Tuesday, November 25, 2008

Thumbs up for transparency

Mike Goldberg couldn’t decide if he was more disgusted at the federal government or at his broker.

Goldberg – an OOIDA member who runs a fleet out of Cincinnati, OH – had recently booked a load to haul about 1,500 pounds of landing gear from Maryland with stops in Arizona, ending up in California. The shipper – the Department of Defense – was paying a broker, who in turn paid Goldberg’s 247 Trucking Company $2,500.

Goldberg was happy with the $2,500, a fair rate he believed for hauling 10 feet worth of freight on a flatbed.

Then he saw the bill of lading.

The shipper – the U.S. Department of Defense – was paying the broker $6,000 – which Goldberg considered a waste of taxpayer money and a boon to brokers.

“I’m just so angry with the government paying somebody like this,” Goldberg told me. “The brokers shouldn’t even have this opportunity. The same is true with trucking companies. We’re ripping ourselves off; this is our money.”

The Owner-Operator Independent Drivers Association worked closely with bill sponsors in writing and educating other lawmakers on the “Truth in Reliable Understanding of Consumer Costs Act,” or TRUCC Act, which would require a 100 percent pass-through of fuel surcharges paid by the shipper to go to the person paying for fuel and would support total transparency between brokers and small business truckers.

Goldberg already has contacted Sen. Sherrod Brown, D-OH, who has supported several owner-operator issues and who has been quoted repeatedly in Land Line.

Brown, in fact, has taken a strong interest in transparency in trucking, as seen here and here.

In addition, OOIDA Executive Vice President Todd Spencer was scheduled to discuss transparency in trucking when he met with President-Elect Barack Obama’s transition team in Chicago on Monday, Nov. 24.

Stay tuned.

11 comments:

  1. Will be happy to see transparency in brokers revenue. As you call one broker and get one price and state you can't do it for that and then they say what will you need and agree to the higher price. If you took it at the cheap rate the difference would go into his pocket. The same with surcharge.

    ALIBABA 1

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  2. OK, say we now have transparency and you can see what the broker is getting paid. What does this mean? Does it mean that you get to decide how much the broker gets to make? Is 50% OK? Or is it 10% that you think is OK.

    Now let us carry this to the shipper. The shipper gets to see what everyone along the way is getting paid. Now the shipper gets to decide how much you make as the operator of the transportation device used for delivery (trucker). How much is OK for you? Is it 50% or is it 10%?

    See where this leads? Someone somewhere decides how much you and everybody else can make. This is not free enterprise. If the owner/operator that delivered the landing gear was happy with $2,500 then that is what he charges. To have sour grapes because the broker charged $6,000 and made more money than the driver is just too bad. He should have charged more. Or how about getting into the broker business and making more money that way. That is free enterprise!

    Anything else is some form of Socialism.

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  3. David, you are very close to understanding the point of this legislation. Except you are wrong to assume OOIDA wants the government to mandate rates and percentages as to who collects how much.

    The point of transparency in trucking transactions is to give the trucker -- the person who does the lion's share of the work -- the ability to negotiate and fair rate for themselves.

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  4. Transparency would offer more competition between BROKERS which, since the internet boom, has completely disappeared.

    I don't see how this ACT would eliminate "Free Enterprise" - it's very simple - if YOU as the BROKER want a bigger cut, then you'll need to get more money from the customers. If the customers don't want to pay, and you can't move the freight for the price they're offering then you'll need to find NEW customers, won't you...

    Right now, brokers are dictating freight rates, not the trucks or the customers...so I'm sorry if passing this ACT means that you will actually have to WORK for your money like us "Sour" faced truckers.

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  5. Jami, I agree in principle with the part of the legislation that fuel surcharges should go to the party that buys the fuel. However, too much legislation in these business transactions does lead to more and more legislation. Then it leads to more because we need to make it fair for the shipper and round and round we go....

    I would disagree that the trucker is the person who does the lion's share of the work. The trucker does do more of the actual manual labor of moving the product. However, setting up a good brokerage business, establishing a place to do business, building contacts with shippers, nurturing these contacts, making a sale, establishing contacts with truckers, nurturing these contacts, negotiating transportation services, etc., etc. Seems to me to be a bit of work. Different kind of work from that of the trucker but work non-the-less.

    Please note that I am not a broker - never been one and don't want to be one. I am an out of work driver.

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  6. We transport cars only. We are always at the mercy of the broker. Costomers shop multiple brokers for the cheapest rate. Brokers use sales people who have no idea of where a car picks up or drops. They go by miles only.

    With the recent price drop in fuel we see cars as cheap as ten cents a mile now.

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  7. Oh, Oh, somebody threw that socialism word out again. You guys need to quit listening to too much talk radio and learn to think for yourselves.Transparency has nothing to do with socialism.. EITHER way somebody decides how much you'll make.EVEN if you make the decision...

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  8. I'm a traffic manager and use a few brokers.

    There's something to be said about the original charge here.... I don't know what was transported, or its value, but it seems to me that 6 grand is outrageous for that small a shipment. Perhaps the person at the Defense Dept. who hired the truck didn't know much... or didn't care.
    That being said, if I was the trucker hauling it, and found out the difference, I'd be extremely irked. I believe I'd let other truckers know who the broker was who made so much money on that one haul, too. But, again, I don't know the particular piece of landing gear or its value and it may be that the shipper paid extra for additional insurance....

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  9. And David says he's not a broker? I must have read that wrong!?! Brokers are always ripping us off. If you tell them you can't do it for their price, they just tell you they can't go any higher (even though someone else has the same thing at a higher price) and they'll find someone else to do it. When a broker does things illegaly, no one but us cares. There is no recourse. FMCSA, DOT, etc. wont' do anything about it. If nothing else, these brokers need to have someone looking over them and their practices that will actually take action against them. Brokers should also have to carry a much higher bond. I'm tired of not getting paid. Just had it happen again, and with only a small bond like they have, it was already used up! If nothing else, brokers should just get a flat percentage across the board for all their loads, say 10%, and have to show us all the paperwork to prove it. I know we're all tired of getting the raw end of the deal!

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  10. We have found most brookers take 15% to 40%.. Fuel has dropped about $1 and most brokers went back to paying $1.25 a mile, all of our shippers are still at $2 a mile. Fuel surcharge?? how much and where do you start it? that's just playing with numbers.
    If you want to help the trucking industry the feds need to require full disclosure on the BOL that way the shipper knows what the truck got paid and the truck know's what the broker took. Then we can quit using the crooked brokers.
    cmc002@hotmail.com

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  11. David - I must have missed or misunderstood something... "Now let us carry this to the shipper. The shipper gets to see what everyone along the way is getting paid."
    We're the shipper, 3rd party, and maybe that makes the big difference - we just arrange the shipping to our customer and pay the freight bill. I don't know how much the few brokers I use pay the ones they broker a load to or what they pass along in fuel surcharge. We pay the fsc without protest because we can see what's being charged for fuel and it's only fair (though now it should be coming down a whole lot more than some carriers seem to!)

    Does this new legislation mean that we'll know what the broker is going to pay the brokeree in wages and in fuel surcharge?

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