CTA Issues Misleading Information on Broker Licensing Enforcement for Motor Carriers
On Tuesday, November 5th, the California Trucking Association (CTA) issued a notice to their membership that stated: “Yesterday CTA learned that FMCSA's position on enforcement has changed and they now will NOT enforce the broker provision until the conflict is resolved.” TIA staff is hearing a different opinion from the Agency. Members should not conclude there has been any substantive shift in policy concerning MAP-21’s security requirements for property and freight brokers.
On September 4, 2013 the Agency issued a notice entitled, “Registration and Financial Security Requirement for Brokers of Property and Freight Forwarders,” outlining their enforcement procedures moving forward.
FMCSA acknowledges there are motor carriers that occasionally broker loads that have not previously been required to obtain operating authority registration from FMCSA as brokers. However, FMCSA is unable to determine at this time how many motor carriers may be engaged in some brokering activities, making implementation of a comprehensive enforcement program difficult. Therefore, FMCSA will phase in its enforcement of the broker registration requirements for motor carriers that also broker loads. During the first phase-in period, FMCSA will accept complaints regarding unregistered brokerage activities of motor carriers through our National Consumer Complaint Database (see http://nccdb.fmcsa.dot.gov/). FMCSA will work with industry groups to use this complaint information and other data to ascertain the extent of the unlicensed broker population subset within the motor carrier industry. The agency will then work toward developing a comprehensive enforcement program.
The requirement that carriers need separate broker authority is not new, but one that dates back to at least 1949. The Interstate Commerce Commission, in Practices of Property Brokers, 49 M.C.C. 277,280 (ICC1949), specifically addressed the “applicability of the brokerage provisions… to motor carriers who engage in the particular practice of turning over, or surrendering, shipments, which they have solicited on their own behalf and received as carriers, to other motor carriers for compensation in the form of a commission or fee."
The commission further stated, “We think the conclusion is inescapable that without a broker’s license, a carrier which does not itself perform any part of the transportation sold or arranged for, and which is not a bona fide agent of the carrier which does, may not for compensation lawfully sell, offer for sale, or make any contract, agreement, or arrangement to provide, procure, furnish, or arrange for transportation to be furnished by any other carrier or hold itself out to do so.”
Additionally, Section 32919 of MAP-21, establishes a $10,000 fine per occurrence for those entities arranging transportation for compensation, which are not properly registered and licensed. Additionally, by placing this language into law, it affords private parties the ability to take action for themselves for unauthorized brokerage activities, without relying on the Federal Government.
TIA supports legal interlining and trip leasing, but will continue to fight against other groups attempting to create loopholes for their members to practice illegal brokering.
