Broker Transparency – Why It’s Both Unnecessary and Burdensome to Industry
By prioritizing an outdated and unnecessary regulatory debate, FMCSA has chosen to misdirect its resources and attention, leaving a glaring and urgent problem unaddressed: freight fraud.
The Transportation Intermediaries Association (TIA) is deeply disappointed in the Federal Motor Carrier Safety Administration’s (FMCSA) decision to issue a Notice of Proposed Rulemaking (NPRM) on broker transparency while neglecting to address the far more critical and costly issue of freight fraud.
Freight fraud continues to inflict more than $1 billion in losses annually on the U.S. supply chain, threatening the efficiency and security of our nation’s logistics system. By prioritizing an outdated and unnecessary regulatory debate, FMCSA has chosen to misdirect its resources and attention, leaving a glaring and urgent problem unaddressed.
The broker transparency regulation being revisited through this NPRM is a relic of the 1980s, rooted in a trucking landscape vastly different from today.
Originally introduced after the deregulation of the trucking industry, this rule sought to prevent freight rebating or financial double-dipping when brokers operated primarily as commissioned sales agents for motor carriers. However, the modern transportation marketplace has evolved into one driven by trusted relationships, technological transparency through load boards, and supply-and-demand economics.
Market Dynamics Make Broker Transparency a Non-Issue
These market dynamics have rendered the regulation not only unnecessary but also counterproductive to industry. TIA has consistently argued that expanding such antiquated provisions is both un-American and harmful to the industry. FMCSA should focus on forward-thinking policies that serve its primary mission of safety rather than clinging to outdated rules that no longer serve their intended purpose.
What makes this NPRM even more egregious is the stark disconnect between FMCSA’s chosen priorities and the real needs of the industry. During the height of the COVID-19 pandemic, when the broker transparency debate was reignited, FMCSA’s own National Consumer Complaint Database recorded zero complaints related to broker transparency.
Countering Freight Fraud Is Paramount
In contrast, during that same time period, more than 80,000 complaints were filed concerning freight fraud and unlawful brokerage activities; many of those remain unsolved.
These figures illustrate an undeniable misalignment between the regulatory agenda and the pressing challenges faced by stakeholders in the supply chain. Freight fraud is not only a financial burden but also a threat to safety, trust, and operational efficiency across the industry and whole supply chain.
TIA respects the rule of law and acknowledges that existing regulations must be adhered to. However, this NPRM represents regulatory overreach by the Biden administration that risks stifling innovation and undermining the principles of American capitalism.
By imposing unnecessary burdens on brokers—many of which are small businesses—the proposed rules would erode efficiency, add administrative costs, and discourage entrepreneurial growth in a sector that drives a significant portion of the U.S. economy. This rule is simply seeking a solution for a problem that does not exist.
In conclusion, rather than doubling down on outdated regulations, FMCSA should realign its focus to address freight fraud—a clear and present danger to the supply chain—and prioritize its core mission of improving safety on U.S. highways. TIA strongly opposes this NPRM and urges FMCSA to abandon this misguided initiative. The agency’s resources and efforts would be far better spent tackling fraud in the supply chain and other critical safety challenges that genuinely impact the transportation industry and the broader economy.
Burroughs is the president & CEO of the Transportation Intermediaries Association (TIA), which represents transportation intermediaries of all disciplines doing business in domestic and international commerce. TIA is the voice of transportation intermediaries to shippers, carriers, government officials, and international organizations. Learn more about TIA at www.tianet.org.