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OOIDA asks Congress to mandate brokers supply deal data to carriers

Image: Jim Allen/FreightWaves

The continuing anger on the part of independent owner-operators targeting the broker community for low trucking rates has now led to the owner-operators’ trade group asking Congress to amend a current federal law governing broker-carrier relations.

In a letter sent Wednesday to all 535 members of Congress, Todd Spencer, the president and CEO of the Owner-Operator Independent Drivers Association, asked for what the organization called “two simple solutions” to federal regulations under title 49, section 371.3 of federal law. 

At present, 371.3 “require(s) brokers to keep records of transactions with motor carriers,” Spencer said in his letter. And in fact, the title of the section in question is “Records to be kept by brokers.”

In those records, according to the statute, brokers need to keep a long list of information that they would presumably keep even in the absence of federal law: information on the name of the carrier, the bill of lading and so on. But it also requires a detailed list of other financial and service functions, including the 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.”

The law also says each party to the transaction has the right to review all the records. 

But the reality, according to OOIDA, is that the exchange of information doesn’t happen much. Many of the contracts signed by carriers include a clause waiving the right under 371.3. OOIDA concedes that it discourages its members from signing for that provision, “but the practice is so prevalent that truckers often have no other choice if they want to haul a brokered load.”


OOIDA is not the only entity that agrees information is rarely transferred through a 371.3 request. As one former broker said, “I didn’t even know that was a law.”

From a more formal voice, Bob Voltmann, the president and CEO of the Transportation Intermediaries Association, agreed requests under the law are rare. “I spoke with a member today who said that in 27 years of business that they have never been asked for this information,” he said in an email to FreightWaves.

The OOIDA letter also cites a clause that it says comes from an unidentified broker that it describes as one of the biggest in the country. The clause states that the carrier can’t demand to see commissions.

The broker “shall not be required to disclose the amount of its broker’s commission to Carrier, and Carrier expressly waives its right to receive and review information, including broker’s commission information, pursuant to 49 CFR §371.3,” according to the clause cited by OOIDA.

If a broker does allow the records to be seen, there are plenty of hurdles to that happening, including requirements that they be viewed at a broker’s facility during office hours. 

And then there’s the blacklist problem, according to OOIDA: “When a carrier tries to assert his/her right to review this information, the broker is unlikely to contract with them again.”

OOIDA’s “two simple solutions” are that brokers should be required to “immediately” provide an electronic copy of all transactions. “No exceptions,” the letter says. “This would allow carriers to identify brokers who truly are taking advantage of them during the crisis as well as after it,” Spencer adds in the letter.

It also asks for banning brokers putting in their contracts any waiving of drivers’ rights under 371.3.

Carriers are feeling “a disproportionate amount of the pain” in the current market. “This will not change until Congress addresses the widespread evasion of 49 CFR 371.3,” Spencer says.

Asked if OOIDA had brought up these recommendations previously, Norita Taylor, an OOIDA spokeswoman, said the group “[has] a long history of bringing up issues regarding brokers.

We plan to continue pursuing the issue of transparency.”

Voltmann, in his email, pushed back against the idea of carriers needing the information that presumably would be in the data automatically passed on to carriers. “Do you really need to know exactly what the car dealer paid for the car you bought?” he asked. “ Or do you do your homework and buy the car for a price you think is fair?  And, secondly, what are they going to do with it? Are they going to highlight the loads in which the broker loses money to keep the shipper happy? No, they are going to look for the examples where the broker made a better than average margin and splash them all over the internet. It will be sensational, but should business men and women deal with others professionally or sensationally?“

Voltmann recently stepped into the growing small carrier vitriol against brokers by posting an unusually blunt video defending his industry.

A recent demonstration in Washington by angry truck drivers did get the attention of President Donald Trump, who tweeted out his general support of the industry.

29 Comments

  1. D Allan trucking

    These load brokers have been a cancer of the trucking industry for years!! Unfortunately these big company’s have downsized there’s logistics dept and love the one call does it all that these load brokers impress upon them!! And in a world that has become as long as it doesn’t affect me it’s all good we are suffering from these ways!! It should be full transparency to everyone involved with moving these loads and the fact they put a clause in for you to waive your rights should be the only red flag needed to stop this action by them!! This attitude that there doing us a favour giving us a load needs to stop! We have a major investment more so than them!!! I am not sure how things got turned around that we need them instead of they need us we have the equipment to do the job they have a desk and a computer they can’t haul the load they can’t load the load with out us the trucker!! Let’s get this fixed!!

  2. StevenJ

    I don’t have a problem with transparency. I want brokers to make money, they also have a lot of expenses. They are the salesforce for our backhaul freight.
    Requiring they not only to comply with the law, but not retaliate against those who request they follow the law, seems like common sense to me. In fact, it should never be legal to put into a contract, a right for you to violate a law that is on the books due to abuses of your industry in the past. The fact that one would put that in their contract indicates their intention of operating in an unethical manner. This would help clean up the broker industry, as well as moderate the market.

  3. CM Evans

    Although I don’t disagree w/greater transparency let’s think for a moment how this will play out when rates swing the other direction. First off the law(s) cited in the article were written for a reason and if the brokers are going around them again there’s a reason for them to do so to their benefit. Secondly most truck owners are free market minded and don’t care if brokers make a profit as long as they hit profitable numbers to grow their business. It used to be that brokers didn’t share these rates so that others wouldn’t poach the customer w/lower rates. Perhaps the original law(s) are reviewed for the current environment and if there’s a concern for non compete address that concern. It seems to me both parties could operate profitably w/out the huge swings in revenue as the market cycles up/down w/a reasonable amount of transparency.

    Next is the market itself contract/spot, the larger carriers are silent through this because it doesn’t affect them to a great degree. These guys are successful at sitting down w/customers and negotiating a rate that is reasonable to operate w/in a specific lane as should be the case with carriers/brokers. It used to be that the spot market was primarily produce and other commodities that would spike the market w/overflows now and then. These Independents would follow the produce season planning for highs/lows making money in the good times and saving for the lows.

    As the macro economy/industry has grown both greater numbers of brokers/carriers have entered the marketplace. Unfortunately many of the truck owners jumped in w/little to no knowledge and equally little to no cash to operate successfully. The majority are new to the industry as company drivers and some new to the country as immigrants. Both of these groups are accustomed to employers or governments that provide a level of security and certainty but to go into business for ones self neither of those are a luxury. No business start up regardless it’s role in the economy is guaranteed not to fail.
    These truck owners are hurting themselves and the market in aggregate. they are hurting themselves by delaying the process of rebuilding their lives/starting over and hurting the marketplace by artificially holding down the rates for experienced Independent business owners who have planned for and saved for this down cycle. Additional funding from the government isn’t going to save the operators only prolong the length of this down cycle in the spot market. If your a truck owner and unable to realistically see a way forward in 30 days the best thing to do is exit the market and begin the rebuilding process. Hauling for low rates will not help you and neither will large amounts of credit debt, this will only escalate the inevitable at a rapid pace.
    The sooner you begin this process the sooner you’ll begin to see new opportunities in the market and more importantly begin the path of personal growth gained through adversity. You’ll be better prepared to weather the next down cycle and trucking will be here when your ready to apply the lessons learned from this life experience.

  4. John D Johnson

    #TRANSPARENCY NOW! Before there are no owner operators left. This will leave only company drivers making minimum wage.

  5. Carlos Morales

    It is impossible to run a legal profitable business when you work with crooks, liers an thief’s hiding all transactions!!!
    I am a living proof that “TQL” keeps over half the profit from customer fees!!!
    65 an 70%, it’s impossible to run a truck with the remaining fare!!!!

  6. Ben

    This just goes to show you how many people own trucks and are clueless how to run a business.
    Go back to being a company driver. You clearly don’t have any interest in running a business.

  7. Jay

    This is really very simple. If the brokers don’t have anything to hide, then why are they doing it? And, to me, it is also shameful at some point that many shippers don’t care how much a carrier or driver make as long as it gets done for the cheapest price possible. Then they wash their hands of it by giving it to a broker to do and now that’s out of sight and mind. As long as it is delivered, who cares that the broker keeps as much as possible and the amount paid to the carrier doesn’t pay enough to keep a truck safe and pay a driver a living wage? Transparency of the information can be claimed as necessary for national security sake and for safety in general. As seen in recent times, transportation of goods cannot be hindered and if it is, the health of our nation is at risk.

  8. Ziff

    The only way we will get transparency is if shippers are required to put the rate paid on the bills like its required on Govt loads. Mandating brokers to provide it while allowing them to create hoops to jump through or allowing them to force companies to sign away their rights to get a load will never work. There are enough companies hauling broker freight they will simply bbn lack list and roll on if the rate is on the bills everyone knows what is going on as long as the shippers are required to put the contracted rate.

Comments are closed.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.