AIPBA Asks FMCSA to Crack Down on Unlicensed Brokers

On September 5, 2013, the FMCSA issued this Guidance advising it would be developing a "comprehensive enforcement program" with respect to unlicensed brokers and invited industry groups to report unlicensed brokerage activity via this online complaint portal. AIPBA has filed a complaint with FMCSA against an unlicensed broker under FMCSA complaint number 100086655.

FMCSA stated:

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 https://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. FMCSA strongly encourages all motor carriers not to accept loads from unregistered brokers or freight forwarders, as these entities might not have the financial security mandated by MAP–21. FMCSA also notes that motor carriers brokering loads without properly registering with FMCSA as brokers may be subject to private civil actions pursuant to 49 U.S.C. 14707 (emphasis added).

On January 13, 2015, during an FMCSA session at the annual Transportation Research Board conference in Washington, D.C., AIPBA asked FMCSA Associate Administrator for Field Operations Anne L. Collins what the status of this enforcement program was. She advised she was unaware and indicated the agency would have to get back to us. By copy of an email, we are forwarding this matter to Acting FMCSA Administrator Scott Darling's attention.

Currently, the AIPBA is investigating unlicensed brokerage activity including but not limited to the activities of entities referring to themselves as "dispatch services," which operate as non exclusive agents of motor carriers. We believe such business activity falls within the definition of regulated brokerage as defined in 49 CFR 371 and an old Interstate Commerce Commission decision. In Practices of Property Brokers the Commission considered the distinction between agents of carriers and brokers and concluded that one who was in a position to allocate shipments between competing principals was a broker, who required a license. On the other hand, an agent who devotes his service exclusively to a single carrier, is part of that carrier’s organization and does not require a license

Accordingly, the AIPBA calls on FMCSA to proceed with its "comprehensive enforcement program" to detect and enforce its rules against those who engage in unfair competition with duly licensed property broker members of AIPBA by evading and unlawfully circumventing the burdensome $75,000 bond required to obtain a broker license. A copy of this statement will be filed as a comment by AIPBA shortly in the matter of this rulemaking. Comments are due on or before February 26, 2015. AIPBA encourages all duly licensed brokers to echo this call for enforcement via this online commenting portal under Docket No. FMCSA–2014–0211.