There is an ongoing debate between transportation brokers and underlying motor carriers regarding the information that brokers must maintain and provide to their underlying carriers at their request. The records that brokers are required to maintain and provide carriers upon request are set forth in section 371 of the Code of Federal Regulations (49 C.F.R. 371). Among other records, the regulation requires that brokers maintain and allow carriers access to the rates paid to brokers by shippers. However, such rates are clearly proprietary and confidential information for shippers and brokers.
Many shippers require that their brokers maintain rates as confidential and not divulge such information to underlying carriers. Providing such confidential information to carriers allows carriers and others to unfairly compete for the brokers business. Such divulgence also represents a risk to shippers as such information likely becomes known to the competitors of said shippers. There is presently a rulemaking procedure before the Federal Motor Carrier Safety Administration (FMCSA) instituted by carrier interests protesting waiver provisions included in broker contracts where carriers are required to waive their rights to obtain shipper rates. The outcome of this rulemaking will determine whether carriers are entitled to such proprietary information and if shippers can protect divulgence of their rates to third parties.
To stay up to date on this rulemaking and other transportation matters contact the Transportation Attorneys at Chauvel & Glatt.
This material in this article, provided by Chauvel & Glatt, is designed to provide informative and current information as of the date of the post. It should not be considered, nor is it intended to constitute legal advice. For information on your particular circumstances, please contact Chauvel & Glatt at 650-573-9500 for legal assistance near you. (photo credit: depositphotos.com).