Freight Rate Transparency War Rages On As Both Sides Make Their Case to U.S. Leaders
Washington D.C. – The war over freight rate transparency is continuing to rage on along numerous fronts as both sides are fiercely making their case to lawmakers.
As our nation and economy continue reeling from the COVID-19 recession, and now made even worse by widespread social upheaval in many of the country’s largest cities, the battle between freight brokers and trucking groups advocating for small business truckers is intensifying.
Transportation Nation Network’s (TNN) recent explosive two-part interview with Robert Voltmann, CEO of the Transportation Intermediaries Association (TIA), appears to have taken the feud to a whole new level.
Voltmann, whose more than 1,700 members include the largest brokerage firms in the space, told TNN the TIA is not going to back down to critics calling for stricter enforcement of the much discussed 49 CFR 371.3.
The TIA has aggressively responded to assertions by groups such as the Owner Operator Independent Driver’s Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) that brokers are “evading” federal requirements.
OOIDA vs. TIA
Last week, Collin Long, OOIDA’s director of government affairs, sent key U.S. lawmakers a letter arguing the TIA is attempting to mislead them on the issue.
“We simply want to ensure compliance with a regulation that requires transparency between brokers and motor carriers,” Long wrote. “The fact is, many truckers have focused on this issue precisely because they understand market conditions well enough to know that some brokers are taking advantage of them.”
Long again outlined OOIDA’s list of solutions which include: providing electronic transmission of records to carriers at the completion of the delivery, prohibiting brokers from including clauses in their contracts with motor carriers that waive the carrier’s right to access those records, and imposing fines on brokers which display a pattern of non-compliance.
TIA wasted no time in firing back.
In a letter sent to Congressional leaders the very next day, Chris Burroughs, TIA’s vice president of government affairs, scorched OOIDA, calling the group’s claims “false, baseless, and outright lies.”
“Throughout TIA’s recent Congressional outreach efforts, we have kept our discussions above the fray, presenting our case and points with market-driven and historical data – not by making ‘misleading’ and condescending remarks as others have alleged (and done themselves),” Burroughs said. “We stick to the facts because the facts speak for itself.”
SBTC vs. TIA
Meanwhile, the SBTC was the first to respond to Voltmann’s revealing TNN interview by calling his arguments “disingenuous.”
In part II, Voltmann discussed why brokers require carriers to waive its rights to review the transaction record and the consequences if Congress disallowed such provisions in contracts with carriers going forward.
“Most shipper contracts today have strict confidentiality rules in them. So, the reason the broker asks the carrier to waive that is because if they don’t waive that right they can’t move that shipper’s freight,” he contended. “If Congress were to come in and say 371 is now mandatory, shippers will stop using brokers. That means all those owner operators are going to have to field their own salesforce. We’ll go out of business. If the brokerage part of the industry disappears, so will the owner operators.”
James Lamb, president of the SBTC, blasted such assertions as fear mongering and offered his solution.
“If you are a broker and your shipper requires confidentiality so that their competitors do not find out what your shipper’s transportation costs are, you simply help your shipper understand that while you will have to comply with 371.3 when your carriers ask, your contract with your carrier will restrict what they can lawfully do with that information,” Lamb wrote in an email to the group’s 15,000 members. “In other words, the broker’s invoice to the shipper will be ‘for your eyes only’ and cannot be divulged to any third party. Presto! Problem solved.”
D.C. Protest Leaders Continue Fighting
Leaders of the recent trucker protest in Washington D.C. are also continuing to fight for legislation to enact new broker reform measures.
C.J. Karman, founder of Ezlogz, was one of two representatives of the D.C. protest that recently met with President Trump’s Chief of Staff, Mark Meadows, and Jim Mullen, Acting Administrator of the Federal Motor Carrier Safety Administration (FMCSA) at the White House last month.
In a letter sent to Meadows last week, Karman outlined numerous recommendations regarding freight broker reforms, including measures to crack down on transparency, alleged collusion, and double-brokering.
Read more on this HERE.
Will FMCSA Enforce 371.3?
For those hopeful the FMCSA might begin enforcing 371.3, those hopes took a bit of a blow last week.
During a webinar hosted by the Intermodal Association of North America (IANA), Acting Administrator Mullen questioned the Agency’s authority to enforce the regulation.
It’s an argument he also reportedly made in the recent White House meeting with Karman and Meadows.
Further, Mullen asserted the Agency has yet to receive a single complaint thus far that a broker has failed to comply with the provision despite asking for them.
Read more of Mullen’s statements HERE.
Karman and others who participated in the recent protest tell TNN they are prepared to return to D.C. if the White House, FMCSA or Congress do not take meaningful action in a timely manner.
TNN will be watching it all very closely and bringing you the latest, so make sure to stay logged on to TransportationNation.com.