 3(f) of E.O. 12866 (58 FR 51735, 

Oct. 4, 1993), Regulatory Planning and 

Review, as supplemented by E.O. 13563 

(76 FR 3821, Jan. 21, 2011), Improving 

Regulation and Regulatory Review, and 

amended by E.O. 14094 (88 FR 21879, 

Apr. 11, 2023), Modernizing Regulatory 

Review, and does not require an 

assessment of potential costs and 

benefits under section 6(a)(3) of that 

Order. This rule is also not significant 

within the meaning of DOT Order 

2100.6A, ‘‘Rulemaking and Guidance 

Procedures’’ (June 7, 2021). 

Accordingly, OMB has not reviewed it 

under these Orders. 

1. Need for the Regulation 

This proposal would amend the 

requirements of § 371.3 to further 

improve transparency in brokered 

freight transactions between brokers, 

motor carriers, and shippers. The 

Agency seeks to increase transparency 

and reduce information asymmetry so 

that the freight brokerage market 

operates in a more ethical, fair, and 

efficient manner. Information 

asymmetry is a term describing a 

situation where one or more parties to 

a transaction have additional material 

information on a transaction not 

available to another party. Information 

asymmetry may give brokers a strategic 

advantage in contract negotiations, 

potentially enabling them to secure 

more favorable contractual terms. 

Information asymmetry is generally 

undesirable, and the Agency believes it 

creates inefficient outcomes in brokered 

freight transactions. Based on comments 

to the OOIDA and SBTC petition for 

rulemakings, the Agency understands 

that information asymmetry hinders 

motor carriers in their negotiations with 

brokers. Furthermore, motor carriers 

may not be able effectively to defend 

themselves against potential abuses, 

such as unfounded claims. The OOIDA 

petition argued that the prevalence of 

waiver clauses and instances of 

retaliation by brokers against motor 

carriers seeking to exercise their rights 

under § 371.3(c) undercut the 

transparency envisioned by § 371.3. The 

SBTC petition similarly highlighted the 

issue of waiver clauses and reported 

instances of ‘‘profiteering, price gouging 

and low-balling tactics.’’ 

2. Summary of the Requirements 

As described above, the purpose of 

this NPRM is to reduce information 

asymmetry among parties to brokered 

freight transactions, i.e., brokers, 

shippers, and motor carriers. The NPRM 

proposes to do so by improving 

transparency. To accomplish these 

goals, the Agency proposes the 

following substantive amendments to 

§ 371.3: 

1. Amend § 371.3(a) to require that 

brokers keep the required records in an 

electronic format; 

2. Amend § 371.3(a) to revise the 

required contents of brokers’ records; 

3. Amend § 371.3(c) to clarify that 

brokers must provide records upon 

request; and 

4. Amend § 371.3(c) to require that 

records must be provided electronically 

within 48 hours of request. 

The following analysis provides a 

discussion and overview of the impacts 

likely to result from the proposed 

changes. The analysis discusses the 

effects of these proposed changes 

qualitatively due to the limitations of 

available data, which preclude the 

Agency from making quantitative 

estimates. 

3. Costs 

The Agency provides the following 

cost analysis for each change in the 

proposed rulemaking. 

Brokers Must Keep Records in an 

Electronic Format 

The Agency is aware of brokers 

avoiding meaningful compliance with 

§ 371.3(c) by making the required 

records available for inspection only at 

their principal place of business. The 

Agency believes this behavior may 

allow brokers to avoid their duty to 

provide the § 371.3 transaction records 

to the transacting parties. Brokers are 

already required to maintain a record of 

each transaction under § 371.3. The 

Agency also believes that most, if not 

all, brokers are currently maintaining 

records of their transactions in an 

electronic format, as electronic 

recordkeeping is a standard practice in 

many business transactions. Electronic 

recordkeeping also offers several 

advantages over paper records: 

1. Information can be easily searched 

and retrieved, eliminating the need to 

search through physical documents; 

2. Electronic records are less 

susceptible to loss or damage, as data 

can be backed up to prevent permanent 

data loss; and 


khammond on DSK9W7S144PROD with PROPOSALS
91662 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 

11MCCi. ‘‘The Dollars and Cents of Paper vs. 

Digital.’’ 2024. https://mccinnovations.com/ 

insights/blog/the-cost-of-paper-vs-digital/ 

#:∼:text=Comparing%20%240.0159%20to

%20store%20a,storage

%20costs%2057.6%20times%20more (accessed 

Apr. 25, 2024). 

12 DOL, BLS, Employer Costs for Employee 

Compensation. Mar. 17, 2023. Available at: https:// 

www.bls.gov/news.release/archives/ecec_

03132024.htm (accessed Apr. 22. 2024). Rate is 

calculated by dividing ‘‘wages and salaries’’ by 

‘‘total benefits’’ for the transportation and 

warehousing industry. 

13U.S. Department of Commerce, U.S. Census 

Bureau. Service Annual Survey Historical Data 

(NAICS-basis): 2015. SAS Table 5. Jan. 28, 2016. 

Available at: https://www.census.gov/programssurveys/sas/data/tables.html (accessed Apr. 22, 

2024). 

3. Electronic records offer a 

significant cost advantage over paper 

records. According to a study by MCC 

Innovations, creating and maintaining 

paper records can be up to 141 times 

more expensive compared to electronic 

records.11

Given the advantages of electronic 

recordkeeping, it is likely that brokers 

have already transitioned to electronic 

recordkeeping. Therefore, the Agency 

concludes that this requirement would 

not constitute a burden for most brokers. 

FMCSA recognizes that a small number 

of brokers may still maintain records 

solely in paper format. However, the 

Agency does not know how many 

brokers do not have records of their 

transactions in an electronic format, nor 

the number of transactions those brokers 

conduct relative to the overall number 

of broker transactions and is therefore 

unable to quantify a total cost for this 

proposal. 

The Agency has instead attempted to 

quantify the cost of creating an 

electronic copy of a record on a per 

transaction basis. FMCSA believes that 

brokers who are not creating electronic 

versions of their transaction records 

currently have access to the technology 

needed to do so (e.g., document 

scanners, digital cameras, document 

management software, etc.). FMCSA 

anticipates that these tasks can be 

completed by an office clerk in 5 

minutes per transaction as these records 

are currently stored by transaction and 

should be easily accessible to the 

broker. The Agency is reinforced in this 

belief based on comments submitted in 

response to the OOIDA and SBTC 

petition for this rulemaking but requests 

further comment from the public on this 

assumption. 

The burden hours associated with this 

task are monetized using an hourly 

wage for an office clerk adjusted for 

fringe benefits and broker overhead. The 

Bureau of Labor Statistics (BLS) median 

wage for an office clerk is $19.46 (SOC 

43–9061). The hourly wage is increased 

by fringe benefits and broker overhead, 

which results in a $32.93 wage ($32.93 

= $19.46 + ($19.46 × 48.2%) + ($19.46 

× 21%)). The fringe benefits rate used 

was 48.2 percent 12 and relies on data 

published by BLS. Overhead costs are 

business expenses that are not directly 

tied to the production of goods or 

services. These may include rent for 

office space, payroll administration 

costs, and employee training costs. 

FMCSA relies on publicly available 

Service Annual Survey (SAS) data from 

the Census Bureau in the truck 

transportation industry (subsector 484) 

and transit and ground passenger 

transportation industry (subsector 485) 

to estimate a composite overhead rate.13

After reviewing SAS data from 2013 

through 2021, FMCSA found 2015 to be 

the most appropriate baseline from 

which to estimate industry overhead 

rates because it is the most complete 

year of pre-COVID data. FMCSA first 

summed the seven overhead expense 

categories most focused on firm fixed 

price expenses for both subsectors 485 

and 484 including (1) expensed 

purchases of software, (2) data 

processing and other purchased 

computer services, (3) purchased repairs 

and maintenance to buildings, 

structures, and offices, (4) lease and 

rental payments for land, buildings, 

structures, store spaces, and offices, (5) 

purchased advertising and promotional 

services, (6) purchased professional and 

technical services, (7) cost of insurance, 

and then divided the sum of the 

overhead expense categories by gross 

annual payroll to calculate an average 

industry overhead rate of 21 percent (21 

percent = $16 billion ÷ $75 billion) for 

use in this analysis. 

FMCSA estimates a $2.75 cost per 

record to create an electronic copy of a 

transaction record. As stated above, 

FMCSA finds it is likely that brokers 

have already transitioned to electronic 

recordkeeping, which would mitigate 

the impact of the potential burden. The 

Agency has no data that would allow it 

to quantify the overall size of the 

additional burden. 

TABLE 1—WAGE, TIME, AND LABOR COSTS

[In 2023] 

Occupation 

BLS 

occupation 

code 

NAICS 

occupational 

designation 

Median 

base wage 

Fringe 

benefits 

rate 

(%) 

Overhead 

rate 

(%) 

Median 

base wage 

+ fringe 

benefits + 

overhead 

Office Clerks, General 1 .............................................. 43–9061 Cross-industry ....... $19.46 48.2 21 $33 

FMCSA estimates that an office clerk could spend up to 5 minutes per document to create an electronic copy of that transaction record, at an 

hourly wage rate of $33. Therefore, the cost to create an electronic copy of each document would be up to $2.75 (5 ÷ 60 × $33) per record. 

Note: Industry wage with benefits and overhead is hourly and has been rounded to the nearest dollar. 1 DOL, BLS. Occupational Employment and Wage Statistics (OEWS). National. May 2023. 43–9061 Office Clerks, General. Available at:

https://www.bls.gov/oes/current/oes439061.htm (accessed Apr. 18, 2024). 

Revisions to the Required Contents of 

Brokers’ Records 

The Agency proposes updating the 

content of records under § 371.3(a) to 

include the date of payment for 

brokered services. The Agency believes 

this proposal would impose a minimal 

burden as most brokers likely already 

retain payment dates for brokered 

services as part of their standard 

transaction and accounting processes. 

Under this proposal, brokers would be 

required to update the contents of 

records kept under § 371.3 to include 

dates of payment. While the Agency 

cannot quantify the cost impact to 

include payment dates in records kept 

under § 371.3, due to the limitations of 

available data, FMCSA expects it would 

be de minimis due to the minor 

adjustments that would be required to 

comply with this proposal, as discussed 

previously. FMCSA proposes this 

requirement in response to comments 

both to the OOIDA and SBTC petitions 

and to an FMCSA Broker Listening 

Session at MATS in March 2023, where 


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 91663 

14Plain Writing Act of 2020. GovInfo.gov. Oct. 

2020. Available at: https://www.govinfo.gov/ 

content/pkg/PLAW-111publ274/html/PLAW111publ274.htm (accessed May 24, 2024). 

15U.S. Census Bureau. Impact of COVID–19 on 

Passenger and Freight Transportation (census.gov). 

Sept. 2023. Available at: https://www.census.gov/ 

library/stories/2023/09/air-transportationpandemic-impact.html (accessed Apr. 18, 2024). 

16Fisher, Josh. ‘‘Truckload driver wages up 18% 

over past two years.’’ Fleet Owner. Aug. 2022. 

Continued 

multiple commenters discussed charge 

backs and claims after loads were 

delivered. The Agency believes the 

inclusion of a date of payment would 

provide additional information to motor 

carriers that they may use to counter 

any inaccurate claims. For example, 

date of payment information may aid a 

carrier to establish a timeline of events, 

such as payments to the broker by the 

shipper, and possibly aid in rectifying 

discrepancies and spurious charge backs 

with brokered freight contracts. The 

Agency lacks data to quantify the 

amount of fraudulent or inaccurate 

charge backs imposed on motor carriers 

but concludes that there would be some 

cost savings for motor carriers if they are 

able more readily to contest these 

charges with the increased transparency 

information. 

The Agency also proposes to 

eliminate the distinction between 

brokerage services and non-brokerage 

services in § 371.3(a) by removing 

paragraph (5) and revising paragraph 

(4). The rationale for the distinction was 

initially set out in the brokers of 

property rule promulgated by the ICC in 

1949, as detailed earlier in this NPRM 

in section V.A. History of Property 

Broker Regulations. In the past, the ICC 

attempted to regulate broker fees by 

setting a cap, but this relied on 

differentiating between brokerage and 

non-brokerage services. However, the 

broker fee cap was never adopted. With 

the current focus on transparency in 

broker transactions, the distinction 

between these service types is no longer 

necessary. The Agency, therefore, 

proposes to require that the records 

contain all charges and payments 

connected to the shipment. This 

proposed change is consistent with the 

obligation imposed on federal agencies 

by the Plain Writing Act of 2010. This 

law requires that federal agencies use, 

‘‘clear Government communication that 

the public can understand and use.’’ 14

As this proposed amendment does not 

change the contents of records under 

§ 371.3, the Agency finds that there 

would be no economic impact 

associated with the modernization of 

this language. 

Brokers Must Provide Records Upon 

Request 

FMCSA is proposing to amend the 

language of § 371.3(c) to state that 

brokers have an obligation to disclose 

records within 48 hours of request. The 

prevalence of waivers may be reduced 

through the framing of this regulatory 

obligation. Broker transparency is 

intended as a mechanism to allow 

parties to a brokered freight transaction 

to self-police the performance of the 

transaction. A free market in the 

brokered freight industry would 

represent a scenario where the demand, 

supply, and prices of brokered 

transportation of property are 

determined by the parties to these 

brokered transactions, i.e., shippers, 

brokers, and motor carriers. However, 

free markets require transparency to 

operate efficiently. When parties to a 

brokered transaction have unequal 

access to relevant information, known 

as information asymmetry, that could 

lead to an inefficient allocation of 

resources and therefore a sub-optimal 

outcome for society. Since waivers of 

§ 371.3 inhibit the sharing of 

information in brokered freight 

transactions, these waivers may create 

some degree of market failure or 

inefficiency. 

A party to a brokered transaction may 

seek records under § 371.3(c) for various 

reasons, including, but not limited to 

the following: 

• Motor carriers may seek transaction 

records in furtherance of a remedy 

against potential charge back abuses or 

other erroneous charges on completed 

loads. For example, if the broker made 

a concession to the owner of a brokered 

load and attempted to recapture these 

funds from the carrier, this could be 

verified by the carrier through 

transaction records requested under 

§ 371.3. It is evident from the comments 

received that some motor carriers 

believe spurious charge backs can be 

identified if motor carriers have access 

to transparency information. 

• Shippers may use transaction 

records to verify that the services that 

they were billed for by the broker were 

provided. This can help to prevent fraud 

or errors in billing. 

• Motor carriers and shippers may 

seek transparency on broker margins. 

Although a party to a brokered contract 

would have access to transaction 

records under § 371.3 only after the 

contractual service has been completed, 

carrier and shippers could use this 

information determine whether the 

margins are commensurate with the 

service provided, and potentially to 

negotiate for better rates or turn to other 

brokers for future loads. If many motor 

carriers and shippers were to make a 

similar decision, some brokers might 

find it difficult to contract out loads and 

therefore would face pressure to offer 

better rates and therefore improved 

margins for motor carriers. 

• Motor carriers and shippers may 

use transaction information to identify 

instances where loads have been 

brokered without authority and to report 

such instances to FMCSA. 

• Motor carriers believe less time 

would be spent resolving disputes if 

transaction information is readily 

available. Several reports submitted to 

FMCSA indicate that motor carriers 

have spent considerable time seeking 

such information or resolving issues 

stemming from its absence. 

FMCSA does not regulate freight rates 

or broker margins. The proposed rule 

would reframe the existing regulation 

that requires the broker to provide a 

record of the transaction to the motor 

carrier on request after the transaction is 

complete, but it would not regulate rates 

or margins. The Agency believes that 

this transparency could have some 

impact on rates and margins, and the 

current prevalence of waivers suggests 

that brokers likely derive some benefit 

from not providing transaction records 

to motor carriers. However, the Agency 

also believes that the proposed rule may 

have only a minimal impact on rates 

and margins, and other factors may still 

predominate in the setting of rates and 

margins. The possibility of a minimal 

impact is supported by the wide 

availability of rate information and the 

fact that carriers would only receive the 

transparency information after a 

transaction is completed, i.e., after the 

rate is negotiated. Due to the limitations 

of available data, FMCSA cannot judge 

the likely impact and the Agency seeks 

further information to determine the 

degree of impact. 

To gain a clearer understanding of the 

impact of clarifying brokers’ obligations 

to provide records under § 371.3, the 

Agency examined market conditions in 

the freight brokerage industry over the 

past few years. According to data from 

the U.S. Census Bureau, revenues for 

freight brokers increased, in aggregate, 

from 2019 to 2021.15 While the Census 

Bureau data shows a decrease in motor 

carrier revenues from 2019 to 2020, it 

also shows a rebound in motor carrier’s 

revenue in 2021. Truck driver wages 

also showed continuous growth during 

2019 to 2021. A study conducted by the 

American Trucking Associations also 

shows average wage increased for truck 

drivers by 18% between 2019 and 

2021.16 The COVID–19 emergency also 


khammond on DSK9W7S144PROD with PROPOSALS
91664 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 

Available at: https://www.fleetowner.com/ 

operations/article/21248550/truckload-driverwages-up-18-over-past-two-years (accessed May 7, 

2024). 

17 ‘‘Study details COVID–19’s impact on trucking 

industry.’’ The Trucker. Dec. 2021. https://

www.thetrucker.com/trucking-news/the-nation/ 

study-details-covid-19s-impact-on-trucking-industry 

(accessed Apr. 18, 2024). 

18Spot Market Insights. Truckstop. Available at: 

https://truckstop.com/product/spot-marketinsights/ (accessed Apr. 18, 2024). 

19Lockie, Alex. ‘‘How much money are brokers 

really making from owner-operator’s hauls?’’ 

Overdrive Online. Feb. 16, 2024. Available at: 

https://www.overdriveonline.com/business/article/ 

15661579/how-much-money-are-freight-brokersreally-making-from-truckers (accessed Apr. 18, 

2024). 

resulted in reduced costs for motor 

carriers. According to a report published 

by The Trucker, motor carriers 

benefitted from reduced costs in fuel 

and increased fuel economy due to 

lower traffic levels. Motor carriers’ 

marginal operating costs per mile 

correspondingly decreased by 

approximately 5 cents.17 These cost 

savings would have helped to offset the 

reduction in revenues for the industry 

during the COVID–19 national 

emergency. 

The number of brokers with operating 

authority grew by 20.90 percent from 

2020 to 2021. Similarly, the number of 

motor carriers with operating authority 

grew by 18.81 percent from 2020 to 

2021. Public industry data shows that 

rates for brokered freight loads 

rebounded from their COVID–19 

downturn in late 2020 and peaked in 

2022.18 Figure 1 provides a visual 

display of the relative change in 

brokered freight rates over time. The 

Agency finds that the rapid entry of new 

motor carriers into the market during 

2022 was driven by a surge in freight 

demand beginning in 2021, with new 

brokers and motor carriers intending to 

capitalize on unprecedented market 

conditions. These conditions included 

government subsidies such as the 

COVID–19 economic impact payments, 

the Paycheck Protection Program (PPP), 

lower marginal costs and relatively high 

rates for trucking loads as seen in Figure 

1. 

By 2023, however, as a market 

correction emerged, brokers and motor 

carriers began leaving the market. As the 

initial pandemic response waned, 

demand began to normalize which led 

to an oversupply of capacity and 

subsequent broker and carrier exits. 

Freight rates also came down from their 

2022 peak. Such rapid expansion, as 

seen in 2021, was unlikely to be 

sustainable, and a natural correction 

towards a new equilibrium was 

anticipated. However, the Agency finds 

that the average rate for a brokered load 

and the total number of motor carriers 

and brokers holding active authority 

remain at levels higher than their prepandemic numbers, indicative of a 

freight industry more robust than when 

OOIDA and SBTC submitted their 

petitions. This, combined with a study 

published in January 2024, indicating 

average broker margins of 

approximately 13.47 percent to 15.4 

percent, depending on the configuration 

of the truck, suggests a period of 

favorable margins for both brokers and 

motor carriers.19

In conclusion, analysis of available 

data suggests that brokerage margins 

generally align with the self-reported 

industry averages of approximately 15 

percent. The Agency posits that isolated 

instances of higher margins are not 

indicative of broader trends within the 

industry. Instead, the Agency maintains 

that pricing trends in the brokerage 

industry are tied to market factors. 

BILLING CODE 4910–EX–P 

BILLING CODE 4910–EX–C 


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Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 91665 

20Freight Brokerage Market Size & Share, Growth 

Trends. Global Market Insights (GMI). Feb. 2024. 

Available at: https://www.gminsights.com/industryanalysis/freight-brokerage-market (accessed May 

10, 2024). 

21 2017 Economic Census. Table 

EC1700SIZEREVFIRM—Selected Sectors: Sales, 

Value of Shipments, or Revenue Size of Firms for 

the U.S.: 2017. U.S. Census Bureau. Available at: 

https://data.census.gov/table/ECNSIZE2017.

EC1700SIZEREVFIRM?t=

Receipt%20Size&n=488510 (accessed Apr. 18, 

2024). 

22 Global News Wire. ‘‘United States Freight 

Brokerage Market Revenues to Reach USD 24.75 

billion by 2028.’’ Mordor Intelligence. July 2023. 

Available at: https://www.globenewswire.com/en/ 

news-release/2023/07/06/2700461/0/en/UnitedStates-Freight-Brokerage-Market-Revenues-toReach-USD-24-75-billion-by-2028-Market-SizeShare-Forecasts-Trends-Analysis-Report-byMordor-Intelligence.html (accessed Apr. 18, 2024). 

23 $200 million ÷ $11.6 billion = 1.7%. 

24 $200 million ÷ $65 billion = 0.3%. 

TABLE 2—YEAR-OVER-YEAR CHANGES OF ACTIVE BROKERS AND MOTOR CARRIERS 1

Year Total brokers 

registered 

Total brokers 

percentage change 

Total motor carriers 

registered 

Carrier percentage 

change 

2015 ........................................................................... 16,745 .................................. 551,150

2016 ........................................................................... 17,764 6.09 524,058 ¥4.92 

2017 ........................................................................... 18,637 4.91 543,061 3.63 

2018 ........................................................................... 20,154 8.14 586,720 8.04 

2019 ........................................................................... 21,770 8.02 602,542 2.70 

2020 ........................................................................... 24,138 10.88 637,721 5.84 

2021 ........................................................................... 29,184 20.90 757,652 18.81 

2022 ........................................................................... 31,885 9.26 813,844 7.42 

2023 ........................................................................... 28,773 ¥9.76 787,189 ¥3.28 

1Pocket Guide to Large Truck and Bus Statistics, FMCSA. Available at: https://www.fmcsa.dot.gov/safety/data-and-statistics/commercial-motorvehicle-facts (accessed Jun. 10, 2024). Data for each year is captured at year end. 

FMCSA understands that several 

factors influence freight brokerage 

pricing including, but not limited to: 

1. Costs of fulfilling contractual 

obligations e.g., fuel, labor, depreciation 

of equipment, licensing, insurance, 

taxes; 

2. Market rate information; 

3. Demand by motor carriers for 

brokered loads; 

4. The supply of brokered load 

contracts on the market; 

5. Seasonal demand, i.e., the changes 

in demand for brokered loads 

depending on the time of year; 

6. Type of commodity; and 

7. Existing economic conditions, e.g., 

COVID–19 national emergency, 

recession. 

The Agency believes that these 

factors, rather than the availability of 

additional information concerning 

broker margins, are likely dominant for 

pricing brokered loads. Through 

comments submitted by industry 

stakeholders, FMCSA understands that 

broker records would be of limited 

utility in negotiating contracts due to 

the effect of the pricing factors listed 

above, as such records are provided 

only upon request and after the 

completion of the contractual 

obligations. Therefore, the records may 

only be useful for negotiating pricing for 

future loads. However, a broker may 

refuse such negotiations by claiming 

that all the pricing factors for the load 

are not the same. 

Any shift in pricing in the brokered 

freight industry would take the form of 

transfers. A transfer in this context 

would be a shift in revenue from one 

party to another, specifically from 

brokers to motor carriers. FMCSA 

cannot predict the magnitude or 

frequency of any transfers between 

parties to brokered transactions but 

believes transfers could occur because 

of this proposed rule. 

The Agency is unable to 

quantitatively estimate the magnitude or 

frequency of any transfers due to lack of 

data on: 

1. How many transactions under 

§ 371.3 are waived; 

2. The number of transactions in the 

brokered freight industry; 

3. The margins of brokers and motor 

carriers throughout the industry; and 

4. The degree to which those margins 

are impacted by waivers to the current 

regulation. 

The Agency believes transfers may 

occur based on the following factors: 

1. A significant number of motor 

carriers have said they intend to use 

transparency information to negotiate 

for better rates. However, as discussed 

previously, FMCSA believes the content 

of records under § 371.3 would be of 

limited utility in negotiating rates; 

2. Brokers who currently use § 371.3 

waivers may relinquish some degree of 

competitive advantage if the proposed 

rule is effective at reducing the 

frequency at which these brokers use 

waivers to the regulation. If brokers 

currently price the value of this 

competitive advantage into their 

brokerage contracts, their ability to 

maintain current margins could be 

weakened; and 

3. If this proposal were to effectively 

reduce the prevalence of waivers then 

carriers may be better able to detect 

unauthorized brokering by examining 

transparency data to identify the parties 

involved in the brokered transaction. 

Carriers could then report suspected 

unauthorized brokering to FMCSA for 

enforcement action. If these measures 

successfully reduce unauthorized 

brokering, then those profits could 

potentially be redirected to motor 

carriers and brokers with the 

appropriate authority. 

FMCSA also acknowledges that 

transfers need not be large, as a 

percentage of total industry revenue, to 

meet the economically significant 

threshold of $200 million, under E.O. 

14094. The Agency estimates the actual 

revenues specific to the broker entities 

subject to this regulation range from 

$11.6 billion 20 to $65 billion 21 per year. 

Additional revenue estimates for the 

entire industry also include $16.58 

billion.22 The Agency has no industry 

revenue information specific to brokers 

that would be impacted by this 

rulemaking. Due to limitations in 

available data, it is not possible to 

isolate revenue estimates specifically for 

brokers subject to this proposed 

rulemaking. Since these brokers 

represent a subset of the overall U.S. 

brokerage industry, their revenue is 

unlikely to be at the upper end of this 

range. 

The maximum percentage of transfers 

that could occur in response to this 

rulemaking without reaching the 

economically significant threshold of 

$200 million of impacts in any 1 year 

ranges from 1.7 percent 23 to 0.3 

percent.24 As discussed, the Agency 

believes the economic threshold for 

significance is likely closer to 1.7 

percent than to 0.3 percent, as the 

broker entities subject to this regulation 

represent a subset of the total number of 

transportation brokers operating in the 

United States. The Agency requests 

comment on the frequency and 


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25Complaint reported to FMCSA’s National 

Consumer Complaint Database in January 2022. 

magnitude of transfers that may occur as 

a result of this rulemaking and invites 

all interested parties to submit relevant 

data and information. 

It is important to note that any shift 

away from the current practice of 

including waivers of § 371.3(c) may 

present economic disadvantages to 

brokers. The Agency acknowledges 

England Logistics’ comment that 

inappropriate solicitation of freight to 

owners of brokered loads presents a 

business risk to them. The Agency 

recognizes that a broker’s role extends 

beyond matching shippers with motor 

carriers. Brokers act as an extension of 

the shipper’s team, managing and 

overseeing cargo transportation with the 

carrier and handling varying 

documentation. The Agency does not 

believe that this proposal would 

materially alter the value proposition 

offered by brokers to shippers or make 

brokers less competitive as compared to 

working directly with motor carriers. 

Although the proposed rule clarifies 

that brokers have a regulatory obligation 

to disclose records upon request, it does 

not prevent them from including 

confidentiality clauses in their contracts 

with motor carriers or shippers. 

The proposed amendments to 

paragraph (c) would not impose any 

duty on motor carriers. They clarify that 

the broker has a duty to provide records 

to the motor carrier upon request, as 

intended by the current regulation, but 

the motor carrier is not obligated to 

request the records. The Agency does 

not believe that the proposed 

amendments will impose a cost on 

motor carriers. 

Records Must Be Provided Within 48 

Hours of Request 

The current regulation lacks a defined 

timeframe within which brokers must 

fulfill information requests. The Agency 

has received reports of motor carriers 

experiencing lengthy delays in 

obtaining required information from 

brokers. The Agency has heard from at 

least one carrier claiming that a broker 

asserted that § 371.3, ‘‘does not state 

how long they have, to comply with that 

request and we can wait 10 years before 

we give you those records.’’ 25 A defined 

48-hour compliance period for brokers 

to respond to transparency requests 

under § 371.3 would directly address 

industry stakeholder concerns about 

excessive delays. 

The Agency acknowledges that the 

requirement for broker records to be 

provided within 48 hours may present 

some costs for brokers. Brokers may 

need to restructure their processes, 

invest in IT systems, or develop new IT 

systems altogether to meet this 

requirement. Through comments to the 

OOIDA and SBTC petitions, the Agency 

understands that not every broker may 

have pertinent transaction records in the 

same database, filing system, or 

transport management system. 

Under this proposal, brokers would 

not be required to produce or create new 

information. However, some brokers 

may need to increase total available 

staffing hours or invest in technology 

upgrades to meet the 48-hour timeframe. 

The Agency lacks data to estimate these 

costs. 

The Agency believes that most, if not 

all, brokers are complying with the 

current regulation to maintain a record 

of each transaction in accordance with 

§ 371.3. The Agency is unable to 

quantify the costs to brokers of 

providing transparency information 

within 48 hours due to limited available 

data on: 

1. The total number of transactions 

processed by brokers that would be 

subject to the proposed regulation in 

any given time; 

2. The anticipated volume of requests 

for transaction-specific information 

under § 371.3; and 

3. The technological readiness of 

brokers to fulfill these requests within 

the proposed 48-hour timeframe. 

However, the Agency believes that 

some of these costs could be minimally 

offset by cost savings from having to 

respond to repeated inquiries from 

motor carriers for the content of records 

under § 371.3. The Agency 

acknowledges that currently motor 

carriers may, in some instances, submit 

repeated requests for records under 

§ 371.3, extending over long periods, 

potentially lasting months. A defined 

48-hour compliance period for brokers 

to respond to transparency requests 

under § 371.3 would directly address 

delays in receiving transparency 

information and therefore mitigate the 

need for repeated inquiries. 

4. Benefits 

The primary purpose of this proposed 

rule is to modernize FMCSA’s existing 

recordkeeping requirements and 

transparency provisions for brokers and 

clarify the obligation imposed on 

brokers to respond to requests for 

transaction records and the process 

parties must follow when requesting 

and supplying such records. The 

electronic recordkeeping requirement 

would offer several advantages over 

paper records. Information can be easily 

searched and retrieved, eliminating the 

need to search through physical 

documents. Electronic records are also 

less susceptible to loss or damage, as 

data can be backed up to prevent 

permanent data loss. A lack of 

transparency in freight brokerage 

contracts has been linked to excessive 

and inappropriate charge backs by 

brokers. Motor carriers argue that access 

to broker information mandated by 

§ 371.3 is essential for them to 

effectively challenge or even verify the 

legitimacy of charge backs. Without this 

information, they claim their ability to 

defend themselves against potentially 

inaccurate charges is significantly 

hampered. 

The Agency believes the inclusion of 

the date of payments with the contents 

of records would provide additional 

information a carrier may use to counter 

any inaccurate claims, or spurious 

charge backs. The intent of the current 

regulations in § 371.3 is, in part, to 

enable self-policing of freight-brokered 

contracts in the absence of more 

restrictive regulation. The proposed rule 

would help improve self-policing of 

freight-brokered contracts on issues 

such as charge back abuses and 

unauthorized brokering. 

Some motor carriers allege that broker 

information would enable them to 

negotiate for better rates. The Agency 

has not been able to determine the 

frequency or magnitude of any possible 

transfers resulting from this rulemaking 

but acknowledges that motor carriers 

and shippers may be able to negotiate 

better rates over time using such 

information due to a decrease in the 

information asymmetry present in the 

brokerage industry. Any resulting shift 

in revenues between the entities that 

would be subject to this rulemaking 

would take the form of transfers. 

Transfers are not considered to be 

economic benefits or costs at the 

societal level. 

The Agency believes that broker 

information would offer limited utility 

in securing more favorable rates. This 

belief is based on a few key 

considerations. First, the pricing of 

brokered contracts is primarily driven 

by prevailing market forces. Factors 

such as the overall economic climate, 

supply and demand dynamics within 

the brokerage industry, and other 

relevant market conditions, as discussed 

in Section VIII.A.3. Costs, exert a great 

influence on brokered contract pricing. 

Second, the information itself would 

become available only after the 

contractual obligations have been 

fulfilled. Because brokered contracts are 

highly specific, with variation in terms, 

length, and conditions, information on 

past contracts would be only minimally 

applicable for direct comparison in 


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26Public Law 104–121, 110 Stat. 857, (Mar. 29, 

1996). 

27U.S. Census Bureau. 2017 Economic Census. 

Table EC1700SIZEEMPFIRM—Selected Sectors: 

Employment Size of Firms for the U.S.: 2017. 

Available at: https://www.census.gov/data/tables/ 

2017/econ/economic-census/naics-sector-48- 

49.html (accessed Feb. 3, 2023). 

28U.S. Census Bureau. Disclosure: Cell 

Suppression. Available at: https://www.census.gov/ 

programs-surveys/economic-census/technicaldocumentation/methodology/disclosure.html 

(accessed Jun. 14, 2024). 

29U.S. Census Bureau. 2012 Economic Census. 

Table EC1248SSSZ4—Transportation and 

Warehousing: Subject Series—Estab & Firm Size: 

Summary Statistics by Revenue Size of Firms for the 

U.S.: 2012. Available at: https://www.census.gov/ 

data/tables/2012/econ/census/transportationwarehousing.html (accessed Feb. 3, 2023). 

future contract negotiations. However, 

the reduction in information asymmetry 

due to increased transparency should 

enable a more efficient market by 

reducing charge back abuses. 

5. Alternatives Considered 

The Agency explored alternative 

approaches, such as a phased 

implementation, automatic disclosure of 

the content of records under § 371.3, 

prohibiting waivers, and a longer 

timeframe for providing transparency 

information than the proposed 48 hours. 

FMCSA decided against these 

alternative approaches. The Agency 

finds that a phased implementation 

would not reduce potential burdens 

imposed by this proposed rule for the 

following reasons: 

1. Brokers are already obligated to 

maintain records under § 371.3. 

Therefore, they possess the information 

necessary to comply with the proposed 

48-hour turnaround for information 

requests; 

2. The Agency believes that most 

brokers are maintaining a record of their 

transactions in an electronic format; and 

3. Brokers likely capture the date of 

payment for brokered services as part of 

their standard transaction and 

accounting processes. 

The OOIDA petition sought a 

provision making disclosure of the 

records automatic. OOIDA stated the 

automatic disclosure was necessary to 

prevent selective retaliation, i.e., 

blacklisting, against motor carriers that 

exercise their right to review the 

transaction records. The proposed rule 

does not include an automatic 

disclosure provision; instead, parties to 

the transaction would continue to have 

the ability to review the records upon 

request. The Agency believes that an 

automatic disclosure provision would 

be excessively burdensome to brokers. 

Though the concerns regarding 

retaliation appear plausible, the Agency 

cannot determine how frequently that 

retaliation would take place. This is, in 

part, because motor carriers have 

frequently waived their right to review, 

which makes it difficult for the Agency 

to determine if retaliation would be a 

common problem if the proposed 

regulation is implemented. 

Automatic disclosure would provide 

the content of records under § 371.3 to 

all motor carriers, but many motor 

carriers may choose not to utilize this 

information. A request-based system 

ensures that motor carriers who value 

access to the content of records under 

§ 371.3 receive it, while minimizing the 

burden for brokers who, under an 

automatic disclosure requirement, 

would need to distribute the content of 

records to all parties, whether or not 

they wanted to receive it. The Agency 

is unable to develop quantitative cost 

estimate comparisons for this alternative 

due to lack of data on the number of 

transactions per broker, how many of 

these transactions include waiver 

clauses, and how many parties request 

access to the content of records under 

§ 371.3. 

As previously discussed, FMCSA 

considered whether to include an 

explicit ban on waivers, as suggested by 

SBTC and OOIDA, in the regulation and 

decided against it. 

The proposed timeframe of 48 hours 

to provide requested records would 

benefit motor carriers by ensuring 

timely access to information and would 

produce cost savings for brokers by 

reducing the frequency at which brokers 

would need to respond to or consider 

repeated inquiries under § 371.3. A 

longer timeframe than 48 hours would 

diminish these cost savings. The Agency 

views 48 hours as a balanced approach, 

promoting both industry efficiency and 

manageable burdens for brokers. The 

Agency seeks comment on the 48-hour 

proposed timeframe to provide 

requested records. 

B. Advance Notice of Proposed 

Rulemaking 

Under 49 U.S.C. 31136(g), FMCSA is 

required to publish an advance notice of 

proposed rulemaking (ANPRM) or 

proceed with a negotiated rulemaking if 

a proposed safety rule ‘‘under this part’’ 

is likely to lead to the promulgation of 

a major rule. ‘‘This part’’ is Part B of 

Subtitle VI of Title 49, United States 

Code, i.e., 49 U.S.C. chapters 311–317. 

The statutory authority for this rule, 

however, is derived from the Agency’s 

commercial authorities in Part B of 

Subtitle IV of Title 49, United States 

Code, i.e., 49 U.S.C. chapters 131–149. 

Therefore, the Agency is not required to 

publish an ANPRM or proceed with a 

negotiated rulemaking. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.), as amended by the 

Small Business Regulatory Enforcement 

Fairness Act of 1996,26 requires Federal 

agencies to consider the effects of the 

regulatory action on small business and 

other small entities and to minimize any 

significant economic impact. The term 

small entities comprises small 

businesses and not-for-profit 

organizations that are independently 

owned and operated and are not 

dominant in their fields, and 

governmental jurisdictions with 

populations of less than 50,000 (5 U.S.C. 

601(6)). Accordingly, DOT policy 

requires an analysis of the impact of all 

regulations on small entities, and 

mandates that agencies strive to lessen 

any adverse effects on these businesses. 

Affected Small Entities 

This rule has the potential to impact 

shippers, brokers, and motor carriers. 

The Small Business Administration’s 

(SBA) size standard for a small entity 

(13 CFR 121.201) differs by industry 

code. The entities affected by this rule 

fall into many different industry codes. 

In order to determine the number of 

affected small entities, FMCSA 

examined the 2012 and 2017 Economic 

Census data for two different North 

American Industry Classification 

System (NAICS) subsectors: Truck 

Transportation (subsector 484) and 

Transit and Ground Transportation 

(subsector 485). 

As shown in Table 3 below, the SBA 

size standards for subsectors 484 and 

485 range from $19.0 million to $43.0 

million in revenue per year. To 

determine the percentage of firms that 

have revenue at or below SBA’s 

thresholds within each of the NAICS 

national industries, FMCSA examined 

data from the 2017 Economic Census.27

The Census Bureau will suppress (omit) 

data in Economic Census tables if the 

data, were it to be known, would allow 

one contributor’s value to be too closely 

estimated. This can occur when there 

are very few contributors, or when there 

are one or two large contributors that 

dominate the aggregate statistic.28 In 

instances where 2017 data were 

suppressed, the Agency imputed 2017 

levels using data from the 2012 

Economic Census.29 Boundaries for the 

revenue categories used in the 

Economic Census do not exactly 

coincide with the SBA thresholds. 

Instead, the SBA threshold generally 

falls between two different revenue 

categories. However, FMCSA was able 


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30All national industries under this subsector 

have an SBA size threshold of $34 million with the 

exception of General Freight Trucking, Long Distance, Less Than Truckload (484122), which has 

a revenue threshold of $43 million. 

to estimate the percentage of small 

entities within each NAICS code. 

The percentages of entities with 

annual revenue less than the SBA’s 

threshold, and therefore considered 

small, ranged from 93.1 percent to 99.5 

percent. Specifically, approximately 

93.1 percent of the firms in the category 

representing brokers, Freight 

Transportation Arrangement (national 

industry 488510), had annual revenue 

less than the SBA’s revenue threshold of 

$20.0 million and would be considered 

small entities.30 FMCSA estimates 99.5 

percent of firms in the General Freight 

Trucking, Local (national industry 

484110) had annual revenue less than 

the corresponding SBA’s revenue 

threshold of $34.0 million and would be 

considered small entities. 

The Agency believes that the burden 

to small brokers would be de minimis. 

The proposed rule would not impose 

any burdens on small motor carriers. 

Small brokers would be required to 

maintain transparency records 

electronically, include the date of 

payment for each service performed in 

connection with each shipment, and 

would be permitted to include 

confidentiality clauses in their 

contracts. The Agency believes that 

most, if not all, small brokers are 

currently maintaining records of their 

transactions in an electronic format. For 

brokers who are not maintaining their 

records electronically, the Agency 

estimates that these records can be made 

available electronically at a per 

transaction cost of $2.75, based on the 

assumption that it would take an office 

clerk approximately 5 minutes to create 

an electronic record of each transaction. 

The Agency also believes that small 

brokers likely already retain payment 

dates for brokered services as part of 

their standard transaction and 

accounting processes. The Agency finds 

that including date of payments with 

records requested under § 371.3 would 

constitute a minimal burden. Small 

brokers could incur some loss in 

revenues through transfers if the 

proposed regulation is effective in 

increasing transparency between 

brokers, shippers, and carriers. 

However, the Agency is unable to 

quantify the frequency and magnitude 

of possible transfers but believes it 

would be small based on the following 

factors: 

1. Pricing for brokered contracts is 

nuanced, and the economic conditions 

affecting any given brokered contract are 

unlikely to be identical to those 

affecting any future brokered contracts. 

This limits and may possibly negate the 

effectiveness of using broker 

information to negotiate for better rates 

on future contracts; 

2. The willingness of motor carriers to 

accept brokered freight contracts are 

based on several factors, such that 

increased transparency may have 

minimal to no impact on carrier 

preferences. These factors include costs 

of fulfilling the contractual obligations, 

market rate information, existing 

economic conditions, the type of 

commodity, and the time of year; and 

3. Brokers may find that they can 

retain current margins due to the 

relatively strong demand for brokered 

freight contracts. 

Table 3 below shows the complete 

estimates of the number of small entities 

within the industries that may be 

affected by this rule. 

TABLE 3—ESTIMATES OF NUMBER OF SMALL ENTITIES

NAICS code Description 

SBA size 

standard 

(millions) 

Total 

number 

of firms 

Number of 

small entities 

Percent of 

all firms 

484110 ................... General Freight Trucking, Local ................................. $34.0 22,066 21,950 99.5 

484121 ................... General Freight Trucking, Long Distance, Truckload 34.0 23,557 23,045 97.8 

484122 ................... General Freight Trucking, Long Distance, Less Than 

Truckload.

43.0 3,138 3,050 97.2 

484210 ................... Used Household and Office Goods Moving ............... 34.0 6,097 6,041 99.1 

484220 ................... Specialized Freight (except Used Goods) Trucking, 

Local.

34.0 22,797 22,631 99.3 

484230 ................... Specialized Freight (except Used Goods) Trucking, 

Long Distance.

34.0 7,310 7,042 96.3 

488510 ................... Freight Transportation Arrangement ........................... 20.0 13,252 12,332 93.1 

Consequently, I certify that the 

proposed action would not have a 

significant economic impact on a 

substantial number of small entities. 

D. Assistance for Small Entities 

In accordance with section 213(a) of 

the Small Business Regulatory 

Enforcement Fairness Act of 1996 (Pub. 

L. 104–121, 110 Stat. 857), FMCSA 

wants to assist small entities in 

understanding this proposed rule so 

they can better evaluate its effects on 

themselves and participate in the 

rulemaking initiative. If the proposed 

rule would affect your small business, 

organization, or governmental 

jurisdiction and you have questions 

concerning its provisions or options for 

compliance, please consult the person 

listed under FOR FURTHER INFORMATION

CONTACT. 

Small businesses may send comments 

on the actions of Federal employees 

who enforce or otherwise determine 

compliance with Federal regulations to 

the Small Business Administration’s 

Small Business and Agriculture 

Regulatory Enforcement Ombudsman 

(Office of the National Ombudsman, see 

https://www.sba.gov/about-sba/ 

oversight-advocacy/office-nationalombudsman) and the Regional Small 

Business Regulatory Fairness Boards. 

The Ombudsman evaluates these 

actions annually and rates each agency’s 

responsiveness to small business. If you 

wish to comment on actions by 

employees of FMCSA, call 1–888–REG– 

FAIR (1–888–734–3247). DOT has a 

policy regarding the rights of small 

entities to regulatory enforcement 

fairness and an explicit policy against 

retaliation for exercising these rights. 

E. Unfunded Mandates Reform Act of 

1995 

The Unfunded Mandates Reform Act 

of 1995 (2 U.S.C. 1531–1538) (UMRA) 

requires Federal agencies to assess the 

effects of their discretionary regulatory 

actions. The Act addresses actions that 

may result in the expenditure by a State, 

local, or Tribal government, in the 


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31Public Law 108–447, 118 Stat. 2809, 3268, note 

following 5 U.S.C. 552a (Dec. 4, 2014). 

32Public Law 107–347, sec. 208, 116 Stat. 2899, 

2921 (Dec. 17, 2002). 

aggregate, or by the private sector of 

$200 million (which is the value 

equivalent of $100 million in 1995, 

adjusted for inflation to 2023 levels) or 

more in any one year. Though this 

NPRM would not result in such an 

expenditure, and the analytical 

requirements of UMRA do not apply as 

a result, the Agency discusses the effects 

of this rule elsewhere in this preamble. 

F. Paperwork Reduction Act 

This proposed rule contains 

information collection requirements 

under the Paperwork Reduction Act of 

1995 (44 U.S.C. 3501–3520). As defined 

in 5 CFR 1320.3(c), collection of 

information comprises reporting, 

recordkeeping, monitoring, posting, 

labeling, and other similar actions. The 

title and description of the information 

collection, a description of those who 

must collect the information, and an 

estimate of the total annual burden 

follow. The estimate covers the time for 

reviewing instructions, searching 

existing sources of data, gathering and 

maintaining the data needed, and 

completing and reviewing the 

collection. 

Title: Property Broker Recordkeeping 

Requirements. 

OMB Control Number: [2126–NEW]. 

Summary of the Information 

Collection: There are two information 

collections. The first covers brokered 

transaction recordkeeping, including the 

requirement for brokers to keep records 

of their transactions for three years and 

make those records available for 

inspection by FMCSA on demand. The 

second covers disclosure of records to 

parties involved in a brokered 

transaction. A broker is obligated to 

provide transaction records, upon 

request, to a shipper or motor carrier 

involved in the transaction. 

Need for Information: The first 

collection of information is needed for 

determining whether a broker is 

complying with FMCSA’s 

recordkeeping regulations. The second 

information collection is needed for 

resolving disputes between shippers, 

brokers, and motor carriers arising from 

brokered transactions. 

Proposed Use of Information: In the 

first information collection, FMCSA 

would inspect and copy records of 

brokered transaction, to confirm 

whether the broker is complying with 

FMCSA’s regulations. This would 

generally occur as part of an 

investigation following a complaint 

about a broker’s practices. In the second 

information collection, shippers and 

motor carriers would use the records to 

verify transaction data, answer 

questions regarding charges and 

payments made, and provide supporting 

evidence in the event of disputes. 

Description of the Respondents: The 

respondents are brokers of property, that 

is, persons who, for compensation, 

arrange, or offer to arrange, the 

transportation of property by an 

authorized motor carrier. The 

respondents include HHG and non-HHG 

brokers. 

Number of Respondents: The 

estimated number of respondents is 

32,362. 

Frequency of Response: For the first 

information collection, the frequency of 

response as it pertains to a broker’s 

obligation to make records available for 

inspection by FMCSA on demand will 

depend on how often the Agency 

inspects brokers’ transaction records. 

The Agency believes that this will be a 

relatively rare occurrence compared to 

the total number of brokered 

transactions. For the second information 

collection, FMCSA finds no material 

difference in the anticipated frequency 

of requests for information from HHG 

brokers and non-HHG brokers. The 

Agency estimates that 5 percent of 

brokered property transactions will 

result in a request for transaction 

records. This would correspond to an 

average of 4 requests per year for each 

HHG property broker and 630 requests 

per year for each non-HHG property 

broker. 

Burden of Response: The first 

information collection would impose no 

annual burden hours on brokers because 

it is an ordinary and customary business 

practice. The second information 

collection would impose an estimated 

burden of 2 minutes per request. 

Estimate of Total Annual Burden: 

There is no annual burden for the first 

information collection. For the second 

information collection, the total annual 

burden is estimated at 670,000 hours, 

which corresponds to an estimated 

$22,110,000 of labor costs. There are no 

non-labor costs associated with the 

second information collection. 

As required by the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

3507(d)), FMCSA will submit a copy of 

this NPRM to OMB for review. You are 

asked to comment on any aspect of this 

information collection, including: (1) 

Whether the proposed collection is 

necessary for FMCSA to perform its 

functions; (2) the accuracy of the 

estimated burden; (3) ways for FMCSA 

to enhance the quality, usefulness, and 

clarity of the collected information; and 

(4) ways that the burden could be 

minimized without reducing the quality 

of the collected information. 

G. E.O. 13132 (Federalism) 

A rule has implications for federalism 

under section 1(a) of E.O. 13132 if it has 

‘‘substantial direct effects on the States, 

on the relationship between the national 

government and the States, or on the 

distribution of power and 

responsibilities among the various 

levels of government.’’ FMCSA has 

determined that this rule would not 

have substantial direct costs on or for 

States, nor would it limit the 

policymaking discretion of States. 

Nothing in this document preempts any 

State law or regulation. Therefore, this 

rule does not have sufficient federalism 

implications to warrant the preparation 

of a Federalism Impact Statement. 

H. Privacy 

The Consolidated Appropriations Act, 

2005,31 requires the Agency to assess 

the privacy impact of a regulation that 

will affect the privacy of individuals. 

This NPRM would not require the 

collection of personally identifiable 

information (PII). 

The Privacy Act (5 U.S.C. 552a) 

applies only to Federal agencies and any 

non-Federal agency that receives 

records contained in a system of records 

from a Federal agency for use in a 

matching program. 

The E-Government Act of 2002,32

requires Federal agencies to conduct a 

Privacy Impact Assessment (PIA) for 

new or substantially changed 

technology that collects, maintains, or 

disseminates information in an 

identifiable form. No new or 

substantially changed technology would 

collect, maintain, or disseminate 

information as a result of this rule. 

Accordingly, FMCSA has not conducted 

a PIA. 

The Agency will complete a Privacy 

Threshold Assessment (PTA) to evaluate 

the risks and effects the proposed 

rulemaking might have on collecting, 

storing, and sharing personally 

identifiable information. The PTA will 

be submitted to FMCSA’s Privacy 

Officer for review and preliminary 

adjudication and to DOT’s Privacy 

Officer for review and final 

adjudication. 

I. E.O. 13175 (Indian Tribal 

Governments) 

This rule does not have Tribal 

implications under E.O. 13175, 

Consultation and Coordination with 

Indian Tribal Governments, because it 

does not have a substantial direct effect 


khammond on DSK9W7S144PROD with PROPOSALS
91670 Federal Register / Vol. 89, No. 224 / Wednesday, November 20, 2024 / Proposed Rules 

on one or more Indian Tribes, on the 

relationship between the Federal 

Government and Indian Tribes, or on 

the distribution of power and 

responsibilities between the Federal 

Government and Indian Tribes. 

J. National Environmental Policy Act of 

1969 

FMCSA analyzed this proposed rule 

pursuant to the National Environmental 

Policy Act of 1969 (42 U.S.C. 4321 et 

seq.) and determined this action is 

categorically excluded from further 

analysis and documentation in an 

environmental assessment or 

environmental impact statement under 

FMCSA Order 5610.1 (69 FR 9680), 

Appendix 2, paragraphs 6(k)(1) and (2). 

The categorical exclusions (CEs) in 

paragraphs 6(k)(1) and (2) cover 

requirements pertaining to the duties 

and obligations of a broker, and the 

records a broker must keep. The 

proposed requirements in this rule are 

covered by these CEs. 

K. Rulemaking Summary 

As required by 5 U.S.C. 553(b)(4), a 

summary of this rule can be found in 

the Abstract section of the Department’s 

Unified Agenda entry for this 

rulemaking at https://www.reginfo.gov/

public/do/eAgendaViewRule?

pubId=202310&RIN=2126-AC63. 

List of Subjects in 49 CFR Part 371 

Brokers, Motor carriers, Reporting and 

recordkeeping requirements. 

Accordingly, FMCSA proposes to 

amend 49 CFR part 371 as follows: 

PART 371—BROKERS OF PROPERTY 

■ 1. The authority citation for part 371 

is revised to read as follows: 

Authority: 49 U.S.C. 13301, 13501, 13904, 

and 14122; subtitle B, title IV of Pub. L. 109– 

59; and 49 CFR 1.87. 

§ 371.2 [Amended] 

■ 2. Amend § 371.2 by removing the 

definition of ‘‘Non-brokerage service’’. 

■ 3. Revise and republish § 371.3 to read 

as follows: 

§ 371.3 Records to be kept by brokers. 

(a) A broker must keep a record of 

each transaction. Such records must be 

maintained in an electronic format as 

described in § 390.32(d). For purposes 

of this section, brokers may keep master 

lists of consignors and the address and 

registration number of the carrier, rather 

than repeating this information for each 

transaction. The record must show: 

(1) The name and address of the 

consignor; 

(2) The name, address, and 

registration number of the originating 

motor carrier; 

(3) The bill of lading or freight bill 

number; 

(4) The amount of compensation 

received by the broker for each service 

performed in connection with each 

shipment, including freight charges, 

surcharges, and accessorial fees; the 

date of payment; and the name of the 

payer, including any business aliases, if 

known; and 

(5) Any penalties assessed in 

connection with each shipment. 

(b) Brokers must keep the records 

required by this section for a period of 

3 years. 

(c) Brokers must provide, upon 

request by any party to a brokered 

transaction, a copy of the record of the 

transaction required to be kept by this 

section. Records must be provided 

electronically within 48 hours of the 

broker’s receipt of the request. 

Issued under authority delegated in 49 CFR 

1.87. 

Vincent G. White, 

Deputy Administrator. 

[FR Doc. 2024–27115 Filed 11–19–24; 8:45 am] 

BILLING CODE 4910–EX–P 

DEPARTMENT OF TRANSPORTATION 

National Highway Traffic Safety 

Administration 

49 CFR Part 571 

[Docket No. NHTSA–2024–0057] 

RIN 2127–AK98 

Federal Motor Vehicle Safety 

Standards; Pedestrian Head 

Protection, Global Technical 

Regulation No. 9; Incorporation by 

Reference 

AGENCY: National Highway Traffic 

Safety Administration (NHTSA); 

Department of Transportation (DOT). 

ACTION: Notice of proposed rulemaking; 

extension of comment period. 

SUMMARY: NHTSA received a request to 

extend the comment period for the 

September 19, 2024, Notice of Proposed 

Rulemaking (NPRM) proposing a new 

Federal Motor Vehicle Safety Standard 

(FMVSS) to ensure passenger vehicles 

are designed to mitigate the risk of 

serious to fatal injury in pedestrian 

crashes. The NPRM is based on Global 

Technical Regulation (GTR) No. 9 on 

pedestrian safety, with focused 

enhancements to address safety 

problems. The comment period for the 

NPRM was scheduled to end on 

November 18, 2024. NHTSA is 

extending the comment period for the 

NPRM by 30 days. 

DATES: The comment period for the 

NPRM published on September 19, 

2024, at 89 FR 27502, is extended to 

December 18, 2024. 

ADDRESSES: You may submit comments 

to the docket number identified in the 

heading of this document by any of the 

following methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

• Mail: Docket Management Facility: 

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: 1200 

New Jersey Avenue SE, West Building 

Ground Floor, Room W12–140, between 

9 a.m. and 5 p.m. ET, Monday through 

Friday, except Federal holidays. 

Instructions: All submissions must 

include the agency name and docket 

number. Note that all comments 

received will be posted without change 

to http://www.regulations.gov, including 

any personal information provided. 

Please see the Privacy Act discussion 

below. We will consider all comments 

received before the close of business on 

the comment closing date indicated 

above. To the extent possible, we will 

also consider comments filed after the 

closing date. 

Docket: For access to the docket to 

read background documents or 

comments received, go to http://

www.regulations.gov at any time or to 

1200 New Jersey Avenue SE, West 

Building Ground Floor, Room W12–140, 

Washington, DC 20590, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal Holidays. Telephone: 

202–366–9826. 

Privacy Act: In accordance with 5 

U.S.C. 553(c), DOT solicits comments 

from the public to better inform its 

decision-making 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. In 

order to facilitate comment tracking and 

response, we encourage commenters to 

provide their name, or the name of their 

organization; however, submission of 

names is completely optional. Whether 

or not commenters identify themselves, 

all timely comments will be fully 

considered. 

Confidential Business Information: If 

you wish to submit any information 


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