The broker-carrier relationship
November 4, 2021
The working relationship between a broker and a carrier can be a complicated matter, but it doesn’t necessarily have to be.
To help clear the air a bit, “Live From Exit 24” host Mike Matousek and OOIDA Executive Vice President Lewie Pugh were joined by Ken Lund, vice president of logistics from the Allen Lund Co., a national transportation brokerage firm, on the Nov. 3 show.
“Truckers and brokers don’t often have the best rapport with one another,” Pugh said. “Everybody messes up once in a while. Sometimes we don’t get along because we don’t even understand what the other is doing. And that’s why Ken agreed to come on and give the broker perspective. My hat’s off to him for doing this.”
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“We’ve really tried to fight on behalf of the carriers especially,” Lund said. “You can’t regulate all the trucks from existence. The people in California need food and products as well. With what’s going on at the ports now, we’ve been pushing those kind of issues for years. Now you just have all the photographs or videos of all those ships out in the ocean. A lot of that is overregulation.”
In addition to supply chain and a whole host of issues, COVID-19 exacerbated the use of contracted rates, which is common practice for brokers today.
“It was a tough time because no one knew what was going to happen – the rates just crashed,” Lund said. “25 years ago, there were very few contracted rates. Now, a lot of what brokers have to do is put in year-round or quarterly rates. So when the rates shoot back up we’ll go upside down on a lot of the rates. That becomes a strain on the relationship with the shipper. We can weather that for a while, but not for an entire quarter or six months. At the same time, the drivers couldn’t go into restaurants or get food. A silver lining was people realized how important drivers and all those involved in the supply chain are.”
In terms of broker transparency, a topic the last time “Live From Exit 24” broached broker-related issues, Lund said the Allen Lund Co. adheres to the requirements and will provide requested information.
“As a company, we’ve said we’ll give that information, but you have to call in and talk to us,” Lund said. “The reason we want that is because it gives us a chance to better explain the situation and provide context.”
Another factor in transparency is that brokers sign nondisclosure agreements when entering into a contract with large shippers, Lund said.
“It is information we have to be careful with, and in some ways we cannot disclose,” Lund said.
To that, Pugh posed the question of requiring a carrier to sign a nondisclosure agreement.
“We have 45,000 active truck lines in our system and that’s a lot to add onto it,” Lund said. “It’s been OK to just handle that on a case by case basis for us. We’re willing to talk to any carrier about any issue.”
Certain dispatch services, which Lund classified as double brokers, also can damage a broker’s reputation, Lund said.
“A legit dispatch service that’s only acting for the carrier is fine,” Lund said. “We’ve just asked for some definition to make sure they are acting as a dispatch service and not crossing the line and acting as a brokerage. Everybody has to know each other’s roles.”
Lund closed by encouraging drivers to use the brokers as a resource as they can often negotiate issues faster.
OOIDA talk show
“Live From Exit 24” is scheduled for 7 p.m. Central every other Wednesday. Listeners can tune in to the show on the “Live From Exit 24” website, OOIDA Facebook page or on OOIDA’s YouTube channel. The next episode airs Wednesday, Nov. 17.
“Live From Exit 24” launched as a way to expand OOIDA’s communication with members and to hear directly from drivers across the industry. OOIDA is asking for truck drivers to fill out a survey to let the Association know how you are liking the show so far. Help guide what’s addressed during the program. The survey is here. LL