Federal Register # 2022-12574
Issue at hand: Large broker and carrier groups are telling the FMCSA that dispatch services act the same as freight brokers. They say this because both entities have similar functions. While this is true, Freight Brokers handle money, making them cash managers, therefore, they are required to have federal license. Here is an example of when I am saying:
A shipper gives the broker $1000 for the load to be moved. The broker negotiates with the truck the amount to do the load. Let's say it is $800. the broker gives the carrier $800 of the $1,000 that the shipper paid to have the service completed, which was moving the freight. The agreement between AND expectation from the shipper is that the broker will negotiate a rate and keep their commission and give the rest of the shipper's money to the carrier. Also, the broker is required to have a license because they bought the service from the carrier, with the shipper's money.
Also, the shipper and carrier don't know each other and are keep from knowing each other. This also is a big difference between a broker and a dispatcher. Below is a definition of a broker:
According to Oxford Dictionary:
The "NOUN" meaning of the word.
a person who buys and sells goods or assets for others. "the centralized lenders operate through brokers"
THIS IS WHERE THE EVERYONE NEEDS TO LOOK AT.
So, we see that the broker is the one that is buying the freight from the shipper, not the dispatch service, there the "Freight Broker" has the fiduciary responsibility to pay the carrier, NOT the dispatch service.
Now, here is the "VERB" meaning of the word broker:
arrange or negotiate (a settlement, deal, or plan). "fighting continued despite attempts to broker a ceasefire"
THIS IS WHERE EVERYONE IS FOCUSED ON
This is where a dispatch service should be able to legally do business and is currently doing business. They are like an employee of a business. They DO NOT and ARE NOT allowed to touch any money from the shipper or broker to the carrier. they represent the carrier on in a sales and administrative role. They primarily serve motor carriers too small to have staff on board and carriers with 1-3 trucks.
If dispatch services are banned, then so should truck agents from companies like Landstar, Admiral Merchants, PTL Trucks Lines and any other large company that has independent truck agents who are not W2 dispatchers or employees.
The VERB part of the work :"Broker" is where everyone is getting hung up on. Yes, there are dispatchers who are taking money off the top of the load and acting like brokers. These are the culprits and they need to be dealt with. But let's look at the impact this will have on the industry.
1. Over 78% or 225,000 motor carriers have 1-3 trucks. At least over 50% of the carriers in this category depend on outside help to assist them in their daily functions, such as searching for a load, completing paperwork, factoring their freight bill, handling problems. A lot of these carriers cannot or do not know how to do these functions and drive at the same time.
2. The FMCSA is determining is dispatchers are "Bona Fide" agents of the carrier. What that means is does the dispatch act as an employee of the carrier, therefore disallowing them to be "employees" of multiple carriers. If they decide that they are, which they are not, that means each of the 225,000 carriers with 1-3 trucks that would be candidates of dispatch services would have to hire 225,000 dispatchers. how is that feasible? Can a driver of 1 truck afford to have a dispatcher on payroll. This is burdensome expense and hardship for the carrier and a lost of ability for a dispatcher to stay in business.
3. There would literally be millions affected by this directly and indirectly. Small family businesses, single moms who work at home supporting her family, minorities, small carriers who can't drive as much, therefore making less revenue, brokers (Yes, there are a lot of brokers who depend on dispatch services) and more. The ripple effect would be great.
4. If the dispatchers are forced to become brokers then they cannot take freight from other brokers who mistakenly think that is double-brokering or have policies that do not allow them to give freight to other brokers.
At a time where drivers and workers are hard to find, there is a supply chain crisis, very high fuel prices, and inflation beyond belief, doing this would just add fuel to the fire.
The FMCSA is going to decide it Freight Dispatchers are the same as Freight Brokers. They have opened the comments section on the FMCSA website on June 10, 2022. and will (by law) close the comments section on November 15, 2022. NOW IS THE TIME TO SAY SOMETHING OR WE LOSE OUR VOICE.
To the FMCSA, Department of Transportation, The Senate Committee of Transportation, to our leaders and members of congress, please hear our plea:
This decision will :
Ruin millions of lives,
Damage an industry already hurting due to multiple LARGE issues affecting it.
Give unfair advantage to large carriers and brokers
Create millions of dollars in unfair penalties to unsuspecting small carriers and dispatchers who may not be aware of the changes.
PLEASE GIVE DISPATCHERS THEIR OWN MC DESIGNATION
If they have to be licensed, that is fine but do not eliminate the position!!
To add your name to the change.org petition, click on this link: https://chng.it/V48y2yqj