Document ID: FMCSA-2020-0150-0001
Agency: fmcsa
Document Type: Notice
Title: Owner-Operator Independent Drivers Association: Small Business in Transportation Coalition Petitions for Rulemaking; Transparency in Property Broker Transactions
Posted Date: 2020-08-19T04:00Z

[Federal Register Volume 85, Number 161 (Wednesday, August 19, 2020)]
[Notices]
[Pages 51145-51147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18130]

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2020-0150]

Owner-Operator Independent Drivers Association, Small Business in 
Transportation Coalition Petitions for Rulemaking; Transparency in 
Property Broker Transactions

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

ACTION: Notice; request for public comments.

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SUMMARY: FMCSA requests public comments on petitions for rulemaking to 
amend certain requirements for property brokers submitted by the Owner-
Operator Independent Drivers Association (OOIDA) and the Small Business 
in Transportation Coalition (SBTC). OOIDA requests that FMCSA require 
property brokers to provide an electronic copy of each transaction 
record automatically within 48 hours after the contractual service has 
been completed, and prohibit explicitly brokers from including any 
provision in their contracts that requires a motor carrier to waive its 
rights to access the transaction records. SBTC requests that FMCSA 
prohibit brokers from coercing or otherwise requiring parties to 
brokers' transactions to waive their right to review the record of the 
transaction as a condition for doing business. SBTC also requests that 
FMCSA adopt regulatory language indicating that brokers' contracts may 
not include a stipulation or clause exempting the broker from having to 
comply with the transparency requirement.

DATES: Comments must be submitted by October 19, 2020.

ADDRESSES: You may submit comments identified by Docket Number FMCSA-
2020-0150 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 ``Submitting 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 
notice (Docket No. FMCSA-2020-0150), 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 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-2020-0150, in

[[Page 51146]]

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 notice. 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 notice.

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-2020-0150 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. OOIDA Petition for Rulemaking

    OOIDA requested that FMCSA amend 49 CFR 371.3 to require brokers to 
provide an electronic copy of each transaction record automatically 
within 48 hours after the contractual service has been completed. OOIDA 
also requested that the Agency explicitly prohibit brokers from 
including any provision in their contracts that requires a carrier to 
waive their rights to access the transaction records required by 
section 371.3.
    OOIDA explained that with freight rates reaching historic lows, 
small motor carriers of property are struggling financially. Motor 
carriers have expressed frustration about the lack of transparency 
between brokers and motor carriers. OOIDA believes the problem is that 
the regulations designed to provide transparency are routinely evaded 
by brokers or simply not enforced by FMCSA. While the current rules 
require brokers to keep transaction records and permit each party to a 
brokered transaction to review the records, many brokers implement 
hurdles they know will prevent a carrier from ever seeing this 
information. For example, some brokers allow a motor carrier to access 
records only at the broker's office during normal business hours, and 
OOIDA argues this makes it virtually impossible for motor carriers to 
access the records. Given that many business transactions now take 
place electronically, OOIDA believes that the rules need to be updated 
to improve transparency and prevent brokers from keeping their 
transaction records from motor carriers that are not located near the 
broker. The updated rules would also prevent brokers from retaliating 
against carriers that request the transaction information. A copy of 
the OOIDA petition is included in the docket for this notice.

C. SBTC Petition for Rulemaking

    The SBTC requested that FMCSA amend 49 CFR 371.3 to prohibit 
brokers from coercing or otherwise requiring parties to a transaction 
to waive their right to review the record of the transaction as a 
condition of doing business. The requested language would also state 
that ``No stipulation or clause in any contract shall exempt any broker 
from having to comply with this rule, upon demand, by a party to the 
transaction.''
    SBTC explained that freight rates have dropped drastically and that 
motor carriers have reported instances of brokers engaging in 
``profiteering, price gouging and low-balling tactics.'' SBTC claims 
that in some instances, brokers are receiving commissions of up to 65 
percent on loads due to a sudden shortage of freight and over-capacity 
in the transportation market. SBTC stated that, to evade regulations, 
some brokers have resorted to requiring carriers, as parties to broker 
transactions, to waive their rights to obtain documents that

[[Page 51147]]

show the amount the shipper is paying the broker. SBTC further states 
that the provisions in 49 CFR 371.3 should be strengthened to stop this 
abuse, noting:

    While the SBTC does not seek to return to economic regulation to 
limit the amounts or percentages brokers earn and believe this 
should be left to the free market--much like we wouldn't want 
carriers' revenue to suddenly be limited, transparency is essential 
in making sure market forces operate ethically and fairly. We 
believe FMCSA should enforce its rule and act to terminate this 
abuse by big brokers in the marketplace.

    A copy of SBTC's petition is included in the docket for this 
notice.

II. 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 comments on OOIDA's and SBTC's petitions for 
rulemaking. The Agency seeks public feedback concerning its statutory 
authority to require that brokers disclose certain financial details 
about transactions to motor carriers, and further seeks comments on 
whether a regulatory action would provide an effective solution to the 
problem described. Commenters are encouraged to provide responses to 
the following questions:
    1. FMCSA has authority under 49 U.S.C. 14122(a) to require the form 
of records to be prepared or compiled by carriers and brokers, the 
Agency's right of inspection under 49 U.S.C. 14122(b), its authority to 
prescribe time periods for preservation of records under 49 U.S.C. 
14122(c), and its authority to require annual financial reports from 
motor carriers, freight forwarders and brokers. FMCSA also has 
discretionary authority to prescribe regulations to carry out the 
provisions of 49 U.S.C. 13101-14916 that govern the commercial aspects 
of motor carrier and broker transportation. 49 U.S.C. 13301(a). Section 
13301(a) is the statutory successor to former 49 U.S.C. 10321, which 
the ICC relied on in 1980 in prescribing the regulations later 
redesignated as part 371. In light of the significant statutory changes 
reducing the scope of regulatory authority over commercial 
transportation that have occurred since 1980, what statutory 
provisions, if any, would be carried out by the regulatory changes 
requested by the petitioners? In particular, how would a rule 
restricting the rights of private parties from including certain terms 
in their agreements align with the Agency's statutory authority?
    2. How would a rulemaking expanding FMCSA's role in enforcement of 
the requirement mandating that brokers automatically disclose financial 
details about each transaction to the respective motor carrier 
transporting the load, as requested in the OOIDA and SBTC petitions, 
align with the statutes identified above? What measures could FMCSA 
take to ensure that regulatory action in this area is an appropriate 
exercise of the Agency's authority?
    3. Are the transparency issues raised by OOIDA and SBTC 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 are they more widespread such that the rulemaking should cover all 
brokers, regardless of size?
    4. If the transparency issues are primarily associated with large 
brokers, what revenue threshold should the FMCSA consider for the 
applicability of any new requirements, and how would the Agency obtain 
accurate information about brokers' revenues?
    5. The OOIDA petition requested that brokers provide information to 
motor carriers automatically and electronically. The Agency requests 
commenters to provide their views on the most efficient and effective 
means of accomplishing this request. Should each broker have, for 
example, a stand-alone system with motor carriers receiving an email 
from the broker after the contractual service has been completed, or 
should brokers 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?
    6. The OOIDA petition request that FMCSA require brokers to provide 
transaction information automatically within 48 hours of the completion 
of the contractual services would likely require information technology 
(IT) resources that are currently not in use. FMCSA requests that 
commenters provide cost estimates for implementing an 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 carriers utilizing any of the brokers within the group.
    7. Please provide a quantitative estimate of the economic benefits 
that would likely be achieved by motor carriers if FMCSA adopted the 
rules OOIDA and SBTC requests. How much additional revenue might motor 
carriers receive on a per-transaction basis?
    8. Please provide a quantitative estimate of the economic costs to 
brokers or others if FMCSA adopted the rules OOIDA and SBTC request. 
How much profit reduction on a per-transaction basis would brokers 
experience, and what percentage of the costs would be passed through to 
shippers or motor carriers?

    Issued under authority delegated in 49 CFR 1.87.
Heather Eilers-Bowser,
Chief Counsel.
[FR Doc. 2020-18130 Filed 8-18-20; 8:45 am]
BILLING CODE 4910-EX-P