On June 10, the Federal Motor Carrier Safety Administration (FMCSA) published a notice seeking public comments to help it develop guidance clarifying the definitions of “broker” and “bona fide agents.” The guidance is intended to address whether the agency regulates as brokers trucking businesses that provide electronic load board services, dispatch services, and other intermediary services. The comments are due July 11.

Questions have arisen about whether entities that provide dispatch services should qualify as bona fide agents and whether entities in the trucking industry that operate electronic load board services or have adopted other novel business models qualify as brokers. In fact, the FMCSA’s notice states that the agency has received many requests about the broker definition and has become aware of “significant stakeholder interest in FMCSA’s unauthorized brokerage enforcement.” Also, Congress has directed the FMCSA to issue guidance clarifying its definitions in 49 CFR 371.2 of the terms “broker” and “bona fide agents” by November 15, considering the extent to which dispatch-service providers are brokers or bona fide agents and the extent to which technology has changed the nature of freight brokerage.

Guidance on the definitions of broker and bona fide agent will likely have a significant impact on trucking intermediaries, especially those that use novel business models. The FMCSA requires brokers to have a $75,000 surety bond or trust fund and comply with recordkeeping rules, misrepresentation prohibitions, rebating and compensation limitations, accounting rules, and other requirements. But the agency does not regulate what it calls bona fide agents as brokers in certain circumstances where they perform what would otherwise be broker services. Depending on whether the agency expands or narrows the definitions of broker and bona fide agent, trucking intermediaries may see their compliance obligations change significantly, which could ultimately affect regulatory protections afforded shippers and the costs of intermediary services.

Interested parties, including shippers and intermediaries, may provide comments to the FMCSA to inform the future guidance. Specifically, the FMCSA’s June 10 notice invites responses to several important questions related to the future guidance, including:

  • What evaluation criteria should FMCSA use when determining whether a business model/entity meets the definition of a broker?
  • What are some examples of operations that do/do not meet the definition of a broker in the FMCSA regulations?
  • How should the term “dispatch service” be defined, and what should the agency consider when determining if a dispatch service needs broker operating authority?
  • Should electronic bulletin boards be considered brokers and be required to obtain broker operating authority?
  • Are there other business models/services that should be considered when clarifying the definition of broker?