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FMCSA Issues Guidance on Brokerage Terminology

FMCSA is working to stop companies that engage in truck brokering without proper FMCSA authority.

On November 15 FMCSA released interim guidelines aimed at defining the differences between brokers, bona fide agents and dispatch services. The new guidance was required as part of the 2021 Bipartisan Infrastructure Bill.

Dispatchers need broker authority if they:

  • Interact or negotiate a shipment of freight directly with the shipper or a representative of the shipper.

  • Accept or take compensation for a load from the broker or factoring company or are involved in any part of the monetary transaction between any of those entities.

  • Arrange for a shipment of freight for a motor carrier, with which there is no written legal contract with the motor carrier that meets the aforementioned criteria.

  • Accept a shipment without a truck/carrier then attempt to find a truck/carrier to move the shipment.

  • Are a named party on the shipping contract.

  • Are soliciting the open market of carriers for the purposes of transporting a freight shipment.

  • Dispatchers operating as unauthorized brokers can face a fine of up to $10,000 for each violation.

Related to bona fide agents, FMCSA officials stated that representing more than one motor carrier does not necessarily mean one is a broker rather than a bona fide agent.

“Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport,” according to the FMCSA.

“In that same section, bona fide agents are defined as persons who are part of the normal organization of a motor carrier and perform duties under the carrier’s directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.”

FMCSA officials said they do not believe it is the intent of Congress to eliminate the services that dispatchers provide.

“It is clear based on feedback from industry that there is a need and desire for dispatch services, among large and small motor carriers,” according to FMCSA officials. “A beneficial role that a dispatch service may provide is the outsourcing of resources for small motor carriers who cannot afford a full-time employee to perform these functions. The dispatch service can help to ensure the motor carrier has a steady stream of shipments while allowing the motor carrier to focus on its core business of safely transporting freight.”



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