Bob Voltmann, president and CEO of the Transportation Intermediaries Association, responded to commentary by independent writer David Roush with the following:
See original David Roush commentary here
On May 27, Mr. David Roush published an article on [Freightwaves.com] titled “Where’s ‘my’ freight?” He describes a rapidly changing market that has upset routing guides as rates decline from historic highs in 2018. Mr. Roush is correct that market conditions can change rapidly. He is correct that shippers generally have market power and exercise it. His negative description of the role freight brokers play in freight transportation, his broad-brush statements about safety, and small carriers are, however, ludicrous.
His inference that shippers’ due diligence of carriers is superior to that of freight brokers ignores the tens of millions of dollars TIA members spend in technology and employees establishing consistent and thorough carrier vetting processes. Overlooked is the fact that shippers routinely provide exceptions to their own due diligence processes when a favored carrier falls out of established standards of either safety or quality. In addition, Mr. Roush’s suggests that shippers should establish Provider of Choice reports. I agree, because I know that TIA members routinely beat their asset-based competition in quality, rate, and other metrics when they are established and monitored. Our members are always up for the challenge of fair competition!
While Mr. Roush laments that freight rates and routing guides are frequently renegotiated in response to market conditions and not necessarily contracted dates, he conveniently forgets to mention that merely one year ago, it was carriers at the top of routing guides routinely rejecting tenders because they would or could not honor their own service commitments while enjoying inflated spot market success. As industry veterans know, that market will return at some point in the future, so we look forward to Mr. Roush’s advice for carriers who wish to raise rates before a contract period has ended in response to the market when it does turn. While he does not state so, Mr. Roush seems to pine for period when rates were established by tariff and locked in. Congress rejected that notion with the Motor Carrier Act of 1980 creating the world’s most dynamic and efficient transportation system.
Mr. Roush’s assertion that “muted freight rates since deregulation” can be attributed primarily to shippers using brokers to engage small carriers is massively simplistic and misleading. It ignores global economic trends in manufacturing and distribution, consumption and wage stagnation across the U.S. middle class, regulatory changes from FMCSA, and massive increases in productivity and market visibility facilitated by technology.
Nearly 90 percent of trucking capacity in the United States is held by trucking companies with 50 or fewer trucks. Mr. Roush’s description that a small carrier does not have the sales force of a large carrier to “attract the attention of major shippers” is clearly meant to demean the small carrier as inferior, when the reality is that trucking has become a tremendous small business success story. Technology has leveled the playing field for carriers of all sizes and it is often the smaller carriers who have embraced the new environment with zeal and grown as a result.
Finally, and most gratuitously, Mr. Roush assumes that shippers would not directly engage small carriers themselves by choice. This is patently false and condescending to the thousands of professional small carriers in the marketplace. TIA members know that shippers want to engage the qualified available capacity in the marketplace and not be held captive to any portion of the marketplace, small or large carriers.