Document ID: FMCSA-2022-0134-0001
Agency: fmcsa
Document Type: Notice
Title: Definitions of Broker and Bona Fide Agents
Posted Date: 2022-06-10T04:00Z

[Federal Register Volume 87, Number 112 (Friday, June 10, 2022)]
[Notices]
[Pages 35593-35595]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-12574]

-----------------------------------------------------------------------

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2022-0134]

Definitions of Broker and Bona Fide Agents

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

ACTION: Notice; request for comments.

-----------------------------------------------------------------------

SUMMARY: FMCSA is requesting responses to a number of questions in 
order to inform future guidance on the definitions of broker and bona 
fide agents. FMCSA is required to issue guidance by November 15, 2022, 
in response to the Infrastructure Investment and Jobs Act (IIJA).

DATES: Comments on this notice must be received on or before July 11, 
2022.

ADDRESSES: You may submit comments bearing the Federal Docket 
Management System Docket ID FMCSA-2022-0134 using any of the following 
methods:
     Federal eRulemaking Portal: Go to 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.

[[Page 35594]]

     Hand Delivery or Courier: West Building Ground Floor, Room 
W12-140, 1200 New Jersey Avenue SE, Washington DC, between 9 a.m. and 5 
p.m., ET, Monday through Friday, except Federal Holidays.
     Fax: (202) 493-2251.
    Instructions: Each submission must include the Agency name and the 
docket number for this notice. Note that DOT posts all comments 
received without change to www.regulations.gov, including any personal 
information included in a comment. Please see the Privacy heading 
below.
    Docket: For access to the docket to read background documents or 
comments, go to www.regulations.gov at any time or visit Room W12-140 
on the ground level of the West Building, DOT, 1200 New Jersey Avenue 
SE, Washington, DC, between 9 a.m. and 5 p.m., ET, Monday through 
Friday, except Federal holidays. If you want acknowledgment that we 
received your comments, please include a self-addressed, stamped 
envelope or postcard or print the acknowledgement page that appears 
after submitting comments online.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments 
from the public to better inform its guidance 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.dot.gov/privacy.

FOR FURTHER INFORMATION CONTACT: Mr. Jeff Secrist, Registration, 
Licensing, and Insurance Division, Office of Registration and Safety 
Information, FMCSA, 1200 New Jersey Avenue SE, Washington, DC 20590-
0001, (202) 385-2367, [email protected]. If you have questions on 
viewing or submitting material to the docket, contact Dockets 
Operations, (202) 366-9826.

SUPPLEMENTARY INFORMATION: 

I. Public Participation and Request for Comments

    FMCSA encourages you to participate by submitting comments and 
related materials.

Submitting Comments

    If you submit a comment, please include the docket number for this 
notice (FMCSA-2022-0134), indicate the specific section of this 
document to which each comment applies, and provide a reason for each 
suggestion or recommendation. You may submit your comments and material 
online or by fax, mail, or hand delivery, but please use only one of 
these means. FMCSA recommends that you include your name and a mailing 
address, an email address, or a phone number in the body of your 
document so the Agency can contact you if it has questions regarding 
your submission.
    To submit your comment online, go to https://www.regulations.gov/docket/FMCSA-2022-0134/document, click on this notice, 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 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.

II. Background

    Currently, broker is defined in 49 U.S.C. 13102(2) as a ``person, 
other than a motor carrier or an employee or agent of a motor carrier, 
that as a principal or agent sells, offers for sale, negotiates for, or 
holds itself out by solicitation, advertisement, or otherwise as 
selling, providing, or arranging for, transportation by motor carrier 
for compensation.'' It is also defined in 49 CFR 371.2(a) as a ``person 
who, for compensation, arranges, or offers to arrange, the 
transportation of property by an authorized motor carrier. Motor 
carriers, or persons who are employees or bona fide agents of carriers, 
are not brokers within the meaning of this section when they arrange or 
offer to arrange the transportation of shipments which they are 
authorized to transport and which they have accepted and legally bound 
themselves to transport.'' In that same section, bona fide agents are 
defined as ``persons who are part of the normal organization of a motor 
carrier and perform duties under the carrier's directions pursuant to a 
preexisting agreement which provides for a continuing relationship, 
precluding the exercise of discretion on the part of the agent in 
allocating traffic between the carrier and others.'' 49 CFR 371.2(b).
    Over the past decade, FMCSA has received numerous inquiries and 
several petitions related to the definition of a broker.\1\ FMCSA is 
aware that there is significant stakeholder interest in FMCSA's 
unauthorized brokerage enforcement. On November 15, 2021, The President 
signed the IIJA into law. (Pub. L. 117-58, 135 Stat. 429) Section 23021 
of the IIJA \2\ directed the Secretary (FMCSA) to issue guidance, 
within 1 year of the date of enactment of the IIJA, clarifying the 
definitions of the terms broker and bona fide agents in 49 CFR 371.2. 
The guidance must take into consideration the extent to which 
technology has changed the nature of freight brokerage, the role of 
bona fide agents, and other aspects of the freight transportation 
industry. Additionally, when issuing the guidance, FMCSA must, at a 
minimum: (1) examine the role of a dispatch service in the 
transportation industry; (2) examine the extent to which dispatch 
services could be considered brokers or bona fide agents; and (3) 
clarify the level of financial penalties for unauthorized brokerage 
activities under 49 U.S.C. 14916, applicable to a dispatch service.
---------------------------------------------------------------------------

    \1\ A list of open and closed petitions for rulemaking is 
available at https://www.fmcsa.dot.gov/regulations/petitions-0.
    \2\ The full text is available at congress.gov/117/plaws/publ58/PLAW-117publ58.pdf.
---------------------------------------------------------------------------

III. Questions

    FMCSA is requesting comment on the following questions, to inform 
the agency as it completes the guidance required by the IIJA. Please 
identify the question you are responding to in each section of your 
comments.
    1. What evaluation criteria should FMCSA use when determining 
whether a business model/entity meets the definition of a broker?
    2. Provide examples of operations that meet the definition of 
broker in 49 CFR 371.2 and examples of operations that do not meet the 
definition in 49 CFR 371.2.
    3. What role should the possession of money exchanged between 
shippers and motor carriers in a brokered transaction play in 
determining whether one is conducting brokerage or not?
    4. How would you define the term dispatch service? Is there a 
commonly accepted definition? What role do dispatch services play in 
the transportation industry?
    5. To the best of your knowledge, do dispatch services need to 
obtain a business license/Employer Identification Number from the State 
in which they primarily conduct business?
    6. Some ``dispatch services'' cite 49 CFR 371.2(b) as the reason 
they do not obtain FMCSA brokerage authority registration in order to 
conduct their operations. As noted above, section 371.2(b) states that 
bona fide agents are ``persons who are part of the normal organization 
of a motor carrier and perform duties under the carrier's

[[Page 35595]]

directions pursuant to a pre-existing agreement which provides for a 
continuing relationship, precluding the exercise of discretion on the 
part of the agent in allocating traffic between the carrier and 
others.'' Some dispatch services interpret this regulation as allowing 
them to represent more than one carrier yet not obtain broker operating 
authority registration. Others interpret this regulation to argue that 
a dispatch service can only represent one carrier without obtaining 
broker authority. What should FMCSA consider when determining if a 
dispatch service needs to obtain broker operating authority?
    7. If a dispatch service represents more than one carrier, does 
this in and of itself make it a broker operating without authority?
    8. When should a dispatch service be considered a bona fide agent?
    9. What role do bona fide agents play in the transportation of 
freight?
    10. Electronic bulletin boards match shippers and carriers for a 
fee. The fee is a membership fee to have access to the bulletin board 
information. Should electronic bulletin boards be considered brokers 
and required to register with FMCSA to obtain broker operating 
authority? If so, when and why?
    11. How has technology changed the nature of freight brokerage, and 
how should these changes be reflected, if at all, in FMCSA's guidance?
    12. Are there other business models/services, other than dispatch 
services and electronic bulletin boards, that should be considered when 
clarifying the definition of broker?
    13. Are there other aspects of the freight transportation industry 
that FMCSA should consider in issuing guidance pertaining to the 
definitions of broker and bona fide agents?

Robin Hutcheson,
Deputy Administrator.
[FR Doc. 2022-12574 Filed 6-9-22; 8:45 am]
BILLING CODE 4910-EX-P