The FMCSA Asks: Are Dispatch Services Really Just Brokers?

The FMCSA Asks: Are Dispatch Services Really Just Brokers?
The FMCSA is asking around about the difference between brokers and dispatchers.
  • Post category:News

In the past month, the FMCSA has asked from around the trucking industry for input. This input could prove quite useful. You see, there’s blurred lines between the definitions of “bona fide agents” and “broker.” And these definitions are specifically required by the IIJA or Infrastructure Investment and Jobs Act. That’s the legislation that had been passed by Congress while being signed into law by President Biden. The Federal Motor Carrier Safety Administration had asked the selected respondents to answer about 13 specific questions that were related to dispatch services and brokers. Throughout the month, the comment period was open enough to allow about 92 comments to enter from all sorts of groups and individuals, like brokerage groups, trucking groups and individual brokers and carriers. The largest topics of discussion among commenters have the definition of “dispatch services,” while also regarding the role that they take on while being proficient truckers.

The Owner-Operator Independent Drivers Associations believes the dispatch service is doing the Lord’s work for each carrier that they’re involved with. The OOIDA believes that when an intermediary handles money between the shipper and the motor carrier, it’s then that the intermediary conducts a brokered transaction and should allow for broker operating authority. Yet, if the intermediary isn’t handling money directly between shippers and carriers, they shouldn’t be considered a broker.

To be more specific, the OOIDA had this to say. “If the dispatch service is in party to the contract between the shipper and the carrier or plays a financial role directly between the shipper and the carrier, then they should need to obtain broker operating authority. If the dispatch service holds themselves out as a contractor, and a carrier can hire them to work for them as part of their normal organization by signing an agreement with a continuing relationship whereby the carrier directs the duties of the dispatch service, then they should not need to obtain broker operating authority.”

Other trucking associations have different perspectives on brokers and dispatch services.

Meanwhile, the Transportation Intermediaries Association believes that this loophole in FMCSA’s regulations for companies operating multiple dispatch services is real dangerous. As in they are lending to illegal operation as unlicensed brokers. “These services handle freight payments but do not meet the statutory licensing or financial security requirements otherwise applicable to brokers.”

Load One LLC is unbelievably outraged from talking about dispatch services. The company is steadfast, for instance, to believe that dispatchers “are brokers by all means and are skirting the rules, regulations and insurance and liability requirements.”

Seeley and Sylvester Freight Logistics believe in more nuance, as the dispatch services “do not connect shippers who need to move their commodities with carriers that can transport them, therefore do not meet the criteria that matches the broker business model.” Essentially, Seeley and Sylvester believes that the model tends to be totally different in every aspect.

Quality Dispatching Services have their owner being very clear where he stands on brokers being dispatchers and dispatchers being brokers: neither of them are actually each other. “Forcing the same financial and regulatory requirements for freight brokers onto independent dispatchers is counterintuitive and will place an additional financial burden on our owner-operators at a time when we should be supporting the hard-working truckers across the United States of America.”

Ultimately, OOIDA is quick to realize that the definition isn’t the problem, but how the businesses operate themselves.

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