OOIDA sets sights on unscrupulous brokers

May 1, 2020

Mark Schremmer

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Discussing the historically low freight rates facing the trucking industry, OOIDA advised its members to be leery of unscrupulous brokers, to avoid cheap freight, and to file a complaint regarding any issues with brokers.

OOIDA sent an informational bulletin to its more than 160,000 members on Friday, May 1. Consumer panic led to a strong market in March, but those numbers dipped sharply in April. According to DAT Solutions, reefer rates in April fell to the lowest level in five years.

The Association is taking aim at unscrupulous brokers by working with Congress and FMCSA to close loopholes in regulations and by urging drivers to file complaints.

No to cheap freight

“We are aware that freight rates are at historic lows,” OOIDA wrote in a letter signed by Executive Vice President Lewie Pugh. “Trucking has often suffered from chronic overcapacity­ – ­too many trucks and trailers and not enough freight. The resulting market conditions are magnified right now. While there is no quick or easy solution, hauling cheap freight is not a viable or sustainable approach, and we strongly advise against it ­-­ just as we always have.”

OOIDA said it also is continuing to work with the Federal Motor Carrier Safety Administration and Congress to prevent brokers and shippers from exploiting truckers during the COVID-19 pandemic.

“We also realize some brokers and shippers are exploiting the ongoing crisis,” OOIDA wrote. “While federal regulations require brokers to be transparent about certain rate information, there are far too many loopholes that effectively undermine the regulations. We continue to work with FMCSA and Congress to require additional transparency and close as many loopholes as possible. Unfortunately, this will not provide any immediate relief.”

Unscrupulous brokers

The Association urges truck drivers to be cautious before taking loads for brokers they haven’t worked with before.

“Especially during times like this, some unscrupulous brokers have no intention of ever paying carriers and drivers for the services they provide,” OOIDA wrote. “When someone files a claim against the bond, the result is usually a payment of pennies on the dollar or maybe nothing at all. We refer to this issue as “broker bond” and have been trying to get FMCSA and Congress to remedy it for nearly a decade.”

In 2018, OOIDA supported an FMCSA advance notice of proposed rulemaking to update its broker security regulations.

“OOIDA is grateful that FMCSA has taken the initiative to bring long-needed improvements to the broker financial security rules,” OOIDA wrote in November 2018. “If the final rules produce clear and effective steps for the resolution of motor carrier claims against a bond or trust, then disputes between motor carriers and sureties will be reduced. There will be less need for litigation, and the economic health of the broker/motor carrier component of the transportation industry will be stronger.

“Most importantly, the small-business men and women motor carriers who rely upon brokers will be relieved from so many significant financial claims by both brokers and their bonds or trusts.”

How to file a complaint

OOIDA encourages truckers who have issues with a broker to file a complaint with FMCSA’s National Consumer Complaint Database.

“While the NCCDB is far from perfect, we need complaints filed because it helps us show just how broken it is and might hopefully lead to meaningful changes,” OOIDA wrote. “If you do file a complaint, you should also forward a copy to your lawmakers and OOIDA via questions@ooida.com.”

Mark Schremmer

Mark Schremmer, senior editor, joined Land Line in 2015. An award-winning journalist and former assistant news editor at The Topeka Capital-Journal, he brings fresh ideas, solid reporting skills, and more than two decades of journalism experience to our staff.