Tag: brokers

Brokers Shift Gears – Again – in Fight Against Transparency

Latest argument employs “fear factor” of higher costs if truckers get their way

Freight brokers, by nature, are exceptional salespeople. It’s their job.

But when the sales pitch frequently changes, or is based on shaky assertions (or both), their credibility rightfully takes a big hit.

So it goes in the ongoing battle royale between brokers and owner-operators/small carriers. As LaneAxis reported during the height of the Covid crisis this past Spring, Carriers finally erupted in anger over their belief that brokers have been fleecing them for years. Low rates and a lack of pricing transparency sparked nationwide trucker protests stretching from SoCal to the White House.

Original Argument: Too Much Capacity

At the time, the broker coalition angrily refuted accusations of “price gouging” and a lack of transparency, claiming low demand was to blame for low rates.

“Brokers and 3PLs are not price-gouging – there is simply not enough freight to support all of the carriers,” said Robert Voltmann, CEO of the Transportation Intermediaries Association (TIA), a lobbying group representing brokers and third party logistics. “There are too many trucks chasing too little freight,” added Voltman, who made the comments in May, 2020.

Fast forward a few months, and the freight market is bouncing back strong, particularly in the spot market. Now that capacity has tightened up, especially with the upcoming holidays, brokers are taking a new tack in their fight against broker reform: stoking fear of higher costs for truckers and consumers if trucking advocates get their way.

New Argument: Too Much Cost

ArcBest, a self-described “multi billion dollar” 3PL, recently warned government regulators that if proposed broker reforms are enacted, every broker will incur at least $500,000 in additional costs every year – costs that will inevitably be passed down to Carriers and consumers.

“Essentially, any benefits received from carriers in modifying [regulations] will result in a substantial detriment to shippers, consignees and consumers and most likely to carriers as well,” wrote Barney Long in a mid-September letter to the Federal Motor Carrier Safety Administration (FMCSA).

Long claims revisions being sought to the brokerage industry will increase equipment, software programming and personnel costs to the tune of at least half a million dollars per year.

Long was responding directly to a petition filed by the Owner-Operator Independent Drivers Association (OOIDA), which seeks to improve broker transparency by:

  • Requiring brokers to automatically provide an electronic copy of each transaction record within 48 hours after the contractual service has been completed.
  • Explicitly prohibiting brokers from including any provision in their contracts that requires a carrier to waive their rights to access the transaction records as required by existing law.

A separate proposal seeks to require broker contracts exclude any stipulations or clauses that exempt brokers from having to comply with transparency requirements.

“If it wasn’t already clear before, it’s clear now: The freight brokerage industry is doing everything it can to maintain its iron grip over freight transportation,” says Rick Burnett, LaneAxis CEO and Founder. “No matter the season or circumstances, they need to maintain control and will always manufacture excuses for preventing broker reform and transparency. They have no incentive to drive cost savings into the transportation network. By nature, their model is margin driven with price masking baked in. LaneAxis has been fighting this uphill battle for years, knowing full well that independent truckers have had enough of the deception and excuse-making. We have been building a Shipper-direct network specifically for those truckers – so they no longer have to put up with this abusive and deceptive behavior.”

The LaneAxis Direct Freight Network is the first BROKERLESS network in trucking history. LaneAxis is empowering Shippers and Carriers to connect and do business directly with each other on the basis of total transparency and trust, backed by the patented technology LaneAxis provides.

To learn more, visit LaneAxis.com.

It’s National Truck Driver Appreciation Week. A Nice Gesture – but not Enough.

One of the silver linings of the Covid pandemic has been the near universal effort to redefine – or at least expand – the definition of the term “hero.” Law enforcement, military personnel, firefighters, and others who regularly put their lives on the line rightfully earned the title long ago. But the pandemic opened our eyes to whole new groups of Americans who merit the same accolade. The term “essential worker” is now part of our national consciousness, reflecting the risks and sacrifices taken by nurses, caretakers, grocery store workers, cleaning personnel, and – of course – truck drivers.

This week (September 13-19) marks annual National Truck Driver Appreciation Week. It’s a well-deserved acknowledgement for the 3.5 million men and women who hit the highways every day to keep our economy moving. Given all that has happened in 2020, this year’s salute to truck drivers takes on added significance.

“Appreciation” is a worthy sentiment – but it’s not action

Almost 6 percent of Americans work in the trucking industry, amounting to 7.5 million jobs. 97% of these truckers work for small, independent carriers owning just a handful of trucks – and in the cases of owner-operators, just a single truck.

The men and women of the trucking industry have stepped up in countless ways to serve our country and fellow citizens during this emergency.

They drove straight into COVID-19 hot spots to deliver ventilators, personal protective equipment and other medical equipment to hospitals. When a panicked public made a run on store shelves, they hustled to make sure essentials like toilet paper and other household necessities remained available to consumers. They risked their own health and safety in a time of need, often spending days and even weeks away from home.

“Thank you” is a good start – but it’s not nearly enough. National Truck Driver Appreciation week must be followed up by action. 

Trucker challenges & the LaneAxis perspective

Multiple studies have shown that truck drivers suffer significantly poorer health than the general population. The most shocking statistic of all: according to the CDC, the average life expectancy for a commercial truck driver is only 61 YEARS OLD. That is roughly 16 years lower than the national average.

That stunning statistic has many contributing factors, but the stress, uncertainty, and inequities of the trucking industry as it exists today certainly isn’t helping. This year’s massive protests against unscrupulous freight brokers exposed one of several major fault lines fracturing the industry.

Here’s just a snapshot of the challenges facing truckers:

Trucking troubles:

  • Poor pay
  • Dishonest and manipulative brokers
  • Non-guaranteed payment
  • Long delays for payment – forced factoring
  • Billions of dollars and hundreds of hours lost to detention time
  • Burdensome HOS restrictions
  • Scattershot and confusing legislation impacting drivers’ livelihoods (e.g. California Assembly Bill 5)

And this barely scratches the surface.

LaneAxis has long recognized these issues and troubling trends, and built a system designed to directly address many of them.

Most significantly – the LaneAxis Direct Freight Network is focused on empowering Carriers to connect and negotiate directly with Shippers. This dynamic network will solve many of the pain points plaguing truckers. Crucially, this includes eliminating the need to work with brokers, which in turn puts more money in Carriers’ bank accounts. For example, if a broker takes a 20% fee on a $1,000 load, you only make $800. In our model you will receive nearly the full $1,000 (minus a small transaction fee). LaneAxis also guarantees payment to the Carrier prior to the load being tendered, usually within 24-48 hours of delivery – so no more need for factoring.

Our FreightVISION feature provides real-time shipment tracking data, including geofence entry and exit notifications. This will dramatically reduce detention time disputes. The system also provides in-app messaging (no more check calls), truck-specific navigation, and instantly uploaded e-docs. All of these features are designed to reduce overhead costs for Carriers.

On the legislative front, LaneAxis supports all efforts to improve conditions for drivers – particularly as it relates to abusive brokers and detention time. We are proud to partner with the American Association of Owner Operators (AAOO), which lobbies on behalf of small, independent Carriers, along with providing a wide range of benefits. AAOO membership is included at no cost to subscribed members of the LaneAxis platform.

LaneAxis proudly salutes all truckers during this National Truck Driver Appreciation Week. Now let’s all get to work by taking concrete action to improve their professional and personal lives. Visit LaneAxis.com to learn more.