Transportation Executive Summary: FMCSA Announces Interim Guidance Concerning the Interpretation of Brokers and Bona Fide Agents


The U.S. Department of Transportation’s Federal Motor Carrier Safety Administration (“FMCSA”) has issued new interim guidance regarding the definitions of a “broker” and “bona fide agent” as directed by Congress in the Infrastructure Investment and Jobs Act (“IIJA”). The FMCSA focused on updating the definitions in light of technological and industry changes. The FMCSA paid particular attention to the definition and classification of dispatch services, which may be either brokers or bona fide agents depending on the circumstances. The guidance can be accessed here.


Under 49 U.S.C. 13102(2), a broker is defined as “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.” Congress directed the FMCSA to provide guidance on the definition in light of recent technological and industry updates. The FMCSA concluded that, while the technological innovations have been large, they have not necessitated a change to the definition of a broker. The FMCSA did clarify that “handling money between shippers and motor carriers is a factor that strongly suggests the need for broker authority, but it is not an absolute requirement for one to be considers a broker.” Definitions of Broker and Bona Fide Agents, 87 Fed. Reg. 68638 (November 15, 2022) (to be codified at 49 C.F.R. pt. 371). This analysis is highly fact specific.

Bona Fide Agent

The FMCSA also clarified the definition of a bona fide agent regarding how many motor carriers the agent represents. While this analysis is also fact specific, a large part of it hinges on whether the agent represents more than one motor carrier. The FMCSA said, “representing more than one motor carrier does not necessarily mean one is a broker rather than a bona fide agent. Any determination will be fact specific and will entail determining whether the person or company is engaged in the allocation of traffic between motor carriers.” Id.

Dispatch Services

The FMCSA solicited comments from stakeholders regarding the definition of a dispatch service. While the FMCSA was unable to provide a complete definition, it did set out three characteristics of a dispatch service: (1) “they work exclusively for motor carriers not shippers,” (2) “they source loads for motor carriers,” and (3) “they perform additional services for motor carriers that are unrelated to sourcing shipments.” Id. at 68639. The FMCSA said, “when a dispatch service does not participate in the arrangement of freight, or when it represents only one motor carrier, it is not a broker. If a dispatch service arranges transportation on behalf of multiple motor carriers and engages in the allocation of traffic, however, then pursuant to 49 CFR 371.2, it is not a bona fide agent and must obtain broker operating authority registration.” Id. The FMCSA set out a list of factors in favor of a dispatch service not needed to obtain broker authority:

(1) The dispatch service has a written legal contractual relationship with a motor carrier that clearly reflects the motor carrier is appointing the dispatch service as a licensed agent for the motor carrier. This is often a long-term contractual relationship;

(2) The written legal contract specifies the insurance and liability responsibilities of the dispatch service and motor carrier. The dispatch service must also meet all state licensing requirements;

(3) The dispatch service goes through a broker to arrange for the transportation of shipments for the motor carrier. The dispatch service may not seek or solicit shippers for freight;

(4) The dispatch service does not provide billing nor accept compensation from the broker, 3PL (third-party logistics company), or factoring company, but instead receives compensation from the motor carrier(s) based on the pre-determined written legal contractual agreement;

(5) The dispatch service is not an intermediary or involved in the financial transaction between a broker and motor carrier;

(6) The dispatch service is an IRS 1099 recipient from the motor carrier, or a W2 employee of the motor carrier as specified in the legal written contract agreement;

(7) The dispatch service discloses that they are a dispatch service operating under the authority of a specific motor carrier, and the shipment is arranged for that motor carrier only;

(8) The dispatch service does not subsequently assign or arrange for the load to be carried/moved by another motor carrier; or

(9) A dispatch service does not provide their “services” for a motor carrier unless that motor carrier specifically appointed the dispatch service as their agent in accordance with the aforementioned requirements.

Id. Similarly, it set out a list of factors that weigh in favor of a dispatch service requiring broker authority:

(1) The dispatch service interacts or negotiates a shipment of freight directly with the shipper, or a representative of the shipper;

(2) The dispatch service accepts or takes compensation for a load from the broker, or factoring company, or is involved in any part of the monetary transaction between any of those entities;

(3) The dispatch service arranges for a shipment of freight for a motor carrier, with which there is no written legal contract with the motor carrier that meets the aforementioned criteria;

(4) The dispatch service accepts a shipment without a truck/carrier, then attempts to find a truck/carrier to move the shipment;

(5) The dispatch service is a named party on the shipping contract; or

(6) The dispatch service is soliciting to the open market of carriers for the purposes of transporting a freight shipment.

Id. “While no single factor is paramount in assessing the business relationship between a dispatch service and a motor carrier, the extent of a motor carrier's control over the individual(s) performing the dispatch services is highly significant, i.e., the dispatch service works on behalf of the motor carrier and makes decisions based on the motor carrier's guidance and direction” Id.

For more information

Contact John F. Fatino for more information about trucking and transportation regulatory matters at 515-288-6041. Peter J. Chalik assisted in the preparation of these materials.

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