During the April to May bust cycle in the freight market, plenty of motor carriers wondered if freight brokers were thriving at their expense.
The Owner-Operator Independent Drivers Association, a trade group for independent contractors and small carriers, seemed to think so. The group, among others, petitioned the Federal Motor Carrier Safety Administration to require more transparency of freight broker transaction costs and essentially margins.
Title 49 of the Code of Federal Regulations (49 CFR), section 371.3, already requires freight brokers to keep records of transactions, and subpart (c) gives any party to a transaction, including a motor carrier, the right to review those records.
OOIDA wants FMCSA to make subpart (c) a mandate for automatic disclosure.
The Transportation Intermediaries Association (TIA), which represents brokers and third party logistics (3PL) firms, wants FMCSA to strike subpart (c) from the regulation entirely. TIA points to a 1995 act by Congress that terminated the Interstate Commerce Commission (ICC). The act gave shippers, carriers and brokers the ability to require in contracts that one party or another waive their review rights in subpart (c).
Many 3PLs also have non-disclosure agreements with shippers when it comes to freight rates, and require waivers from motor carriers as a condition for doing business.
Getting more transparency of rates and margins no longer depends on both parties following the regulations, however. Motor carriers and 3PLs have access to market rate data from many sources.
