Letters: Broker Surety Bill Redux, Recruitment Claims
These Letters to the Editor appear in the June 6 print edition of Transport Topics. Click here to subscribe today.
Broker Surety Redux
In response to the May 16 letter, “Broker Surety Bill,” I offer this letter on the same topic, a version of which in March of this year I sent to Sen. Frank Lautenberg, chairman of the Senate Subcommittee on Surface Transportation:
Last June, Bill 3483 — called the “The Motor Carrier Protection Act of 2010” — was introduced in the U.S. Senate. This bill, among other things, would raise the financial security of property brokers who are licensed by the Federal Motor Carrier Safety Administration tenfold — from $10,000 to $100,000.
I am writing on behalf of the membership of the new Association of Independent Property Brokers & Agents, an industry trade group representing small and midsize brokers that was formed as a direct result of said proposed legislation.
The AIPBA opposes a $100,000 bond. If the bond were to be drastically increased as proposed, small and midsize property brokers would not be able to afford the premium and/or the new cash collateral requirements. As a result, thousands of small business owners, including our members, would be forced to close their doors. Tens of thousands of employees and agents would lose their jobs. We expect most bond issuers actually would cease offering surety instruments to property brokers because they would be “on the hook” for $90,000.
Indeed, rather than protecting small owner-operators, a large property broker bond actually would eliminate competition and would serve the interests of only the large brokerage companies.
Without small brokers — including our members — serving the industry, independent truckers would be at the mercy of a small, powerful group of large property brokers to secure their loads on the backhaul. Because of anti-competitive effects, shippers — and ultimately consumers — would pay more, as a result of the oligopoly that a $100,000 bond would create.
The AIPBA believes that a $25,000 bond would fairly balance the interests both of carriers and brokers. This would adjust the current bond, which was set in the late 1970s, to inflation. The states of Virginia and Florida already have intrastate property and/or household goods broker bonds set at $25,000.
Given the fact that FMCSA has published a new rule that raises the household goods broker bond from $10,000 to $25,000, effective Jan. 1, 2012, it appears FMCSA is moving toward a $25,000 bond for property brokers. We, therefore, would respectfully request that the Senate defer to FMCSA’s expertise in the regulation of property brokers’ financial security.
As a former New York State Department of Transportation investigator who fought fraud in the trucking and moving industries, a former licensed property and household goods broker and a transportation consultant with nearly 20 years of experience in motor carrier regulation, I offer my professional opinion that a $100,000 bond is not the answer.
We ask for the Senate to help keep the bond reasonable and affordable for small business owners, like our members, and to help protect independent truckers against an oligopoly by the big brokerages.
James Lamb
President
Association of Independent Property Brokers & Agents
Morris Plains, N.J.
Recruitment Claims
The other weekend I was doing my 34-hour reset at the Little America Travel Center in Flagstaff, Ariz., and I took the time to pull out several driver recruitment magazines. . . . After reading all the recruitment ads over a period of several hours, I came away with the following impressions, which are based on the fact that I have built from the ground up several businesses, owned my own truck and trailer and successfully contracted with the government. My impressions of these trucking company recruitment ads are that they are false and misleading. Here’s why:
• Everyone advertising claims to pay the highest cents per mile in the industry. But if that’s the case, how come so many company drivers are routinely shorted on their weekly trip settlement sheets and paychecks? Many driver families have to resort to using food stamps as a means to support their families.
• Many recruitment ads say “family atmosphere” or “open-door policy.” But the fact is that if drivers have a problem, the only open-door policy is the open door of a Greyhound bus going home to a possibly angry wife.
• Many also state in their recruitment ads that they provide “quality home time.” That’s an exaggeration. If one day off for 70-plus hours of work is “quality home time,” why aren’t the company CEOs, CFOs and line managers working the same hours? Would any trucking company executive be willing to work a 70-hour week, seven days a week — including holidays — and then receive pay for 24 hours of time? It’s not uncommon for a driver to be away from home for eight to 15 weeks.
• Many of these recruiting ads claim that they have cornered the market on freight and travel lanes. This implies that, somehow, the driver will profit from this claim, but it’s not true. “Forced dispatch” tells the driver where he or she will go next, not the amount or origin of the freight.
• The ads promise bonuses and vacations. But in my 13 years of over-the-road driving, I may have had one bonus, and “vacations” come only when you are fired or quit.
If trucking companies would just try some of the honesty and ethics that made our nation great, the drivers would take notice and sign up with them. But as long as they make lame excuses and lie, they are wasting their recruitment advertising dollars.
In the end, honesty and ethics will make carriers’ bottom line much, much higher and make driver churn rates disappear. A company policy of straight shooting with prospective drivers and other employees will result in a successful business that attracts good praise — and super employees.
David Ritter
Former Professional Over-the-Road Driver
Klamath Falls, Ore.
