Various Law firms and I have noticed a concerted effort to De-legitimize the $57 Billion Dollar a year Dispatch Industry and it’s 100,000 plus Dispatch Firms Nation-wide.
Is it conceivable that hundreds of thousands of Dispatch Firms are operating illegally? And if so; “Why Are They Allowed To Continue? Surely these firms are not above the law; Right?
Or; Is this notion of their illegitimacy mostly political and/or just powerful brokerage firms and Mega Trucking companies are starting to Fear The Little Independent Kids on the Block?
Now; Most Social Media DOT Legal Experts will quote FMCSA’s 49 CFR 371
Here’s a bit of legality the Social Media Legal experts seem to conveniently leave out every-time;
However, under said rule, there is an exception: “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.” That is, an entity is not a broker if it is a “bona fide agent” of a carrier as defined under 49 CFR 371.2(b) 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.”
Regardless of whether an intermediary works for a shipper or carrier and regardless of whether it touches the shipper’s money, an intermediary is a broker if it is paid by any party in the equation to arrange transportation as per 49 CFR 371.2(c): “Brokerage or brokerage service is the arranging of transportation or the physical movement of a motor vehicle or of property. It can be performed on behalf of a motor carrier, consignor, or consignee.” The term “dispatching” is covered within the official FMCSA definition of “motor carrier” at 49 CFR 390.5:
According to the FMCSA; Dispatch Firms are Bona fide agents
Bona fide agents are 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, “A Dispatch Agreement”; precluding the exercise of discretion on the part of the agent in allocating traffic between the carrier and others.
Therefore; Dispatchers are considered an extension of the carriers they are contracted with and are Not Brokers; nor are they Legally bound to have an Authority.