Letters to the Editor: Double Brokering, Gasoline Prices
These letters appear in the June 4 print edition of Transport Topics. Click here to subscribe today.
In reference to the article headlined “TIA Says Customs to Expedite Request for Logistics Firms to Join C-TPAT” (4-30, p. 4), I believe the Transportation Intermediaries Association should solve the problem of “double-brokering” before trying to convince regulators to allow third-party logistics providers to join the Customs-Trade Partnership Against Terrorism.
Double-brokering is a security issue and has reached epidemic proportions, where as much as 15% of all brokered traffic involves more than one broker.
Cargo security is designed to prevent cargo from being used as a weapon of mass destruction.
When a load has more than one broker involved in its movement, cargo security goes out the window. The FBI — or any regulators, for that matter — would find tracking the origin of a double-brokered load and the “perp” a difficult, if not impossible, task.
Double-brokering, which is currently allowed by Department of Transportation regulations, is the leading cause of motor carrier nonpayment, resulting in shippers’ double-paying for the same move.
There are no reasonable penalties for a broker not paying a motor carrier — and please don’t tell me a $10,000 surety bond is a penalty.
DOT should take immediate steps to declare all brokers “fiduciaries” of the motor carriers doing the actual hauling. The broker collects transportation funds from the shipper on behalf of the motor carrier, less the broker’s commission. State fiduciary laws about holding funds in escrow could be invoked against the broker who doesn’t pay.
All 50 states have very substantial penalties, including jail time, for brokers who abscond. Banks will continue to lend money to brokers who assign their accounts receivable as collateral to the banks, thus pre-empting motor carriers of their rightful primacy in broker funds.
If DOT declares brokers to be fiduciaries of motor carrier funds, then banks will stop seeking accounts receivable as “collateral” from a licensed broker.
The size and magnitude of these absconding brokers has taken on gargantuan proportions. DOT needs to do what is right and close the double-brokering security loophole now.
My question on gasoline prices is simple: The oil companies keep claiming refinery output and their costs have driven the gasoline prices up. I would like to know what kind of profit they have made per year over the last seven years?
Director of Training and Installation
Advanced Transportation Technologies
Rocky Ford, Colo.