Letters: Driving-Time Cuts, Rate-Setting Redux, Raising Broker Bonds

These Letters to the Editor appear in the July 5 print edition of Transport Topics. Click here to subscribe today.

Driving-Time Cuts

Safety advocate groups once again are pursuing their never-ending effort to reduce the driving time allowed commercial motor vehicle operators (“Groups Seek to Cut Driving Time as Part of Changes to HOS Rules,” 6-28, p. 3). These groups want the federal hours-of-service rules to call for no more than eight hours of driving time, with 12 hours of off-duty time.

I would like the safety advocate groups, the Department of Transportation and the Federal Motor Carrier Safety Administration to realize that over-the-road truck drivers spend most of their weekly off-duty time away from home. What exactly are they supposed to do with 12 hours of off-duty time out of every 24 hours while at a location away from home? How long can a person sit at a truck stop or another spot away from home waiting for the clock to tick away the hours?

How would FMCSA, DOT and the safety advocate groups spend their time while working away from home without the luxury of being able to get in their car and drive to wherever they want to go and do whatever they want to do?

How long before it got boring?

Truck drivers, as a rule, get no more than four to six consecutive hours of sleep at a time, no matter how comfortable their sleep area may be. By making them spend even more idle time, all you’ve accomplished is to make them feel even more fatigued. When they get back to their driving cycle, they are worn out before they’ve traveled 100 miles down the road.

It makes absolutely no sense to me. If you’re not a driver, try going through your own everyday work cycle after a sleep break at home. You get up, but you can’t go to work for another six to eight hours. How efficient will you now be at your work — and how long before you are falling asleep at your desk? This isn’t brain surgery, but we sure try to take something simple and turn it into something difficult. Just go ahead and try to regulate your own work/rest cycle as you propose a truck driver must do. Go ahead and do it, I dare you.

Lawrence Hartung

Director of Safety

deBoer Transportation Inc.

Blenker, Wis.

Rate-Setting Redux

This is in response to the letter about rate setting in the June 21 edition (p. 8).

The letter writer is correct in stating that the truckers set the rates and the brokers do not.

As a broker, our “cost” is the trucker’s rate. We act as a commission sales force for our truckers. If the rate is unacceptable, we know it immediately. We either cannot get the load moved or we lose money, paying the carrier more than we charge the shipper. We are very price sensitive.

I would suggest that most brokers try to get top-end rates so we can pay more, which attracts truckers to our shippers’ loads. At our company, we have always tried to do this. We want to be the “first call” for our truckers. 

Normally, our biggest competitors for shippers are truckers. The prices truckers are willing to put in for shippers to “fill their trucks” or to fill their “backhaul lanes” amaze me. 

I think the letter writer is naive to think that most brokers do not know anything about costing and rates. Most of us came out of the trucking industry.

In the letter writer’s example, I like his reasoning, but I have one issue: If he is willing to haul a load from Trenton, N.J., to Elyria, Ohio (478 miles), for $500, he is hauling this load for less than his stated variable cost of $1.24 a mile. Explain to me how this makes sense?

It would appear that he has fallen into the “backhaul” trap himself.

It is not in the broker’s best interest when carriers go out of business. It is in our best interest to partner with a carrier that provides quality service so we can sell more than just price to the shippers. Shippers will pay for good service and communication. Selling and competing only on price is a losing proposition.

Gregory Roush

President

Smart Lines LLC

Oklahoma City

Raising Broker Bonds

I am writing regarding the recent letters bashing brokers in an attempt to raise our surety bonds.

Nobody is saying it is OK for brokers to default on paying carriers. Brokers who do that should be put out of business and prosecuted.

We have been in business for 25 years and always have been fair with our carriers. We know we cannot survive without good relationships with our carrier partners and value them highly. In many cases, we pay before we are paid by our shippers, and we also have paid our carriers when shippers have gone out of business, feeling responsible because we chose the shipper. We presently pay more to move our freight than ever before, and our net profits have fallen during the past several years.

The only practice that will help carriers avoid brokers defaulting is the proper follow-up before taking loads to make sure the broker has good references, a good credit and payment history, and has stood the test of time.

In our many years in business, we have had our share of carriers who caused us to lose business because of their service problems. But we do not bash all carriers and realize that there are always some bad apples in every business.

Thus, you should not paint all brokers with the same bad brush because many of them are doing the right thing.

The real problem may be closer than you think.

I find that some of the giant carriers in the industry are now paying 78 cents per mile out of New Jersey to many states. That’s a rate I would be embarrassed to pay my carriers, yet no carrier is complaining.

Another problem involves carriers who back-sell brokers to get a few dollars more from shippers. Then our shipper approaches us because they prefer doing business with us and we have a personal relationship with them, and asks us to meet the new reduced rate. To do that, we now have to reduce the amount we pay carriers. The net effect is lower profits for all. Think about it.

Ben Ahern

President

Laser Transportation Systems Inc.

East Windsor, N.J.

In today’s trucking industry, rates for a single load can — and, for me, generally far exceed — the $10,000 bond now required. Even two cross-country loads for a dry van can exceed the present bond required.

Many of these “mom-and-pop” brokers do not have the resources to pay the carrier if they are not paid for a couple of loads by the shipper they found — and supposedly checked credit on.

Brokers, for years, have gotten behind in paying their carriers and have gone out of business, leaving many carriers, big and small, with little or no settlement from their bonding company.

When a carrier enters into a contract with a broker, that contract is binding and requires the broker to pay the carrier regardless of whether the broker collects the freight charges from the shipper. Far too often, when the brokerage is not paid, the broker files for bankruptcy and the carrier loses because there was an insufficient bond to cover freight charges due to the carrier.

Frequently, when I have called brokers seeking payment for freight charges that were overdue, I get the same story from them: “We have not been paid by the shipper and we will send you a check when we’re paid.”

Litigation to recover freight charges due from a broker is very expensive — and it is very inexpensive for a broker to file for Chapter 7.

The reason property brokers’ bonds cost a lot more than investigators’ bonds is that there is a considerably higher risk for property brokers.

If a small mom-and-pop or any other type of broker wishes to maintain a limited, excessively low bond, it should be limited correspondingly to the total amount of freight charges it can accumulate.

It has been said for many years that the easiest way to steal is to become a truck broker, and too many times that is exactly what has happened. Just as bad truckers have hurt the trucking industry, bad brokers have hurt the broker industry.

If shippers and good brokers want good carriers, then good carriers need quality brokers to make sure the partnerships we have are successful.

Carriers need assurances that they will be paid for their services.

Richard Marsh

President

SpecializedCarrier.Com Inc.

Pahrump, Nev.