The Federal Motor Carrier Safety Administration (FMCSA) announced the release of a Final Rule on Broker and Freight Forwarder financial responsibility. Through this Final Rule, the FMCSA is amending five separate areas: "assets readily available," immediate suspension of broker/forwarder authority, surety or trust fund responsibilities in cases of broker/forwarder financial failure or insolvency, enforcement authority, and entities eligible to provide trust funds for brokers and forwarders.
"TIA applauds the agency for moving forward on this long overdue rule. 3PLs and brokers are in the midst of a fraud epidemic and a significant aspect of that fraudulent activity centers around trust fund providers and fraudulent entities in the marketplace," said TIA President & CEO Anne Reinke. "The FMCSA's efforts to increase the barrier of entry into the brokerage industry through the elimination of fraudulent trust fund providers will make it more challenging for criminals and scammers to establish a presence in the marketplace as easily."
In 2012, Congress passed the Moving Ahead for Progress in the 21st Century Act or MAP-21, which contained requirements for the financial security of brokers and freight forwarders. The law directed the Secretary to issue regulations to implement and enforce these provisions. In 2014, TIA petitioned the agency to move forward with this rulemaking, which has now finally been accepted. The Agency notes that the Notice of Proposed Rulemaking (NPRM), which was published on January 5, 2023, received 340 comments from the public and industry stakeholders.
"TIA has been a leader in combating fraud for over 12 years, led by the passage of the Fighting Fraud in Transportation Act that was incorporated into MAP-21 over a decade ago. Those provisions are now finally being implemented and enforced, which will have a tremendous impact on our industry," said Reinke.