By Paul Cullen Sr.
The Cullen Law Firm PLLC
When a broker tells you the load pays $2,500 and you will get 80 percent, how do you know the broker is telling the truth about the gross revenue he or she will receive for the load?
When a broker tells you the load pays you $900, how do you know you are receiving a fair share of what the shipper is actually paying?
49 CFR 371.3 Records to be kept by brokers
A broker shall keep a record of each transaction. For purposes of this section, brokers may keep master lists of consignors and the address and registration number of the carrier, rather than repeating this information for each transaction. The record shall show: (1) The name and address of the consignor; (2) The name, address, and registration number of the originating motor carrier; (3) The bill of lading or freight bill number; (4) The amount of compensation received by the broker for the brokerage service performed and the name of the payer; (5) A description of any non-brokerage service performed in connection with each shipment or other activity, the amount of compensation received for the service, and the name of the payer; and (6) The amount of any freight charges collected by the broker and the date of payment to the carrier. (b) Brokers shall keep the records required by this section for a period of three years. (c) Each party to a brokered transaction has the right to review the record of the transaction required to be kept by these rules.
Editor's note: Boldface emphasis has been added.
Do you know that federal regulations give you the right to see the broker’s paperwork so you can confirm what amount the load actually paid? The federal regulations require brokers to keep records showing the total freight charges collected and the amount they retain. Each party to the brokered transaction has the right to review the broker’s records; the brokers must keep these records for three years.
This regulation can be a powerful tool for a trucker who thinks a broker is concealing or misrepresenting the gross pay for a load. If you are being offered a flat fee for a load, it could be very helpful for you to know what the shipper is actually paying. There is nothing illegal about a broker offering to pay a flat fee for a load, even if that fee is much lower than the gross amount paid by the shipper. You have every right to that information under federal regulations, but not until after the transaction has been completed.
Getting this kind of information, even after the fact, may be useful to help you decide whether a broker has given you a fair amount of the gross revenue. You may want to negotiate a higher amount for that broker’s loads in the future or discontinue your relationship with the broker if you don’t believe the compensation on past loads has been fair.
If you are hauling freight for a percentage of what the shipper pays, it is vital for you to know what the gross freight bill is. Owner-operators who suspect a broker has misrepresented gross revenue should demand to see the broker’s records. If you learn that gross revenue was larger than what was quoted to you, and you received a percentage of a lower amount, you may have a legal claim against the broker under state contract law.
A verbal request is all that is necessary under federal regulations, but a written demand is more likely to get a response. If the broker refuses your request, you may have the right to take him to court to demand the paperwork on past loads. Federal law, 49 USC 14704(a) and 14707(a), gives people private right of action to obtain a court order requiring brokers to comply with the regulations.
In other words, small-business truckers hauling loads that have been brokered can file a civil lawsuit against brokers who violate the federal regulations by failing to maintain or disclose records. Federal law also allows a court to award a reasonable attorney’s fee, which the court will impose as part of the costs of the action, 49 USC 14704(e); 14707(c).
The more truckers exercise their rights under the law and refuse to deal with brokers and carriers who ignore those rights, the better chance OOIDA will have of improving the treatment you get in the industry by eliminating the bad actors who drive freight rates to the bottom.
Use the sample letter (below) to request paperwork from a broker. If you have questions about using this regulation or would like help addressing this issue with a broker who refuses to cooperate, contact OOIDA’s Business Services department at 1-800-444-5791. OOIDA is interested in promoting both carrier and broker compliance with the regulations.
The Cullen Law Firm PLLC is located in Washington, DC. OOIDA General Counsel Paul Cullen Sr. may be reached firstname.lastname@example.org.
I am requesting to see your records from [date] pertaining to [trip number], a load I hauled through your brokerage service. Please know that under federal regulations, 49 CFR Part 371.3, you are required to keep certain records documenting brokered transactions for three years, and I have a right to review those records. Those records include the amount of compensation you received for the brokerage service performed and the name of the payer; and the amount of any freight charges you have collected and the date of payment to the carrier. Federal statutes also permit me to recover attorneys’ fees if you force me to take you to court to compel compliance with the regulations, 49 USC 14704(e); 14707(c).
Please make copies of these records and mail them to me, or set these records aside for me to review in your office. Thank you for your cooperation.
[typed name of trucker]