News
Federal Update
Spencer meets with Sandberg, stresses need for broker oversight

By Jami Jones
senior editor

There's a problem with the way bad brokers do business, drying up one chintzy bond after another, and the government needs to pull in the reins.

That was the message that OOIDA Executive Vice President Todd Spencer and the Association's DC office staffers delivered during a meeting with FMCSA Administrator Annette Sandberg, Feb. 1.

"We stressed the need for more meaningful oversight of brokers in the industry," Spencer said. "And, of course, we got feedback from FMCSA acknowledging an interest in learning more about the issues."

At the heart of the meeting was OOIDA's contention that the $10,000 bond required for brokers to do business isn't enough to cover the debt bad brokers can run up in a very short period of time.

In January 2004, OOIDA petitioned the U.S. Department of Transportation to start a rulemaking to raise the amount of the required property broker surety bond or trust fund to at least $300,000 and as high as $500,000.

Sandberg acknowledged the petition and said the agency would initiate a rulemaking seeking comments on the subject in a February 2005 letter.

The Association filed a supplemental petition requesting the agency proceed on the rulemaking to possibly increase the bond amount required of property brokers. The supplemental petition outlined numerous reasons OOIDA believes a bond amount of at least $300,000 to $500,000 would better protect the truckers who work with brokers on a daily basis.

OOIDA acknowledged in its supplemental petition that FMCSA had a busy year in 2005, but urged the agency to act quickly on the supplemental petition.

"The problems with unscrupulous brokers have continued to worsen, and the need for this action is greater than ever," the petition stated.

However, there is some unclear language about brokers in the Highway Bill - which was signed into law by President Bush as SAFETEA-LU in August 2005. There is a possibility that the legislation may have a statute eliminating oversight of brokers altogether.

In Spencer's discussions with Sandberg, he found out that the matter is being looked into by FMCSA attorneys. Any rulemaking on broker bonds will have to wait until the attorneys issue an interpretation of the statute stuck in the federal highway funding legislation.

"Our next step is to remain optimistic and hope for a favorable interpretation from the FMCSA legal department," Spencer said.

While Spencer did discuss the economic impact brokers have on the industry, he also pointed to their role in safety concerns faced by the industry.

"Some defense department shipments currently moved through brokers were pointed out. The bus of evacuees from the Houston hospital that burned was brokered transportation," Spencer said.

"Needed oversight in transportation isn't just a choice between economics or safety. The two will always be unalterably entwined."

The day of the meeting between Spencer and Sandberg also happened to be the day the administrator submitted her letter of resignation.

jami_jones@landlinemag.com