Wednesday, March 19, 2008

Oxygen needed in the system of transactions

Someone said diesel is the lifeblood of ground transportation.

If that’s true, then truckers are the heart. And many are needing life support.

But don’t stop pumping just yet.

The good news is, more and more media are reporting the plight of independent truckers and the fuel cost crisis. The word is getting out in local and national media outlets all over the country. People are starting to notice.

The bad news is, those same stories are predicting that added costs from surcharges will trickle down to the consumers without explaining how brokers are keeping part or all of that additional overhead. They mention nothing about the middlemen who take money intended to pay for ever-rising fuel costs and line their own pockets with it. It’s a stoppage in the flow of transactions that is creating a heart attack in the system. And it’s an exploitation of shippers, truckers and, ultimately, consumers.

It so happens that right now Congress is out of town through March 31 on its annual spring break. Many of your representatives and senators will be in their home states or their home district. This is a good time to call or, better yet, meet face-to-face, and ask them to create a bill that includes a mandatory pass-through of fuel surcharges to the person paying for the fuel, including full disclosure of all fuel surcharge information by everyone involved, including brokers and carriers.

Regardless of your situation, if you’re hanging in there or about to bail, we can agree that in all fairness, the small-business truck driver should not disproportionately bear the brunt of price increases driven by global issues.

With this in mind, instead of shutting down, we need to join the conversation by loudly and clearly asking what can be done about this, while emphasizing how it affects all Americans, not just truckers.

It won’t be easy to fix all of the factors that have put truckers in this predicament. Many of the economic issues that have come together at this time such as U.S. dependency on foreign oil, a tight petroleum market, a slow economy and low freight levels, are all so complex they will require long-term, painstaking solutions.

For the shorter term, we need to find ways to clear out all the processes and procedures in the trucking industry that have allowed brokers to exploit truckers and small businesses. We need to change the dynamics of trucking transactions to ensure that small-business truckers have the same tools available to them that the big companies in the trucking industry have.

We need some breathing room. We need to pump oxygen into the circulatory system by way of transparency and full flow-through in transactions.

You are represented by one person in the U.S. House, and two people in the U.S. Senate. You need to call on all three of them.

Call (202) 224-3121. That’s the U.S. Capitol Switchboard. Give your ZIP code, and the operator can transfer you to the offices of your representative and senators. Staff will be in those offices during the spring break and should be able to tell you how to reach your senator and representatives even when they aren’t in Washington, DC.

11 comments:

  1. A mandatory fuel surcharge isn't going to mean anything if the rest of the rate is meaningless. If a linehaul for a trip is $1000 and the trucker wants a fuel surcharge, the broker can say, linehaul is $800 and fuel surcharge is $200, there you go.

    What we need is full disclosure and open invoices. Who's getting billed would show how many brokers are involved and disclosure of how much the shipper is paying. If a broker wants to charge 10 or 20% show it on the invoice.

    Regulating one part of the invoice with no visibility to the other parts leaves too many loopholes to be exploited.

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  2. Mandatory fuel surcharge and mandatory disclosure, yeah. Would help. We need a bill.

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  3. Brokers have sold out the trucking industry and are collectively taking all the profits from the trucking companies. I believe no company unable to move 20% of the freight they broker be allowed to broker freight.

    Full disclosure on all loads to include brokers fees and fuel surcharges must be disclosed.

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  4. I know the question of how to make a living wage with fuel costing what is does is complex. Looking at the nearly 19% of the survey responses that were either "never looked" or "last year", I have to wonder if those are the folks taking loads at rock bottom rates. They probably don't even know they are loosing money. So, in the grand scheme of disclosure, maybe there needs to be a way to force those guys to look their own books and realize they are hurting everyone by saying yes to ridiculously low rates.

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  5. Full disclosure of all fees from brokers paid by the shipper is needed. Brokers should be required to move no less than 20% of all the freight they broker. Only then will the field be leveled.

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  6. We need to ask ourselves why we need the brokers to begin with. In this day of fast moving technology, internet boards and fax machines, are the brokers really needed? Surely those that need their freight hauled can post to the same boards and deal directly with the company's and owner operators that are hauling their freight.

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  7. What about the cost of tolls included in the consideration? You can no longer justify the extra miles to skip the toll roads and tolls are going to skyrocket. The shipper needs to be paying for that and the broker should have no percentage of it.

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  8. We don't need government help with brokers. We don't need more government interference in this industry, period. Exept maybe to fix some of the things they maeesed up when the deregulated the industry.

    What we need to do, and the only thing that will "fix" any thing and keep brokers "from taking advantage" of small business truckers, is to STOP letting them take advantage of us.

    We are the only ones who can help ourselves. The worst thing that we can do is ask the governement to step in and run our businesses for us.

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  9. Have you noticed, ladies and gentlemen, that the big truck companies aren't squawking AT ALL about the high fuel prices??? It's clear that big business and big trucking are taking this opportunity to "correct what the government messed up when they deregulated the industry". Conway, J.B. Hunt, Schneider, and etc, can survive becdause of the economy of scale if they lose money every day for a year. I, and most of you, won't survive if we lose money for a month. Where's the next truck payment and the next insurance payment going to come from? Even if you have religiously followed the advice of "those who know" amd put back reserves of 3 or even 6 month operating expenses, there's NO WAY that most of us can survive the length of time that it's going to take to make it through the current crisis. And who is going to benefit? Those, obviously, who CAN survive it. My own paradox is that I operate a "boutique" business, and the big companies can't and won't move the freight that I move (cars and such that don't run or don't roll or have unusual dimensions). And as the regulatory pressures increase for small operators, it becomes clear that the industry is experiencing a de facto "re-regulation".

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  10. It doesn't help o/o that some el cheapo loads are snapped up by the larger companies, many of who broker their own loads. I am on a dedicated account to a logistics company/load broker. 3rd party is no fun sometimes, even for us. As for large companies, many have cut back, in some ways, to compensate for increased fuel costs.

    The large company I drive for wants all drivers to follow routing (driving & fuel). It hurts us on dedicated because we use to be able to fill up at any big 5 truck stops w/o penalty. In addition, they want us to reduce idling w/o giving us the means to do it, such as putting in apus or paying for Idleaire. They want us to take cleaning supplies off on our taxes, instead of putting it on our expense report. It is making it rough even for us at times.

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  11. Well I hope you don't mind but I would like to chime in since I am a broker and have been for 20 years. I went from a huge brokerage company to a small one and I can tell you that not all brokers are "stealing" from the drivers. I always took exception to that generalization as I have always prided myself on being a partner with my carriers and treating them honestly. There are more trucking companies ripping off their drivers than there are brokers. Here is something you all should consider. I have a customer that had to open a plant in China in order to compete or they would have had to shut down (80 years in business). The company can ship it's raw materials from Michigan to China and then back to it's customers in the states for less than manufacturing here. We should get our government involved as there is no reason that diesel should be more expensive that gasoline. We should really get involved in fixing the mess that is out international trade agreements. The united States has the biggest buying power in the world and it's time we use it. Soon we could all be out of jobs.

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