New Article: Fight Over Truck Broker Contracts Awaits Trump's Next Move

There's a new article out from Zerohedge today:

Fight Over Truck Broker Contracts Awaits Trump's Next Move

This is a pretty unusual proposal because, in most industries, businesses negotiate terms privately, and each party tries to secure the best deal for themselves. The specifics of how much profit a middleman makes or the costs they incur are generally considered proprietary information.

Broker Transparency Rule: This rule departs from the norm by proposing that in the trucking industry, brokers must be more open about financial details related to freight transactions.

Owner-operators and small trucking companies believe it's unfair that they're in the dark about how much a broker is earning from a load compared to what they're being paid. They argue that knowing the full financial details would help them negotiate better rates, ensuring they get a fairer share of the revenue.

I asked AI to give us the rundown:

Broker Transparency Rule: What's Up?

The rule seeks to impose new standards on contracts to ensure that carriers have access to crucial rate information, like the total charges and payments associated with the loads they transport. The goal is to create a more level playing field by preventing brokers from hiding or misrepresenting the financial details of transactions, thereby reducing the potential for unsubstantiated charges and fostering trust and fairness in negotiations between carriers and brokers.

The Backstory:

Back in 2020, when truckers lined up their rigs on the National Mall to protest, President Trump took notice. He said on "Fox & Friends," "All they want is to be treated fairly, and we’re going to treat them fairly." But now, years later, we're looking at a rule that could change how we see broker deals.

What's Happening Now:

• The comment period for the FMCSA's Broker Transparency rule ends on Jan. 21, 2025, right after Trump's second inauguration. This rule aims to make it easier for us to see the rates brokers are getting, which could level the playing field.

Highlights from the Article:

• Transparency for Fair Play: OOIDA and the Small Business in Transportation Coalition pushed for this rule to give us clearer insight into freight rates. They're not saying it'll set prices, but it will help us negotiate better, without feeling like we're at a disadvantage.

"We support the free market and are trying to even the playing field so that truckers aren’t systematically negotiating with one hand behind their backs."

"Carriers under financial pressure may feel forced to work longer hours, potentially violating Hours of Service regulations, which directly impacts safety."

"Carriers would see that brokers don’t make much off the load already, and with transparency, it could cause broker rates to fall even more."

"Where does this go from here? Do you move to the ocean industry and start requiring disclosure of ocean freight forwarder rates?"

What's Next?

With Trump back in office, it's anyone's guess what will happen with this rule. Chris Burroughs from the TIA, who represent brokers, says they're unsure where Trump will land on this issue but are working to educate his team.

This is certainly a very hot topic for many of us. I don’t know where it lands but I do know that with the explosion of brokers the last 5-10 years they are not held accountable and some are very corrupt.

I actually have a list of brokers I refuse to work with because of them pulling deceptive practices on and flat lying to me.

I have in the past hung up on more than a few brokers that offered me a very low rate.

I do know brokers would not have done some of the deceptive things they have if the rules were followed, and some parts of their arguement don’t hold water.

This has been around for many years now. The very first thing brokers did was find a legal workaround. They mandate in their contracts for a carrier to waive their right to disclosure. That in the very least suggest to me they are trying to hide something. What only they know for sure but it plants the seed of distrust.

I know for a fact there is a practice within some brokerage’s of negoating a rate with customers and if the broker gets it pulled at a certain rate they kickback funds to the customer. How wide spread this is I don’t know, but I know two seperate brokers that do it. They are also by the way the two same brokers that always have the lowest rates on popular load boards.

One of those two also has a long standing reputation for fraudlent cargo loss claims. They know that normally if a claim is under a certain amount the insurance industry doesn’t question it, they just pay it.

Not only should the insurance industry investigate each and every claim, anything fraudlant found should be prosecuted in federal court.

This happened to me personally on one occassion. The broker didn’t know two key factors. I’m a retired cop and my insurance agent is a retired cop. We both did some digging, then presented our case to the FBI proving as best we could that this broker was working with the customer to defraud the insurance company.

FMCSA has a history of holding carriers to a very high standard, but failing to hold brokers to a similiar standard.

Both carriers and brokers are important to this industry. Each should be held to the same standards. If that had been the case in the past, we would not be in this place now.

We are at a time in the industry where bad actors on both sides have risen to an all time high. This causes unintended consequences for all of us.

The brokers have really been up to some shady business lately. I did a 3rd party backhaul a few years ago where the customer refused the load. Then I started getting phone calls from two different brokers wanting their money. It turned out it was actually a 4th party load.

The load was double brokered with 2 middle men cutting in on the money. We had no clue until there was a problem. There are oftentimes people willing to do a backhaul load cheap just to get their drivers where they need them. The brokers are aware of all this and take advantage of it without much concern for the effect it has on anyone else down the line.