OOIDA pushes Congress for full transparency in broker transactions
May 6, 2020
Truckers across the nation have been complaining about ultralow freight rates amid the COVID-19 pandemic. Addressing the issue, the Owner-Operator Independent Drivers Association has sent a letter to Congress, urging for greater transparency in transactions with brokers.
On Wednesday, May 6, OOIDA sent out a letter to members of Congress to address concerns from truckers regarding “feeble rates” and “utter lack of transparency between brokers and motor carriers.”
Per federal regulation 49 CFR 371.3, brokers must keep records of transactions with motor carriers. One subsection of that regulation gives each party to the transaction, including the carriers, the right to review the record. This provision allows truckers to see exactly what their cut is of the full rate that the shipper paid the broker.
Unfortunately, brokers are skirting these transparency regulations, according to OOIDA. In some cases, contracts with brokers waive the requirements set forth in 371.3 regulations.
“OOIDA discourages this, but the practice is so prevalent that truckers often have no other choice if they want to haul a brokered load,” OOIDA President Todd Spencer stated in the letter. “Even many of the most reputable brokers use these clauses to avoid complying with the requirement.”
With brokers that do not waive those requirements, many find other ways to throw roadblocks making it difficult to acquire those records.
According to OOIDA, some brokers only allow carriers to access records at the broker’s office during normal business hours. If a carrier attempts to exert its right to review, many brokers will choose to never contract with that carrier again.
OOIDA offers Congress members two solutions to the problem. First, brokers should be required to immediately provide an electronic copy of each transaction record as required by federal regulations once the contractual service has been completed. Second, brokers should be explicitly prohibited from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required.
“Small business truckers would never get away with blatantly and deliberately evading federal regulations,” Spencer states in the letter. “Brokers must be held to the same standard. Unfortunately, rampant evasion is increasingly resulting in carriers assuming – fairly or not – that brokers have something to hide.”
OOIDA’s letter comes as freight rates have hit historical lows. The national average spot van rate on DAT MembersEdge hovered above $1.50 a mile last week as pricing continued to freefall. Rates for reefer and flatbed loads hit their lowest points since early 2017.
On May 1, dozens of truckers protested in Washington, D.C., complaining about price gouging. As a result, the protest elicited a response from President Donald Trump in a tweet. That same day, OOIDA sent an informational bulletin to its more than 160,000 members warning them of “unscrupulous brokers.”