Beneficial Ownership Information (BOIR) and Broker Transparency Rule

The Federal Motor Carrier Safety Administration (FMCSA) has introduced the Broker Transparency Rule (Transparency in Property Broker Transactions) to ensure fair and open transactions between brokers and motor carriers. This rule is a direct response to the long-standing grievances of small trucking businesses that have struggled to gain visibility into brokered freight transactions. For years, independent truckers and small carriers have argued that brokers often obscure pricing details, creating an imbalance of power that leaves small businesses at a disadvantage. The FMCSA’s proposal attempts to address this issue by requiring brokers to maintain detailed electronic records of transactions, provide clear documentation of charges and payments, and grant motor carriers access to this information within 48 hours upon request.

On the surface, the FMCSA’s efforts seem like a significant win for small trucking companies. However, without the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements, the effectiveness of the Broker Transparency Rule could be severely undermined. If brokers are allowed to operate through a network of layered corporate entities, they could effectively bypass the FMCSA’s transparency requirements, rendering the rule ineffective and allowing for continued exploitation of small trucking businesses.

How Brokers Could Exploit Corporate Structures to Evade Transparency

A key problem in the trucking industry has been the ability of brokers to establish multiple shell companies to conduct business under different names. Without a requirement to disclose who actually owns or controls these entities, brokers can simply shift their operations from one LLC to another, avoiding oversight and continuing opaque pricing practices. This is precisely where the Beneficial Ownership Information (BOI) rule—as mandated by the Corporate Transparency Act (CTA)—becomes essential.

The CTA, enacted in 2021, requires certain businesses to disclose their ultimate owners to the Financial Crimes Enforcement Network (FinCEN). This measure was designed to combat money laundering, fraud, and the misuse of shell companies. By ensuring that ownership structures are transparent, the CTA helps prevent individuals from setting up layers of anonymous companies to conceal their involvement in financial transactions.

For small trucking companies, this is not just a compliance issue—it’s a critical protection against bad actors in the freight brokerage system. Without BOI enforcement, a broker caught engaging in non-transparent pricing practices could simply dissolve their current company, re-register under a different name, and continue their operations as if nothing had happened. Meanwhile, small carriers—who depend on fair pricing and timely payments—would be left in the dark, unable to hold brokers accountable.

FMCSA’s Transparency Rule Without BOI: A Loophole for Brokers

The FMCSA’s Broker Transparency Rule seeks to introduce record-keeping and disclosure requirements, but it does not currently require brokers to prove ownership across multiple business entities. This is a glaring loophole. If brokers can create a web of layered companies – which many freight brokers already doing, for texation and liabilty reasons, they can circumvent the FMCSA’s efforts by moving operations between different corporate entities as soon as any transparency requirements threaten their profit margins.

This issue becomes even more concerning when considering the recent challenges to BOI enforcement. While the U.S. Supreme Court has upheld the Corporate Transparency Act, there have been delays in enforcement, with the U.S. Treasury suspending the imposition of penalties for companies that fail to report their beneficial ownership information. These delays could empower brokers to maintain their opaque structures while regulators and legislators attempt to navigate the legal landscape of corporate transparency.

The Impact on Small Trucking Businesses

For small trucking companies, the lack of beneficial ownership transparency poses a direct financial threat. Freight brokers serve as intermediaries between shippers and carriers, but when pricing and payments are obscured through complex corporate structures, small carriers are often forced to accept unfair rates, endure delayed payments, or even fall victim to fraudulent brokers who disappear without paying for services rendered.

The current structure of freight brokerage places a disproportionate burden on small trucking businesses. Unlike large fleets, independent owner-operators and small carriers do not have the leverage to negotiate contracts on equal footing with brokers. They rely on transparency to ensure fair compensation for their work. When transparency is absent, small carriers have no recourse but to accept the rates brokers offer—without knowing the true cost that shippers are paying.

Moreover, if a broker defaults on payments, tracking down the responsible entity becomes an uphill battle. With no BOI requirement, carriers may find themselves chasing payments from a dissolved company, while the actual broker has already set up a new LLC under a different name. This cycle perpetuates financial instability for small businesses and further entrenches the imbalance of power between brokers and carriers.

Why BOI Enforcement is Essential for FMCSA’s Rule to Work

For the Broker Transparency Rule to fulfill its intended purpose, it must be complemented by a robust and enforceable BOI requirement. The ability to trace ownership and accountability across corporate entities ensures that brokers cannot evade transparency rules by playing a shell game with LLCs.

By linking BOI enforcement with the FMCSA’s transparency efforts, regulators can:

• Ensure that brokers who engage in unfair or fraudulent practices cannot simply rebrand under a new name.
• Allow motor carriers to trace the true ownership of brokers and hold them accountable for non-payment or deceptive pricing.
• Enhance regulatory enforcement by giving FMCSA and FinCEN the tools needed to track bad actors and prevent repeated violations.
• Create a fairer marketplace where small trucking businesses can compete on equal footing, without being disadvantaged by hidden pricing tactics.

Without strong BOI enforcement, the FMCSA’s Broker Transparency Rule risks becoming a symbolic policy rather than an effective solution. Small trucking companies cannot afford to rely on transparency measures that can be so easily circumvented by brokers who manipulate corporate structures.

Transparency in Name Only?

The FMCSA has taken an important step in addressing long-standing grievances of small carriers by introducing the Broker Transparency Rule. However, without parallel enforcement of the Corporate Transparency Act’s BOI requirements, brokers will continue to exploit corporate loopholes, rendering the FMCSA’s initiative ineffective.

To truly level the playing field, regulators must ensure that both financial and ownership transparency are upheld. Small trucking companies have long been at the mercy of opaque brokerage practices, and without BOI enforcement, the FMCSA’s new rule will do little to change that reality.

For small trucking businesses, this is not just about policy—it’s about economic survival. Without clear ownership disclosure, brokers can continue to obscure pricing, evade accountability, and leave small carriers struggling to stay afloat. The only way to close this loophole is to enforce Beneficial Ownership Information reporting alongside the FMCSA’s transparency measures.

Until that happens, transparency in the freight brokerage industry will remain transparency in name only—and small trucking businesses will continue to bear the brunt of a system that works against them.