• ITVI.USA
    15,494.200
    152.800
    1%
  • OTRI.USA
    25.070
    0.290
    1.2%
  • OTVI.USA
    15,447.770
    158.270
    1%
  • TLT.USA
    2.700
    0.010
    0.4%
  • 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
    15,494.200
    152.800
    1%
  • OTRI.USA
    25.070
    0.290
    1.2%
  • OTVI.USA
    15,447.770
    158.270
    1%
  • TLT.USA
    2.700
    0.010
    0.4%
  • 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 issuesLogisticsNewsTrucking

TIA’s Voltmann, in video, defends brokers against anger over rates

In an extraordinary video, the head of the largest brokers trade association defended his industry from the online and on-the-highway criticisms from carriers facing increasingly weak freight rates.

Bob Voltmann, president and CEO of the Transportation Intermediaries Association (TIA), took to YouTube with a roughly three-and-a-half-minute video in which he ripped views of the market that “some snake oil salesman would have you believe.”

“There’s a lot being said about truck rates and brokers today,” Voltmann said. “Brokers don’t set prices. The market does.”

The video comes as some small protests by truckers on highways have called for higher trucking rates. In some of those protests, like the one depicted in the picture accompanying this story, brokers have been portrayed as the villain in the plunge in trucking rates. Online, the vilification of brokers in various Facebook groups geared mostly toward drivers has been ramping up considerably.

Voltmann noted that the U.S. has shut down huge portions of its economy as a result of the pandemic. “And since mid-March, rates have plummeted,” he said. “Nobody is getting pre-virus rates.” It is the belief that some people are getting those higher rates that led to his statement about unidentified “snake oil salesmen.”

Much of the online chatter does involve some drivers saying, in essence, just park your trucks and wait for the rates to come back. Voltmann addresses this concept while talking about how rates are set in a market he describes as “huge, fractured and incredibly transparent.”

“Shippers, like all buyers, want to get the lowest price possible,” Voltmann says in the video. 

“They know there is not enough freight to fill all the trucks. Shippers and brokers offer rates to probe the market. Shippers do it to brokers, and brokers do it to carriers.”

If the market doesn’t go through what economists call “clearing” at the numbers in the “probe,” higher numbers will be discussed. “If carriers don’t accept the rate, shippers and brokers will offer higher rates until the load is accepted,” Voltmann said. “That’s the free market economy that allows owner-operators and small carriers to operate.”

In a phone interview with FreightWaves, Voltmann conceded that the video “isn’t the type of thing I normally do. But these are not ordinary times.”

As a result of low rates, Voltmann said smaller carriers, like independent owner-operators or small firms, “are lashing out at my members. I thought this was something that was needed to put out there.” He described his arguments in the video as “economics 101.”

Voltmann also said TIA had been receiving phone calls from their members “looking for positive news or industry things they could point to.”

“Rates are down, margins are down across the board,” he said. “No one in America is fat, dumb and happy right now.”

The irony of the video is that it comes as there are some signs that the market may be turning. According to the weekly data on rates published by SONAR and supplied by Truckstop.com, rates have taken an upturn.

For example, the Dallas to Atlanta lane posted a per-mile rate of $1.55 on March 22. It dropped to $1.15 on April 19 but a week later, in the most recent update, it was $1.30.

Similarly, the Los Angeles to Seattle late was $2.26 per mile on March 22, dropped to $1.57 per mile on April 19 and rose to $1.70 in the most recent update.

Voltmann cited the TIA 3PL market report. He said in the latest edition of that internally generated report, which comes out quarterly, brokers reported their average margin was 16%. “That means that if the shippers pay $1,000 for a load, the brokers keep $160 or 16% to cover their costs in manning a sales force to get the load and find the carrier, and their investment in technology to manage the shipper’s load and their profit,” Voltmann said. 

In the economics of that transaction laid out by the TIA chief, the carrier gets $840, “84 percent of the gross margin to cover their costs of equipment, maintenance and profit.”

“The motor carrier gives up that $160 so they don’t have to have their own sales force and their own investment in technology to manage the shipper’s load,” Voltmann said.

And in a statement sure to spark some friction with carriers who are already angry, Voltmann said there exists a “yin and a yang between the brokers and the carriers. Neither can survive without the other.”

A recent post on the popular Rate Per Mile Masters group on Facebook lays out where the two sides of the debate are coming from. A broker posted a question: “If you feel that you are getting ripped off by the broker then why not go to the shipper and let them know how much their broker is paying you? Ask them if they think the broker is making a fair profit off of them.”

And while there was plenty of grumbling in response to that, but in some cases sort of an agreement, the question was raised about why in a technology age, brokers are even needed — a question that comes up about all middlemen as technology advances. “My question has always been, WHY [his emphasis] do we “need” a middleman eating up double digit amounts of what would have been a fair rate?” one commenter wrote. “In the age of internet, all shippers should be able to post their own loads and pay a carrier directly.”

The full video can be seen here.

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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.

42 Comments

  1. Complete and total LIE! I know for a fact that brokers are taking the fuel stipend that was up before crude prices fell and keeping it at the same rate as before. As a small company owner I negotiate contracts on a 6 month(rarely) and yearly rates. The only change I have experienced is in the frequency of loads and the fuel stipend. The Brokers have the same deal with the exception of the spot market. Not one of my Refrigerated contracts or Flat/Step contracts has come to me and said “hey everybody is hauling for cheaper rates I need to renegotiate the contracts. It just doesn’t happen! And doesn’t happen to any TIA members you big fat liar! Shame on freightwaves for dedicating this much ink to a complete lie. Money rules you too I see!

    1. Save your breath and let’s unite to ask our congressmen to step in and force transparency on the rates. Regulate the broker side of this business, trucker side has regulations on top of regulations, while brokers backstab truckers whenever they have a chance. Seriously, enough is enough!

    2. FW supports this type of rate cutting activity. Just go to the broker update on 04/13 at the 15:00 mark and dude is telling brokers to cut their rates to carriers.
      All of these articles are click bait to generate add revenue, simply read the titles that draw people in and look at all the adds on the pages.

  2. Brokers don’t set the price, the market does…. You get what you pay for dear SIR. When the market rebounds please remember your own words, because truckers will survive and ask the government for real transparency in this business.

    To all truckers, go out and get direct with customers! That is the best option and that will eradicate the thieves that steal your hard-earned money!

    I hope you are held responsible for all the detention money, extra stops, fuel surcharge, and all the other trickery you used to steal money from people. God sees it all!

  3. No need to worry – it will change soon and carriers will go right back to over charging and raping brokers. Its just that time of year…. pandemic or not! Right carriers?

    1. We have a customer, who also brokers through a couple companies freight that we know the contract rates, and to be short, on a lane that pays ~$3000 (plus nice money for detention) the dirtbag broker offered $1000 (saying “Market conditions”) and besides when the truck encounters detentions the broker takes advantage and dumps you. If anyone in this world would calculate the detention time that was unpaid to carriers, that would probably a whole country somewhere in Africa or Asia… So being realistic, brokers need to be transparent and regulated FINALLY! I hope you get a good payback for this type of business! There is only 2 brokers who treat us well today from hundreds we do business with.

      1. As a carrier and driver, you should no accept any load or fret below the market rate. We all understand there’s not enough load in the market for everyone however that does not mean we take loads that do not even cover the expenses. This is why the prices are going down, I’ve been about two weeks and the market rates are very low. I refuse to take these low prices because its not even worth it, i encourage all the driver and other carriers to do the same thing. We have to be united against these greedy brokers.
        Thank You.

    2. eat horse shit steve.. the expense to manage a brokerage is not comparable to managing a truck.. tell me why brokers need to charge me to receive my funding once I drop a load? today you can send money to anyone anywhere for free if you look into it..

  4. Very simple…..Rule #1 regulate brokers………………………….All you need is transparency rules and regulations just like stock market trading rules,laws and regulations.Its called the SEC,so lets get one for the 3pl’s and brokers.Let’s face it there are brokers that gouge and steal accessory charges.This is what needs to be stopped………………..

  5. There’s more hot air in this article than there are at the balloon races every year in New Mexico. should have spent your time talking about something more important like lug nut tightening practices. This guy’s job and importance in the trucking industry is one of those made-up positions so we have somewhere to hang his college degree outside of that he’s a drain on the system he’s a waste of rates going out the window that should be otherwise spent somewhere else like on the trucker who actually doing the physical work. At the end of the day you can sit there and blame the rates on dirty brokers the market or anything else but fact of the matter is the rates shouldn’t get below the cost of actually hauling the freight plus wages of the driver, perfect example of such oil prices people are having to pay other people to hold on to the oil that’s been produced because the rates of the oil has plummeted to the bottom of the barrel but if you go to the pump they’re still getting enough money out of the fuel at the pump to pay the employees that are producing the product and pay taxes on the fuel, You don’t see gas stations giving away gas for less than what it costs to make it and sell it. Someday the FMCSA may actually work for the trucker instead of against him or her because we’re one of the most well-regulated industries out there yet not represented whatsoever, all this complaining it’s the trucker it’s the broker it’s the rates it’s the market nobody takes into a fact it’s a trucker is regulated we have a certain line to haul before we start making money because of the FMCSA and the rules so yes there should be a bare minimum on the rate that it should not sink below just like gas prices you won’t ever see the gas pumps giving the gas away for free. This industry’s gotten real fat and we need to trim some of it start getting rid of people with titles in basket weaving and crap like that and start putting more the money back into the driver’s pocket and this industry will go a lot further down the road and not cost the consumer so much money.

    1. You are right a lot of half truths in this press release. We need minimum rates to the truck all over Canada, U S. Mexico and part of Europe. We have too many trucks and too many truck drivers now in Canada and the U S . Many truck drivers are forced to park trucks and in some cases loose most of they own. This over loaded the homeless shelters in 2009 at a huge cost to the taxpayers in Canada. It would better and cheaper in the long run to set minimum and maximum freight rates range. I have seen many people in wheelchairs because shelters not having the resources to look after homeless people.

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