What Every Price Gouging Freight Broker Hopes Truckers Won’t Ask
Little Rock, AR – The old adage, “knowledge is power,” has never been more true than right now, especially when it comes to price gouging freight brokers amid the COVID-19 recession.
In recent weeks, Transportation Nation Network (TNN) has interviewed freight market experts and independent contractors who combined have hundreds of years of trucking experience.
A plethora of important business tips has come from those talks, which TNN will be sharing in the coming days.
However, we quickly discovered that some freight brokers hope independent contractors simply don’t take the time to learn the Federal regulations, especially 49 CFR 371.3.
What Do Price Gouging Freight Brokers Hope You Won’t Ask?
Ask to review the transaction record.
You have a right to know.
Pursuant to 49 CFR 371.3, freight brokers must keep master lists of consignors along with the address and registration number of the carrier for up to three (3) years.
As such, the record must reflect:
1) The name and address of the consignor;
2) The name, address, and registration number of the originating motor carrier;
3) The bill of lading or freight bill number;
4) The amount of compensation received by the broker for the brokerage service performed and the name of the payer;
5) A description of any non-brokerage service performed in connection with each shipment or other activity, the amount of compensation received for the service, and the name of the payer;
6) The amount of any freight charges collected by the broker and the date of payment to the carrier.
Most importantly, 49 CFR 371.3(c) states: “Each party to a brokered transaction has the right to review the record of the transaction required to be kept by these rules.”
Simply put, the broker must provide this information to you on each load you have hauled in the past three (3) years, IF you request it.
A common tactic used by shady brokers is to black ball truckers who ask for this transaction information.
However, if EVERY trucker demanded this information, and thus, brokers knew they were going to be held accountable in the public square (including on social media) in this way, most of the experts TNN spoke with believe it would likely put upward pressure on rate offerings.
Some brokers may still fight such efforts to provide transparency and argue the information is irrelevant since you agreed to haul the load.
Just remember: the broker’s opinion is what is actually irrelevant because IT IS THE LAW.
However, read your contracts carefully because some brokers stipulate you must either waive your right to request the transaction record, or refrain from using the information found in the transaction record in any future third party negotiations.
The brokers that insist on requiring you to agree to these terms contend they are doing so in order to protect their “trade secrets.”
If you agree to such provisions, at least be aware you are doing so.