Tag Archives: regulations

FMCSA revising guidance on freight brokers and agents

The list of questions to be asked to test whether freight broker functions are being satisfied is interesting.

An important controversy is whether load boards are performing broker services. Usually these boards provide load choices for truckers for a membership fee. The actual transaction is between the shipper and and the carrier, and the freight payment is not processed by the load board.

Conventional brokers perform these matching services but collect the fees for each deal, paying the carrier directly using the money collected from the shipper, and deducting their brokerage fee.

The load board service is in some ways similar, and in some ways different. So there are arguments to be made on both sides. A study is required to see if the FMCSA should weigh in to make definitions differently and impose any rules changes.

The main requirements for brokers are to register with the FMCSA, and to file a bond to cover cases when the broker and the other parties cannot agree on the settled amounts of a transaction, or the resolution of claims when the broker goes out of business.

To what extent should load boards be required to do these things? Or is a different type of registry required, to be sure that load boards follow established business principles?

There’s a similar scenario in US government regulation: the FMC’s regulation of ocean freight forwarders or brokers and non-vessel-owning common carriers (NVOCCs). While the differences between the two are not similar to the truck broker case, the pattern of having two registration entities is the same.

It will be useful to see if the FMCSA can find any specific performance reasons why load boards or matching services should be subject to specific regulations.

I suspect that there should be some controls on their practices. But the controls required may not be well covered by making them freight brokers, as the rules are currently framed.

Truckers probably need some protection if a load board goes out of business or fails to deliver load contracts as they promise. And there should be some regulations to speak to the nature of contracts offered and their fine print that might be unfair to either the trucker or the shipper. But these shouldn’t be more severe or more far-reaching than those imposed on true brokers.

Truckers certainly have much more freedom to use a load board or not, and to accept contracts generated or not, and this is an advantage for them individually. They can select the kind of service relation they would like to provide.

John Gallagher Thursday, June 9, 2022

FMCSA revising guidance on freight brokers and agents – FreightWaves

NITL claims alliances create ‘super-carrier distortion’ to liner shipping market

Liner shipping alliances were created years ago when there wasn’t enough containerized cargo for many competing ocean container carriers (sometimes called liners). They have evolved through time, a bit, but still allow several ocean carriers to band together to serve a particular route.

For instance, from Shanghai to LA and return, an alliance might provide weekly service. The companies then rotate in providing that ship for the service. If you book with one of thecompanies, you don’t know whose ship will be carrying the cargo, but it will be one of the members of the alliance. If everything goes smoothly and there are no delays, it should notmatter to the shipper whose ship they are on.

Alliances go by clever names such as THE Alliance (Hapag-Lloyd, ONE, & Yang Ming). Here’s a summary of facts about alliances, including who’s in each.

But when disruptions occur, as now, and ships don’t sail on schedule either because they are postponed by the line, or because of congestion in either the loading port or the unloading port, it becomes a problem.

The article outlines some of the complaints. Alliances have to be authorized by the specific counbtry they dock in. There is actually a bill in the US Congress to suggest that the FMC (Federal Maritime Commission) be given stronger powers to investigate problems and push the alliances to provide fair service to all customers.

By Nick Savvides 06/09/2021

NITL claims alliances create ‘super-carrier distortion’ to liner shipping market – The Loadstar

Challenge HOS final rule in federal court

Teamsters and several safety organizations have challenged the new HOS rules. It won’t keep them from going into effect; but it will point out that the new rules directly contradict previous findings of the FMCSA.

I’ve been waiting for such challenges. The HOS rules were negotiated with lots of deliberation a couple of years ago, and they represent losses of rights for employee truckers. Independent Owner-Operators may have a different view, since they are playing with their own money and time, and might prefer longer hours even if it is less safe.

Like not wearing a mask.

Link: https://www.freightwaves.com/news/breaking-news-safety-groups-teamsters-challenge-hos-rule-in-federal-court

By John Gallagher, Washington Correspondent Wednesday, September 16, 2020