Subscribe to our free, weekly email newsletter!

Trucking news: New legislation takes aim at practices of trucking brokers and freight forwarders


Senators Olympia J. Snowe (R-Maine) and Amy Klouchbar (D-Minn.)

By Staff
June 17, 2010

Legislation focused on providing increased regulatory oversight of brokers and freight forwarders in the trucking industry was introduced this week.

Entitled the “Motor Carrier Prevention Act,” the legislation aims to prevent brokers from abusing the system and defrauding motor carriers, according to its sponsors Senators Olympia J. Snowe (R-Maine) and Amy Klouchbar (D-Minn.).

According to the senators, the objective of this legislation is to prevent brokers from abusing the system and defrauding motor carriers, with a focus on small trucking companies and owner-operators, whom often lack the legal means to recoup losses incurred from fraudulent brokers.

“All too often motor vehicle operators fall victim to the deceitful behavior of fly-by-night brokers and freight forwarders who engage in preposterous criminal activities, such as financial fraud,” said Senator Snowe, a member of the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security, which has jurisdiction over the legislation. “By updating current regulations, this legislation will give trucking operators peace of mind that they will, indeed, receive payment for a job well done.”

  • increases the broker bond from $10,000 to $100,000 and applies the bonding requirement to freight forwarders;
  • establishe stricter requirements for entities seeking broker/forwarder authority as well as specific guidelines from FMCSA’s review of authority applicants and applications;
  • establishes strict penalties for violations including unlimited liability for freight charges for brokerage activities without a license or bond.  Authorizes private damages remedies against companies who violate FMCSA regulations;
  • establish an annual registration requirement to renew broker/forwarder operating authority and generate revenue for FMCSA enforcement. Requires FMCSA to revoke operating authority that is not renewed annually;
  • establish strict regulations on bond providers and the manner in which bonds are administered;
  • clarify that motor carriers must have a brokers or forwarders license and bond to put freight on another carrier for compensation; and
  • require separate registration numbers per authority, and that whatever authority is used in a transaction must be stated in writing.  

This legislation was soundly endorsed by the Owner-Operator Independent Drivers Association. OOIDA Executive Vice President Todd Spencer said in a statement that this law would put a stop to a system that allows rogue brokers and scam artists to operate unchecked.

““Too often, we’ve seen bad brokers get away with collecting payment from shippers but leaving truckers holding the bag,” said Spencer.

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Logistics managers have always been under pressure to strike the right distance between specialized intermediaries and the markets they want to serve. That challenge is becoming increasingly complex, however, as mega-brokerage enterprises capture more share.

There are so many ways to analyze the state of truckload capacity, and on top of that there is, perhaps, no other facet of freight transportation that is so directly impacted by myriad moving parts, whether it be driver availability, rates, demand, weather, the economy, and, of course, federal regulations, among others.

The ATA said that the annualized turnover rate for large truckload carriers, which it defines as truckload fleets with more than $30 million in revenue, increased 3 percent to an annualized rate of 87 percent in the second quarter.

If you want to meet some of the most ticked-off people on the planet, talk to any trucking industry retiree who received that letter from the Teamsters’ Central States pension plan notifying them of their potential financial haircut coming in retirement.

Global express delivery and logistics services provider DHL introduced a new flight geared towards Michigan-based importers and exporters out of the Detroit Metropolitan Airport.

Article Topics

News · All topics


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA