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TIA pushes back against ‘ludicrous’ description of freight brokers in David Roush commentary

Calls negative description of freight brokers' role 'ludicrous'

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. 

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Bob Voltmann

Bob Voltmann is president and CEO of the TIA, the voice of the brokerage-based third party logistics industry. TIA is the largest association representing the interests of 3PLs in North America. TIA is also the US member of FIATA, the international organization of associations like TIA with members in every trading country. TIA members control the purchase of more than $100 billion worth of transportation a year.

11 Comments

  1. I really don’t understand why we need Brokers… It would be much easier if carriers would work with shippers and costumers directly..

  2. The TIA CEO is right. New technologies are evening the playing field, making everyone – both big and small – much more efficient. Just 10 years ago only a privileged rich few carriers and brokers had access to decent TMS technology so they could run lean(er). And, shippers leveraged that available technology by partnering with both the brokers and carriers that embraced it to help outsource their transportation department – which was not a core activity for most shippers (and never will be). So, fast forward 10 or 20 years to today and everyone has easy access to logistics technologies like Bringg, AscendTMS, Trucker Tools, Keep Truckin, Triumph Pay etc which lowers the cost for EVERYONE in the chain. Shippers and carriers still use brokers where they fit and they appreciate the added technology as it lowers everyone’s costs and solves increasingly complex problems. Look, brokers and 3PL’s fit an important niche that isn’t going away – and small carriers and shippers probably prefer to work with professional brokers that are members of the TIA as it says something about how they handle themselves as true logistics professionals with long term thinking.

    Most shippers I know use brokers and 3PL’s and stick with the ones that add real value, solutions and technology. Most carriers I know use 3PL’s because they get to deal with industry pros, with freight, that are fast adopters of the technologies described above that make the process faster and easier. So, good, fair, and professional brokers are often the glue that holds everything together – and they receive a fair market based compensation for doing so.

    1. I’m quite sure their fair to them every time I have found out what rate the shipper paid to move the freight and compared it to what cut rate I’m getting paid the broker took between 30-60% of the rate the shipper paid and the shippers wondering why it took them 3 days to find a truck to take it. All the computers and tracking in the world doesn’t justify that kind of margin when trucking companies have far more in overhead costs. Just the insurance on 5 trucks is more then then the full value of the bond most brokers must have and you could buy 50 nice computers for the cost of one truck.

  3. After 30+years as owner operator and dealing with brokers I’ve found out they (some) take advantage of the small carriers because they have to keep moving to pay everybody that’s got their hand out every day going down the road, every state has fuel taxes along with everything else you pay for Everytime you stop along with high insurance, maintenance at 100.+ Hr, parts and tires at all time highs and then what you do manage to net you pay 15 percent for taxes on. While the brokers sat there trying to con you to move otr freight for less than 2.00 mile! When they are getting 2.50.a mile or more. The only fair way would be all freight pays what the national average is on that day for fuel. If fuel national average is 2.65 a gallon that’s what you get per mile. That would do away with alot of brokers and would deal with companies themselves. Back in 50’s and 60’s when my dad was owner operator he was getting.70 cents to 1.00 mile a mile when fuel was ,20 to .30 cents a gallon and there was no word called ; BACKHAUL;!! BACK THEN MEN WOULDN’T PUT UP WITH BEING A TRUCKING PATSY!! ” NO BALLS NO GLORY!”

  4. Most brokers are scummy. Sorry, but it’s the truth. Any Indy that’s run the spot market enough just just how slimy they are. Sounds like the author of this article got paid by TIA and/or is a thieving broker himself.

  5. Why don’t we create a brokerage for the brokers?

    “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”

    With what do they beat the assets with? Their own assets? (great logic, shows a promising future in logistics)

    A lot of brokers in this business aren’t trained nor educated, a lot of brokers finesse their way to shipper and start moving loads that they don’t know how to. My trucks arrive at the shipper to find out that the shipper requested a tailgate dry van with 2 foot e-tracs, I call the broker and he starts googling what E-tracs are, keep in mind this is a registered freight broker in the states. Why do we need more and more intermediates between us and the freight? Especially when the brokers are there for the money and not to actually run a trucking company. Leave the work to the people who do it and stop creating more middleman. Simplicity is key, extra moving parts and mouths to feed only increases the rate for the customer.

  6. Brokers are the lowest form of life they have no skin in the game an control how much the truck an driver’s make. When will we learn to say no to the cheap rates park the trucks an tell the brokers what they are going to pay to have the freight moved.

    1. You’re hauling on a lane for a customer for 2 years. All of a sudden the customer decides to rework their supply chain and source new suppliers. Now the lane has changed and your backhaul doesn’t line up with it. What do you do? There’s dynamics in this industry that drivers/carriers don’t and won’t see. But I agree with you. Many big capital brokers – CH, TQL, Coyote, etc – put words in the driver’s mouths and the driver ends up with a load he didn’t want in the first place. This is why I tell my drivers to stay away from the spot market. Worthless crap where the cheapest brokers try to market the cheapest customer.

  7. Shippers you really need to start working with small carriers and help small businesses in America. It’s such a shame that you are getting lure into these brokers lying to you daily about market rates and lies and lies . I don’t blame brokers as much as these shippers who refuse to work with carriers directly what a shame .

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