• ITVI.USA
    15,487.730
    -50.360
    -0.3%
  • OTRI.USA
    25.300
    0.130
    0.5%
  • OTVI.USA
    15,446.060
    -51.850
    -0.3%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,487.730
    -50.360
    -0.3%
  • OTRI.USA
    25.300
    0.130
    0.5%
  • OTVI.USA
    15,446.060
    -51.850
    -0.3%
  • TLT.USA
    2.720
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.550
    -0.030
    -1.2%
  • TSTOPVRPM.CHIATL
    3.030
    -0.080
    -2.6%
  • TSTOPVRPM.DALLAX
    1.450
    0.150
    11.5%
  • TSTOPVRPM.LAXDAL
    2.910
    -0.030
    -1%
  • TSTOPVRPM.PHLCHI
    1.700
    -0.040
    -2.3%
  • TSTOPVRPM.LAXSEA
    3.020
    -0.010
    -0.3%
  • WAIT.USA
    120.000
    0.000
    0%
Driver issuesNewsTrucking Regulation

Brokers push back against Trump’s price-gouging claims

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.”

Tags

John Gallagher, Washington Correspondent

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.

42 Comments

  1. I, as small carrier, was leaning transparency; but now against. I realized that if all #’s were on rate con’s; that this would create. huge headache between shippers and brokers; since not all brokers get same $$ from shipper; this too is free market; based on performance, etc. And it’s just another hassle in general. I do agree brokers are making MORE than 16%. on spot market, especially during last two months; and would be lots of money on it (average too; not just some rates). I’d guess closer to 25% or more. Back to free market: brokers need to realize that selling $1 freight definitely bankrupts carriers; it’s. happening real time. This results, just like 2014, even last year: over 1000 loads (dry van) where I live (Charlotte, NC) 75mi radius. This means brokers miss out on all kinds of loads; due to lack of capacity. AND brokers margins are cut thin; due to competition with lower priced contracts. This really sucks for brokers and carriers; we allow contracts to dominate; with these HUGE swings in spot; 80cpm now and 300cpm a year ago; back-forth. This DRIVES customers into contract freight; at a higher average price too. I’m not for it; but I can’t help but wonder, IF Trump mandated transparency; if this would temper the lows; which would in turn keep more fleets alive; which in turn tempers the highs; which in turn keeps spot market WAY more competitive vs contract. Someone show Robert Voltmann this sentiment. When brokers use free market beyond sustainability of carriers; yes, it’s free market; but it HURTS brokers too, long term. As small carrier; I can win either way. I’ll sit out the lows; except for a load a month; just to pay insurance. When we see $3 dry van again; I can work overtime; and will. So this isn’t selfish assessment.

    1. For those that don’t see a path to Trump helping truckers; since free market is legal, consider that tariffs (yes we need tariffs) were thought to be impossible via Executive (Trump). But, we have tariffs. Trump likes to identify enemies. Again, with tariffs, US Chamber of Cockroachs; lobbied AGAINST tariffs. Trump gave Chamber the middle finger; and we still have 25% tariffs on lots of stuff (and yes, we need them; that should be obvious to all US citizens). Robert Voltmann, being both head of TIA and member of Chamber; could backfire on brokers. Trump may well see Voltmann as “swamp” just as Trump correctly sees Chamber as swamp. I would not say “we have nothing to worry about; there’s nothing he can do” if I were a broker.” I do feel, if transparency forced; (even though I’m no longer for transparency) that transparency might actually help both brokers and carriers. I wonder if transparency would keep brokers from offering non-sustainable rates during lows; which might keep more carriers alive; which actually helps brokers by having more long term capacity; and therefore lower prices in hot markets, which makes broker / carrier more competitive vs contract carriers than now.

  2. Ok if they arent proce gouging then why have rates fallen instead of stating the same ? No matter how many tricks versus freight rates would be exactly the same if they were being honest.

    1. It was literally in the article, but I’ll make it simple for you- less freight + excess capacity =‘s lower rates its basic economics.

  3. There is no way NOOOOO WAY that brokers should be selling .98cents a mile!!!! They are killing the drivers, who have So many expenses And where diesel has been $2.20 or up a gallon.
    Absolutely ridiculous and demeaning for all the hard working truck drivers.
    President Trump absolutely needs to look into brokers STEALING
    MAKE IT FAIR …

  4. I own and operate a small brokerage company out of Illinois. Many of my air-freight, expedited shipments originate in the south-east, and deliver into that area as well. Over the years I have ALWAYS paid my carriers a fair price for their service. Most owner-operators not only have a truck payment, but a mortgage, home bills and family they are supporting. In return I have developed a loyal
    following of carriers that even at last minute of the day call, will respond and have availability. I have learned over the years that those
    brokers that are short-changing the carriers will eventually run out of support. I KNOW beyond a doubt that no matter how much freight you have, if you don’t have carriers, you don’t have freight. A balance is necessary so that all of us do well. And when you have a shipper that insists you continue to lower their charges, you need to walk a way. Let them buy or rent a truck and move it themselves. JUST SAY NO !

Close