Document ID: FMCSA-2020-0194-0004
Agency: fmcsa
Document Type: Proposed Rule
Title: Petition for Rulemaking: Transportation Intermediaries Association; Property Broker Transaction Records and Regulatory Guidance Concerning Dispatch Services
Posted Date: 2020-11-25T05:00Z

[Federal Register Volume 85, Number 228 (Wednesday, November 25, 2020)]
[Proposed Rules]
[Pages 75280-75282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25307]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Chapter III

[Docket No. FMCSA-2020-0194]

Transportation Intermediaries Association Petition for Rulemaking 
Concerning Property Broker Transaction Records and Regulatory Guidance 
Concerning Dispatch Services

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Petition for rulemaking; request for public comments.

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SUMMARY: FMCSA requests public comments on the Transportation 
Intermediaries Association (TIA) petition for rulemaking concerning the 
rights of parties to a brokered transaction to review the records of 
the transaction and its request that the Agency issue regulatory 
guidance concerning dispatch services. TIA believes transparency in 
broker transactions is provided through other means in today's market 
place and that the regulatory guidance would ensure that interested 
parties can distinguish between a dispatch service and an authorized 
broker.

DATES: Comments must be submitted by January 25, 2021.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2020-0194 using any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the online instructions for submitting comments.
     Mail: Docket Operations, U.S. Department of 
Transportation, 1200 New Jersey Avenue SE, West Building, Ground Floor, 
Room W12-140, Washington, DC 20590-0001.
     Hand Delivery or Courier: Docket Operations, West 
Building, Ground Floor, Room W12-140, 1200 New Jersey Avenue SE, 
Washington, DC 20590, between 9 a.m. and 5 p.m. ET, Monday through 
Friday, except Federal holidays. To be sure someone is there to help 
you, please call (202) 366-9317 or (202) 366-9826 before visiting 
Docket Operations.
     Fax: (202) 493-2251.
    To avoid duplication, please use only one of these four methods. 
See the ``Public Participation and Request for Comments'' portion of 
the SUPPLEMENTARY INFORMATION section for instructions on submitting 
comments.

FOR FURTHER INFORMATION CONTACT: Ms. La Tonya Mimms, Chief, Driver and 
Carrier Operations, Federal Motor Carrier Safety Administration, 1200 
New Jersey Avenue SE, Washington, DC 20590-0001, by telephone at (202) 
366-4001, or by email at MCPSD@dot.gov. If you have questions on 
viewing or submitting material to the docket, contact Docket Services, 
(202) 366-9826.

SUPPLEMENTARY INFORMATION:

A. Submitting Comments

    If you submit a comment, please include the docket number for this 
document (Docket No. FMCSA-2020-0194), indicate the specific section of 
this document to which each comment

[[Page 75281]]

applies, and provide a reason for each suggestion or recommendation. 
You may submit your comments and material online or by fax, mail, or 
hand delivery, but please use only one of these means. FMCSA recommends 
that you include your name and a mailing address, an email address, or 
a telephone number in the body of your document so that FMCSA can 
contact you if there are questions regarding your submission.
    To submit your comment online, go to http://www.regulations.gov, 
put the docket number, FMCSA-2020-0194, in the keyword box, and click 
``Search.'' When the new screen appears, click on the ``Comment Now!'' 
button and type your comment into the text box on the following screen. 
Choose whether you are submitting your comment as an individual or on 
behalf of a third party and then submit.
    If you submit your comments by mail or hand delivery, submit them 
in an unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. If you submit comments by mail and would 
like to know that they reached the facility, please enclose a stamped, 
self-addressed postcard or envelope.
    FMCSA will consider all comments and material received during the 
comment period.
Confidential Business Information
    Confidential Business Information (CBI) is commercial or financial 
information that is both customarily and actually treated as private by 
its owner. Under the Freedom of Information Act (FOIA, 5 U.S.C. 552), 
CBI is exempt from public disclosure. If your comments responsive to 
the notice contain commercial or financial information that is 
customarily treated as private, that you actually treat as private, and 
that is relevant or responsive to the notice, it is important that you 
clearly designate the submitted comments as CBI. Please mark each page 
of your submission that constitutes CBI as ``PROPIN'' to indicate it 
contains proprietary information. FMCSA will treat such marked 
submissions as confidential under the FOIA, and they will not be placed 
in the public docket for this document. Submissions containing CBI 
should be sent to Mr. Brian Dahlin, Chief, Regulatory Analysis 
Division, Federal Motor Carrier Safety Administration, 1200 New Jersey 
Avenue SE, Washington, DC 20590. Any comments FMCSA receives which are 
not specifically designated as CBI will be placed in the public docket 
for this document.

B. Viewing Comments and Documents

    To view comments, as well as any documents mentioned in this 
preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2020-0194 in the 
keyword box, and click ``Search.'' Next, click the ``Open Docket 
Folder'' button and choose the document to review. If you do not have 
access to the internet, you may view the docket online by visiting 
Docket Operations in Room W12-140 on the ground floor of the DOT West 
Building, 1200 New Jersey Avenue SE, Washington, DC 20590-0001, between 
9 a.m. and 5 p.m. ET, Monday through Friday, except Federal holidays. 
To be sure someone is there to help you, please call (202) 366-9317 or 
(202) 366-9826 before visiting Docket Operations.

C. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the 
public to better inform its rulemaking process. DOT posts these 
comments, without edit, including any personal information the 
commenter provides, to www.regulations.gov, as described in the system 
of records notice (DOT/ALL-14 FDMS), which can be reviewed at 
www.transportation.gov/privacy.

I. Background

A. Brokers' Records of Transactions; History of Current Requirements

    Section 371.3(c) of title 49 of the CFR states that ``[e]ach party 
to a brokered transaction has the right to review the record of the 
transaction required to be kept by these rules.'' The current 
requirements under 49 CFR 371.3(c) were adopted by the Interstate 
Commerce Commission (ICC) on October 17, 1980 (45 FR 68941), at 49 CFR 
1045.3(c). Prior to 1980, the broker records requirements under 49 CFR 
1045.3 did not include a specific provision concerning the rights of 
parties to a brokered transaction to review the record of the 
transaction. In its May 12, 1980 (45 FR 31140) notice of proposed 
rulemaking concerning multiple broker regulations, the ICC explained 
that the proposed change to section 1045(c) would allow the agency to 
``. . . eliminate more complex rules found at sections 1045.5, 1045.6, 
and 1045.10.'' Those requirements related to charges for brokerage 
services, charges for non-brokerage services, and duties and 
obligations of brokers, respectively.
    With the termination of the ICC in 1995, the regulatory oversight 
of brokers was transferred to the Federal Highway Administration (FHWA) 
and the requirements under 49 CFR 1045.3 were redesignated, without 
change, under 49 CFR 371.3 (61 FR 54707; October 21, 1996). 
Subsequently, with the establishment of FMCSA in 2000, all motor 
carrier oversight responsibilities and regulations were transferred 
from FHWA to FMCSA.

B. Petition for Rulemaking

    TIA requested that FMCSA rescind 49 CFR 371.3(c) concerning the 
rights of parties to a brokered transaction to review the records of 
the transaction. TIA wrote, ``The Interstate Commerce Commission's 
(ICC) commentary in the Federal Register notice published on May 12, 
1980 offers an interesting perspective on the purpose of the broker 
transaction (emphasis added):

    The amount of the broker's fee is not regulated by the 
Commission. This means that a broker must engage in a bargaining 
process with its principals. The amount of commission that a 
principal agrees to pay will vary according to the benefits it 
perceives it will gain from the transaction. No party is obligated 
to deal with a broker or pays its commissions. A party may either 
choose to do without the brokers' services or to look for another 
broker who will offer the service at a lower price. In this regard, 
we note that the property broker industry is a highly competitive 
one. Our goal in regulating transactions between brokers, carriers, 
and shippers is to remove all unnecessary restrictions which might 
impede the free operation of the marketplace.''

    TIA argues that 49 CFR 371.3(c) is in direct conflict with the 
original intent of the ICC to ensure that ``all unnecessary 
restrictions which might impede the free operation of the marketplace'' 
are removed. TIA stated, ``In today's marketplace brokers are not 
commissioned sales agents of motor carriers. As noted above brokers pay 
motor carriers regardless of the rate that the shipper pays the broker. 
The need to verify commissions no longer exists.''
    TIA asserts that motor carrier transportation on the spot market is 
one of the most transparent market places in the world. Load boards, 
the internet, and rate quotes in person-to-person communications within 
the industry provide the rate transparency that was intended by 49 CFR 
371.3 when commissions paid by carriers to brokers were common. Motor 
carriers have sufficient access to current market rates without 
inspecting brokers' shipment records to find out what the brokers' 
gross margins are on a load-by-load basis.

C. TIA Request for Regulatory Guidance Concerning Dispatch Services

    TIA believes that some ``dispatch services'' are essentially 
unlicensed brokers that handle financial

[[Page 75282]]

transactions for freight transportation services but do not meet the 
statutory licensing or financial security requirements applicable to 
brokers registered with FMCSA. TIA describes dispatch services as 
entities that provide a service on behalf of a motor carrier, where 
they assist on booking loads and other services.
    TIA believes the Agency should publish regulatory guidance 
explaining that the legal duties of a dispatch service allow them to be 
an agent for one motor carrier, and that anything further requires a 
brokerage license and compliance with the financial responsibility 
requirements applicable to brokers. TIA believes this is especially 
necessary when the dispatch service is handling payment from the 
shipper and then making payment to the motor carrier. According to TIA, 
this guidance would ultimately enable private legal action to be taken 
for violations, which would allow the public and the Agency both to 
enforce the provisions of this regulation. A copy of TIA's letter 
petitioning the Agency to initiate rulemaking and to issue regulatory 
guidance is included in the docket for this document.

D. Request for Public Comments

    Petitions for rulemaking are governed by DOT regulations codified 
at 49 CFR 5.13 and FMCSA regulations at 49 CFR 389.31 and 389.33. While 
these regulations do not require FMCSA to publish a notice in the 
Federal Register seeking public comments, FMCSA believes that taking 
this action would provide a means of engaging stakeholders in the 
process for assessing the need for a rulemaking. FMCSA therefore 
requests public comment on TIA's petition for rulemaking to rescind 49 
CFR 371.3 and the association's request that the Agency issue 
regulatory guidance concerning ``dispatch services.'' Commenters are 
encouraged to provide responses to the following questions:
    1. To what extent would brokers' disclosure of the records of 
individual transactions to individual motor carriers under 49 CFR 
371.3(c) place brokers and their shipper clients at risk of having 
proprietary information concerning freight descriptions, transportation 
rates and routes disclosed to their competitors?
    2. For authorized brokers, how often do motor carriers exercise 
their right under 49 CFR 371.3(c) to review the record of the 
transaction, and are there motor carriers who make requests on such a 
frequent basis that they could, if working with other motor carriers, 
learn certain proprietary information concerning shippers' rates and 
routes?
    3. In the absence of 49 CFR 371.3(c), what information concerning 
brokered transactions would authorized brokers share with the shippers 
and for-hire carriers?
    4. To what extent do shippers engage in discussions with brokers 
about the rates the authorized motor carriers will be paid?
    5. How often do shippers enter into negotiations about interstate 
transportation services with an entity that is neither an interstate 
motor carrier registered with FMCSA nor a broker registered with FMCSA?
    6. Would the issuance of regulatory guidance concerning ``dispatch 
services'' provide an effective deterrent to unauthorized brokerage 
services, or would additional actions by FMCSA be required to address 
the challenges described by TIA?
    7. Is there sufficient clarity in the current definitions of 
``broker,'' ``bona fide agents,'' and ``brokerage or brokerage 
service'' under 49 CFR 371.2 to enable interested parties to identify 
dispatch services that are actually carrying out the functions of a 
registered broker and to file a complaint with FMCSA for subsequent 
investigation?

    Issued under authority delegated in 49 CFR 1.87.
James W. Deck,
Deputy Administrator.
[FR Doc. 2020-25307 Filed 11-24-20; 8:45 am]
BILLING CODE 4910-EX-P