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New Senate Legislation Would Crack Down on Brokers

Sens. Olympia J. Snowe (R-Maine) and Amy Klobuchar (D-Minn.) have introduced the Motor Carrier Protection Act, bipartisan legislation that would beef up regulatory oversight of brokers and freight forwarders in the trucking industry.

The legislation is meant to prevent brokers from abusing the system and defrauding motor carriers. The Snowe-Klobuchar initiative is aimed at small trucking companies and owner-operators, in particular, as they typically have little to no legal recourse to recoup losses incurred from fraudulent brokers.

"Many truckers are small, independent businesses that fraudulent freight forwarders and corrupt brokers too often easily prey upon," said Klobuchar. "This legislation ensures trucking operators have the tools and protections necessary to prevent fraud, and also modernizes and strengthens federal oversight of this industry."

In a statement, the Owner-Operator Independent Drivers Association, which worked closely on the development of the bill with the Senators, praised the introduction.

"If passed, this law would put a stop to a system that allows rogue brokers and scam artists to operate unchecked," said Todd Spencer, executive vice president of OOIDA. "Too often, we've seen bad brokers get away with collecting payment from shippers but leaving truckers holding the bag."

If passed, the bill would:

Increase the broker bond from $10,000 to $100,000 and expand that bond requirement to freight forwarders. Ramp up requirements and disclosures for any person or company seeking to obtain broker or freight forwarder authority. Establish significant penalties for violations of broker regulations, including unlimited liability for freight charges for conducting brokerage activities without a license or bond. Create a requirement for brokers and freight forwarders to renew their operating authority annually and require the Federal Motor Carrier Safety Administration to revoke operating authority that is not renewed annually. Revenue generated from the renewal fees will be dedicated to FMCSA's oversight and enforcement of broker regulations. Establish strict guidelines on companies that provide brokers with surety bonds and on how they administer bonds. Clarify that trucking companies must have a broker's or freight forwarder's license and an appropriate bond in addition to their motor carrier operating authority to arrange freight for another carrier for compensation.
"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 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."

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