Published May 2, 2023
The Federal Motor Carrier Safety Administration (FMCSA) recently rejected a petition by the Transportation Intermediaries Association (TIA) that asked to remove a disclosure requirement for brokers. In short, the disclosure rule stays in place for now.
The rule has been part of the record keeping requirement for brokers in federal law, 49 CFR 371.3(c), mandating that any party to a brokered transaction “has the right to review the record of the transaction.” These records include the price paid to the broker for brokerage or other services and the shipper involved in the transaction.
Brokers argue that the rates they negotiate with shippers are private-party transactions and should not be disclosed “publicly.” Carriers are generally in favor of the rule so they can see how much margin brokers earn on the loads carriers haul. Some brokers will work around the regulation by asking carriers to waive the right as a condition to haul their shipper’s freight. However, that is a topic for another day.
Leaf expects to see TIA and carrier organizations like the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) continue to duke-it-out over what is mandated by the Feds and what is not.
Whatever the outcome of this rulemaking, Leaf’s goal is to make transportation more reliable — rate visibility is a big part of achieving this outcome. Leaf believes that knowing what the price will be to ship goods, and what the revenue will be to haul them, are two essential inputs to a healthy and reliable transportation marketplace for shippers, carriers, and brokers.
That is why, since Leaf’s founding, we allow our customers to “open the books” and see what prices Leaf was able to secure in order to move goods on a given lane. Just like we expect to know what the price to buy or sell a share of stock is on any given day, we should expect to know the price to move freight on a lane. Leaf enables these capabilities through data analysis that allows our customers to plan, schedule, and move their freight with less waste and better future predictability.
Transparency matters, and it leads to better outcomes for everyone involved in the freight marketplace.