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    -0.8%
  • OTVI.USA
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    -26.570
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  • TLT.USA
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    -4.4%
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    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
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    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
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  • WAIT.USA
    139.000
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Driver issuesNewsTrucking Regulation

Owner-operators seek DOT enforcement of broker regulations

Owner-operators have stepped up their fight for greater broker transparency by formally petitioning the Trump Administration to levy fines on brokers for non-compliance.

“Brokers have been deliberately skirting federal transparency regulations for decades,” said Owner-Operator Independent Drivers Association (OOIDA) President and CEO Todd Spencer. “We certainly don’t think exempting yourself from federal regulations is legal, but this is precisely what is happening. It has to stop.”

A source familiar with the matter speaking on background told FreightWaves that Federal Motor Carrier Safety Administration (FMCSA) Acting Administrator Jim Mullen was scheduled to meet with White House officials to discuss the issue on May 20. The U.S. Department of Transportation (DOT) did not immediately respond to confirm the meeting.

In a May 19 letter addressed to Mullen and DOT Secretary Elaine Chao, OOIDA petitioned FMCSA for two provisions: require brokers to automatically provide an electronic copy of each transaction record within 48 hours after service is completed; and prohibit brokers “from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required by 49 CFR §371.3.”

OOIDA made a similar request to all 535 members of Congress earlier this month. In its petition to DOT and FMCSA, OOIDA is also requesting that the administration add teeth to its enforcement measures.

“In order to dissuade brokers from knowingly skirting these regulations, FMCSA must levy and enforce a structured fine system that would penalize non-compliance,” the letter states.

“Furthermore, FMCSA must suspend or revoke the authority of unscrupulous brokers that exhibit a pattern of noncompliance. We believe this would improve transparency between brokers and carriers” as intended by the law. With rates on the decline, many truckers are concerned they’re the only ones feeling the pain – or at least feeling a disproportionate share of the pain. This will not change until federal regulators enhance and enforce the broker transparency regulations.”

OOIDA pointed out in the petition that it has “long pushed” for greater broker transparency. However, downward pressure on rates exerted by the effects of COVID-19 led owner-operators to take their case to Washington, D.C., including an ongoing demonstration within sight of the White House that caught the attention of President Donald Trump.

The Transportation Intermediaries Association (TIA), which represents brokers, denies assertions of price-gouging – one of the allegations from the demonstrators – pointing out that “there is simply not enough freight to support all of the carriers,” TIA President and CEO Robert Voltmann has asserted. Following President Trump’s recent tweet alleging broker price gouging, TIA said it was willing to formally discuss the situation with the Administration. 

In first-quarter performance measures released on May 18, TIA reported total broker and 3PL shipments from members declined 3.4% to 1.33 million compared with the same period in 2019. Total revenue declined 8.5% to $2.6 million, and gross margins dropped from 17.5% to 15.8%.

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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.

66 Comments

  1. If the claim is there is not enough freight then that does not mean rates have to go down. Just because there is less freight doesn’t make it any less expensive to move something from point a to point b. Oversize loads are paying less than $2 a mile. You had added fuel cost and permit fees. You’re losing money taking the load. But you’re forced to take the load to keep the insurance up trailer rent and last months fuel bill. Catch a break down and you are negative in large numbers.

    1. Fsc works much better for OwnerOperators when it is increasing, especially for efficient operators, when it goes down it reverses the trend and those who don’t get good mpg are hurt more. Basically rising fsc actually outpaces increased fuel cost so it becomes profitable which is fine until fsc reverses and the you pay back the excesses you have been receiving. FSC for many has dropped by1/3 which shows up in decreased rates that have nothing to do with freight demands or shipper rate negotiation. Also when there is not enough freight the truckers that need a lane, call it backhaul or “get home” or just a direction, it is the truckers that drive the rate down outbidding their fellow truckers causing competition against each other.
      Most owner operators appreciate “good brokers” for helping with their business. If an Independent or small fleet operator really wants to make progress he will strive to have his own direct shippers. To get there you will be more successful if you can hire yourself a salesperson to call on target accounts that fit your system, works just fine if you’ve got a good salesman. Issue is you can’t afford one, a broker at 15% will be much cheaper making sales calls for your operation than hiring or attempting to do sales from behind the steering wheel. Good brokers will help you until you reach the size of operation that can afford a sales team! After that they will be there to help fill holes!

  2. I haven’t found anyone that was transparent on the bill of ladings as to what is being paid and what is not being paid we never even as a percentage paid
    contractor we never know what we’re getting we just have to take the word of The company or broker . it is always some generated contract that they draw up but never showing the actual payment that the shipper paid so what are we really getting percentage of their thoughts this industry has taken too many drivers for granted all because they have all these are high paid lawyers on their side and they can bend the rules and regulations and feel like there because the competition is so great they can always get another one in the door they heard us in like cattle. all we want is to be fair if you said 65% of the gross show us what the gross really is.

  3. Well You going to have have complete transparency from shipper to comsummer, if you are going to help rates. A very large majority of freight is double brokerd from organization to organization, by the time the agent or nieve broker gets it, there no profit for anybody. This is created deliberate to keep rates down, keep the trucking industry in a state constant economic ” scarcity”. At the same time there are no regulations of freight marketing, so shippers and brokers post many more load than they really have, to keep the illusion of demand going. The top 100 logistics companies also put as many agents out there as they can, most are fighting over the same freight. It really is quite a racket. Good luck getting any help from Elaine Chao and her husband, this is just good business to the deep south republicans, the President thinks trucker protest is a campaign rally!
    Maybe things would change if the contractor or farmer discovered they paid $10’000 to move a 10′ wide piece of equipment, while the trucker only got $4500, maybe nobody cares either! I acknowledge there a lot of bad actors, operating as brokers, but the system created by FMCSA and their cronies in congress, and their lobbyist, have made it this way! The so called logistics and transportation wizards out there are clueless to how the system really works, There are experts on trucker magazines like “Overdrive” who actually promote their own demise, transparency between end users will do nothing, you can do that any way, never had a broker refuse, what you get will be either completely honest, because the broker is just one of many middle men, or it will be completely made up, and you can’t prove other wise. The average broker that small independents deal with are just marketing the freight, they barely a level above the carrier in the Patron-client , pyramid scam. This was all deliberately created long time a ago during the Carter Administration, and congress and big business is very happy with it. This ” system” put way to many truck on the road, causing safety issues, but the FMCSA dose not want to admit that! They also don’t want to admit that the carrier and the driver are held accountable by law, for most of the logistic mistakes caused by the brokers and shippers! ( I bet there a 95% chance freight waves censores this)

  4. O/O hire your own salesman to find you loads or quit bitching, lot more work behind the scenes of a broker that you are giving credit to. simple fix either hire someone to find you loads or pay a broker either way you are paying extra to keep your truck moving

  5. The way I see it is if they have nothing to hide then what is the problem. The brokers are fighting the claims because they know they are doing wrong

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