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FMCSA clarifies key brokerage definitions

Updated: Nov 17, 2022

The Federal Motor Carrier Safety Administration (FMCSA), at the direction of the U.S. Congress, has issued regulatory guidance aimed at clarifying the statutory and regulatory definitions of the terms "broker" and "bona fide agent."

As explained in the agency's November 15, 2022 notice, this "interim guidance [is intended] to inform the public and regulated entities about FMCSA’s interpretation of the definitions of 'broker' and 'bona fide agents' as it relates to all brokers of transportation by motor vehicle. FMCSA is taking this action to better define the terms in response to a mandate in the Infrastructure Investment and Jobs Act (IIJA)."

The agency had previously requested comments on this topic in a notice published back in June. We speculated at the time the agency was potentially targeting so-called "dispatch services" who have emerged in greater numbers in recent years and taken the position they qualify as "bona fide agents" of motor carriers and, thus, don't require their own brokerage authority.

For years, the term "broker" has been defined by federal statute to include 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.” For its part, the FMCSA defines the term in 49 CFR 371.2(a) as a “person who, for compensation, arranges, or offers to arrange, the transportation of property by an authorized motor carrier. Motor carriers, or persons who are employees or bona fide agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.”

In that same section, "bona fide agents" are defined as “persons who are part of the normal organization of a motor carrier and perform duties under the carrier’s directions pursuant to a preexisting agreement which provides for a continuing relationship, precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.”

In its interim guidance on the topic, the FMCSA provides guidance on two issues, specifically. First, in addressing the adequacy of the regulatory definition of "broker," the agency notes the following:

Given the prevailing view among commenters that the current definition of “broker” is adequate, the Agency feels the need to clarify it in only one area: the relevance of an entity’s handling of funds in a transaction between shippers and motor carrier. FMCSA appreciates the robust input it received on this issue. Some commenters believed that whether one handles funds is irrelevant to whether one is a broker. A coalition of stakeholders believed the handling of money is not determinative in the broker determination. Other stakeholders felt that the handling of money had at least some relevance as to whether one is brokering.After consideration of the stakeholder comments and the important role of financial responsibility in broker regulation, FMCSA wishes to clarify that handling money exchanged 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 considered a broker.

Second, in terms of "bona fide agents," the agency notes:

After careful consideration, FMCSA has determined that representing more than one motor carrier does not necessarily mean one is a broker rather than a bona fide agent. Any determination will be highly fact specific and will entail determining whether the person or company is engaged in the allocation of traffic between motor carriers.

When it comes to so-called "dispatch services," the FMCSA explains, "while it is clear that there is no commonly accepted definition of a dispatch service, such services appear to have certain common features. First, they work exclusively for motor carriers, not for shippers. Second, they source loads for motor carriers. And third, they perform additional services for motor carriers that are unrelated to sourcing shipments." It goes on to explain:

FMCSA clarifies that 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. Ultimately, the analysis of whether a person or entity requires broker authority is often highly fact specific and must be made on a case-by-case basis. Regarding whether a dispatch service is a bona fide agent, one must analyze whether the service falls within the definition of bona fide agent in 49 CFR 371.2(b). However, if the dispatch service allocates traffic between two motor carriers, it cannot be a bona fide agent by definition.

The agency goes on to list factors that it believes weigh in favor of a dispatch service NOT requiring broker authority, which include the following:

  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.

On the other hand, factors that weigh in favor of a dispatch service requiring broker authority include:

  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.

The agency concludes its guidance by noting, "If the dispatch service is deemed to be providing unauthorized brokerage services pursuant to 49 U.S.C. 14916, the service will be subject to applicable penalties. If no finding of unauthorized brokerage is made, it will not be subject to such penalties."


The FMCSA's interim guidance, while not technically legally binding, takes aim at certain dispatch services that claim to qualify as "bona fide agents" of motor carriers. Such services that accept or handle monetary transactions between carriers and brokers/shippers or that allocate shipments between two or more carriers are likely to be engaged in unauthorized brokerage under this guidance.

FMCSA is accepting additional comments on this guidance, which can be submitted online at in Docket No. FMCSA-2022-0134.

For more information about this guidance and its potential ramifications, please feel free to contact us.

About Trucksafe Consulting, LLC: Trucksafe Consulting is a full-service DOT regulatory compliance consulting and training service. We help carriers develop, implement, and improve their safety programs, through personalized services, industry-leading training, and a library of educational content. Trucksafe also hosts a monthly live show on its various social media channels called Trucksafe LIVE! to discuss hot-button issues impacting highway transportation. Trucksafe is owned and operated by Brandon Wiseman and Jerad Childress, transportation attorneys who have assisted some of the nation’s leading fleets to develop and maintain cutting-edge safety programs. You can learn more about Trucksafe online at and by following Trucksafe on LinkedIn, Facebook, Twitter, and YouTube.

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