Representatives of the truck brokerage industry swiftly refuted President Donald Trump’s allegations of price gouging against small-business truck drivers after the President took sides with the drivers on the issue.
Trump, who tweeted his support for the drivers during last week’s “May Day” demonstration rally held by truckers near the White House, maintained that they are being “price gouged” when asked today (May 8) about the allegations – and what he plans to do about it – by a co-host of the television show Fox & Friends.
“All they want is to be treated fairly, and we’re going to treat them fairly. They’re great people, and they’re successful, they have these big beautiful trucks, and they want them made in the USA. They’re not asking for much, so we’re going to take care of them.”
Trump added that he “brought my people out to see them” during last week’s demonstration. “I even brought out some red hats for them,” he said.
The Transportation Intermediaries Association (TIA), which represents brokers and other third-party logistics companies (3PLs), immediately pushed back. “As the President should know, real estate agents don’t determine the sales price of buildings, the market does. The same is true in trucking,” responded TIA President and CEO Robert Voltmann.
Brokers and 3PLs, he said, “are not price-gouging – there is simply not enough freight to support all of the carriers. In this case, we simply aren’t shipping much of anything and there are too many trucks chasing too little freight. TIA welcomes the opportunity to discuss the situation with the Administration, as well as with all parties involved, in a formal setting – not through completely misconstrued and misrepresented statements across social media and other channels.”
Voltmann pointed out in a separate response that his association’s most recent quarterly market report shows that 3PLs are keeping a 16% gross margin for their service and passing on 84% to the carrier.
While President Trump did not provide details on how he planned “to take care” of the trucker’s allegations of price gouging, he’s limited in his options, according to Donald Baker, senior counsel at the law firm Baker & Miller.
“If there’s any hint that the brokers are cooperating with each other, then you’ve got a price-fixing violation,” Baker told FreightWaves. “I don’t think there’s any credible antitrust violation unless they have some evidence of collusion among the brokers.”
Baker, a former head of the Antitrust Division of the U.S. Department of Justice, said the President has the authority to instruct the Justice Department to investigate. “If he were to do that they would look at it, but I don’t see how they would come up with a violation, based on the evidence,” he said.
Pressuring lawmakers to enforce laws already on the books, however, remains an option. The Owner-Operator Independent Drivers Association, which represents small-business truckers, wrote to all 535 members of Congress this week seeking enforcement of a regulation requiring brokers to keep records of transactions with motor carriers.
Those records include compensation paid to the broker, the identity of the payer, and “the amount of any freight charges collected by the broker and the date of payment to the carrier.”
Francis X.
It’s real simple, freight brokerage must be regulated, not trucking!
Must provide complete transactional transparency just like the real estate closing statements. Fee should fixed! If either party books a load and cancels a fee must be paid to the other party and if it is the shippers fault the broker pays!
John
Here is an idea: once you book the load that pays really low, write review on shippers google page how much it paid in detail ( pick up and delivery location, date and who was the broker). Than at least shipper will know how much of it broker is keeping and reply back to your review hiw much they actually paid
Sam
To Chris
It costs you (Brokers) a lot more then it costs carriers. 😅😂🤣😅
Dave
The free market is the free market. It’s not going to change no matter how much anyone cries.
Alex
I’d like brokerages to have high regulations.
Such as not allowing anyone to be able to come and “move freight” without actually knowledge and experience in this industry. A brokerage not to be able to get opened up with $2,000, and just go under bidding every other broker and carrier. Also co brokering should not be allowed.
Otherwise yes allow the market to dictate anything. Besides the update crew, etc anyone in booking loads and trucks should have to be licensed, like real estate agents as used as an example.
Demetreous Brown
I think Brokers should be Mandated to provide US Carriers with the “TRUE” transaction documents as mentioned in 49 CFR 371.3 and harsh penalties for refusing to do so… As well as percentage caps like real estate brokers are currently done.
Besides, lawyers and persons knowledgeable in the law (like myself) knows that the waivers that are currently being included into the Carrier/Broker contracts can be held legally “INVALID” in a Federal Court.
The current Regulation kinda has no teeth whatsoever…
Bill
The analogy of using the real estate market as an example doesn’t compare. The real estate broker has a fixed commission percentage fee (5-6%)regardless of the price. The freight broker attempts to get the biggest spread (fee) the market will allow. I would be happy with a fixed fee for freight brokers, although 16% is excessive.
Debra Goulding
I agree 100% that IS NOT a good analogy, 3pl brokers don’t decide what a shipper is willing to pay but they DO souly determine and HIDE thier CUT
JB Hunt
What do you mean brokers SOLELY decide their cut? The shipper agreeing to pay the broker a price doesn’t help dictate that? How about the carrier AGREEING to haul the load at a fixed price? These are the dumbest arguments I’ve ever heard in my life. Go move to a communist country
Brenda Oles Edenfield
Quantam !!!!!
John
How about leaving the rate at $2 per mile and whoever gets it takes it. You saying carrier agreeing to take cheap rate means he has no choice but take it and pray truck doesn’t brake down and it gets better soon. Companies pay out of their pocket for each mile now just to keep drivers in the seats. So, carriers agreeing to haul cheap freight doesn’t mean its normal. Equipment doesn’t get repaired because they can’t afford it , means roads are less safe. Equipment is not upgraded because of the same reason. Cheap freight makes roads less safe. Think about it
Chris
Why is it excessive? Do you have any idea what it costs to run a brokerage? If you don’t like a brokers price than just go direct to shippers. Stop complaining.
John
Ummm, not even close Chriss. And if we could go directly to the shippers if we could, but you know, there is one thing we are busy doing, we call it driving truck and babysitting your cheap load.
So we really don’t have that much time to go ans make deals with the shippers. Plus your bond doesn’t even cover 1 trucks price
John
And one more thing Chris. In 2018-2019 and crazy winter before that i was nice and friendly with brokers. Tried to help on the rates and capacity, because you brokers were using this “help me out and i’ll get you back on the next load” or “i’ll remember that you helped me” stuff. So pretty much was just tring to be human. What brokers are doing now and the way they talk down to the carriers its just unbelievable. So, market comes back, capacity will be low, we know that, you know that. Guess what, you brokera have made a lot of enemies now. No help whatsoever to the brokers from now
James
We need to shut brokers down.. We have to say enough is enough.. Truckers are bearly surviving and brokers don’t give a f.. There has to be a law for them to! I even bealive some broker companies should end up in court!
Laszlo
Actually, your assumption that real estate brokers operate on a fixed commission. While they do only take 65 that is a self imposed rate brokers take. Do not assume it is a legally capped rate and they can’t go higher. And no, 16% isn’t excessive by any means. Much more than that and it’s definitely not fair to the truck but the average % a brokerage needs to maintain itself is 12-15% so 1 additional percent isn’t going to be an appreciable amount.
The problem is over capacity plan and simple. The rule of supply and demand is in play and those that rushed into the market to buy a truck in 2018 when their buddies were bragging about all the revenue they were making and thought it was going to be like that forever are learning a hard lesson right now thinking they were buying a lifetime paycheck when they jumped in with insufficient knowledge about the industry.
James Bauman dba Kirplopus
I was leaning towards transparency (I’m a small, spot market carrier). I called in live on Keven Rutherford’s show today; Keven convinced me that the free market works just fine. Keven didn’t bring it up, but when I had a change of heart, I realized that, if brokers have to share their profit from shippers; this could also get messy; if some brokers got a better price from the same shipper. So, I agree; keep it simple and unregulated. As carrier, point I take home that we carriers can use these $1.00 rates; show them to shippers; and explain how this ruins capacity; resulting in $3/mi dry van freight later on (upswing). So, instead of regulating ;we carries can USE this info to hopefully gain more direct business.
I will say, regarding above. Voltmann is also member of US Chamber of Cocksuckers. Chamber did not want tariffs; even though “free market” allows China to dominate by cheating. Tariffs ARE necessary and I love them and greatly appreciate them; thank you President Trump. Trump didn’t give a shit about what the Chamber though about tariffs either. So this WILL be interesting. I’d expect some brokers to have their margins examined; whether “correct” to do so or not. We all know that “correct” is not god to Trump (and this was a good thing regarding tariffs; we needed them badly; and swamp tried it’s best to stop tariffs; and lost.
Rico
Kevin is a fool. He’s one of those types who thinks that if he just believes in the free market hard enough, the invisible hand will show up and jerk him off.
The free market doesn’t exist. The government has been having its way with the market since day one. There is no “free market solution” to problems in the real world.