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November 11, 2013 4:00 AM, EST
Letters: Size, Weight in Texas, Stormy Weather, Pilot, Double Brokering

Size, Weight in Texas

Dear Motor Carriers and Shippers:

In an effort to keep you informed of state legislative changes in Texas that could potentially affect your business, I am sending you this letter as a courtesy. On Sept. 1, 2013, weight violation penalties were increased by the passage of House Bill 2741 during the 83rd session of the Texas Legislature.

Both motor carriers and shippers face stiff penalties for weight violations under the new law that aims to encourage compliance and prevent damage to Texas roads. It is strongly suggested that shippers provide a Certificate of Weight for motor carriers to keep in their cab for all overweight loads.

The penalties will be assessed depending upon the size of the weight violation, as well as the number of times the offender has been convicted of a weight violation.

Although the above violations are enforced by the Texas Department of Public Safety, citations may trigger an administrative audit of a motor carrier or a shipper by the TxDMV’s Enforcement Division and result in civil penalties and other sanctions. Please ensure that your shippers are aware of Transportation Code 623.274, which requires them to provide you with a Certificate of Weight prior to your seeking an overweight permit.

Should you need additional information regarding commercial vehicle size and weight regulations or permitting requirements, I encourage you to learn more by visiting our Motor Carrier Web Portal at www.txdmv.gov.

Whitney Brewster

Executive Director

Texas Department of Motor Vehicles

Austin, Texas

Stormy Weather

In the Oct. 21 issue of Transport Topics, an article appeared with the headline “Brokers’ Margins Decline as Competition Increases.” As the title suggests, the article discusses how brokers’ profit margins are currently falling because of increased competition. This may be a storm for brokers, but a hurricane is on its way that will soon flip the tide on carriers if the storm stays on its current course.

The Association of Independent Property Brokers and Agents believes that competition among “brokers” has been increasing over the past few months because the current transportation reauthorization measure — MAP-21 —requires carriers to secure broker licenses if they arrange for transportation but do not take physical possession at some point in the shipment.

In essence, it’s not your traditional small business brokers who are entering the industry; it’s carriers that are getting broker licenses. And there is really no way of knowing how many of the new broker license applicants are actually carriers using a second legal entity name.

AIPBA believes that many carriers set up brokerages under a second legal name to mitigate their risk exposure in the event that something happens (such as a fatal accident) on the high-risk (carrier) side of their business. AIPBA believes that this trend can best be described as “the storm before the storm.”

Although Phase One of MAP-21’s effect may entail an influx of new broker licenses, we believe they mainly are neither true “new entrants” nor bona fide small businesses.

Phase Two probably will occur 30 days after the Federal Motor Carrier Safety Administration’s Nov. 1 broker license revocation notices are sent to those small brokers who have not yet secured a $75,000 broker bond.

At that point, the tides will change, and carriers enjoying higher rates will see a significant drop in those rates once the smaller brokers are gone and the larger brokers control the market. At that point, the supply of brokers — and carriers’ choice — will be reduced, and the forces of supply and demand will prevail.

James Lamb

President

Association of Independent Property Brokers and Agents

Fort Lauderdale, Fla.

Pilot

This story is misleading (About 50 Carriers Opt Out of Pilot Settlement,” TTNews.com, Oct. 15).

Only about 400 customers were on manual rebates — these were the only people who were scammed and defrauded by Pilot. Saying there were 6,000-plus is a total fabrication and once again allows Pilot to twist and defraud the customers with inaccurate information.

It also shows that TTNews.com did not do its homework.

Matt Welding

Vice President

Southern Truckload & Logistics

Grand Prairie, Texas

Editor’s Note: The numbers have changed as the Pilot Flying J story has progressed. Only Pilot and the attorneys have any inkling of the precise number, and their estimates are the only authoritative source we have so far. That said, there is certainly nothing so far that suggests the number is as low as 400.

The source of our most recent item (“About 150 Pilot Customers Reject Settlement,” News Digest, 10-28, p. 69), was a company spokeswoman who said the number of eligible settlement plaintiffs was about 5,500.

In the Oct. 21 Transport Topics, we quoted the lead plaintiffs’ attorney in the settlement, who estimated the number of eligible settlement plaintiffs at about 7,000.

And in a July 22 story announcing the settlement, we noted that it said, “More than 4,000 customers could be covered by the agreement.”

Double Brokering

I am getting arguments from both sides of the logic ledger. Is MAP-21 a law that outlaws double brokering? If a motor carrier gets a load from a shipper, takes a cut and gives that load to its brokerage, which, in turn, takes a commission out of the same act of transportation, is that double brokering? If this is true, are these transportation acts still legal under MAP-21?

If these acts are allowed, hasn’t MAP-21 become a law that institutionalizes double brokering?

Doesn’t MAP-21, which requires “separate registration,” allow either registration to broker? If so, can the motor carrier authority no longer broker freight?

Can anyone tell me what is true or false?

David Dwinell

Owner

LoadTraining.com

Phoenix