Letters: Brokers, Bonds & Bills; Port Rules; HOS Redux
These Letters to the Editor appear in the June 27 print edition of Transport Topics. Click here to subscribe today.
Brokers, Bonds, Bills
The Association of Independent Property Brokers & Agents offers this letter in response to the “footnote” just before the end of the June 20 letter headlined “Broker Bonds Again.”
The paragraph in question began: “As a footnote, I received a postcard from the Association of Independent Property Brokers & Agents asking me to help them stop a proposed $100,000 surety bond bill.”
AIPBA believes the government should not punish all brokers for the financial failures of a few bad apples. Small carriers should look at the issue of raising bonds to unreasonably high levels, not from the perspective of carrier versus broker but as a matter of balancing broker and carrier interests fairly and protecting small business in general.
When a shipper doesn’t pay a small broker, the broker still has to pay the carrier. While the carrier can file a claim against the broker’s bond if she does not pay, there is no such bond to protect the broker when a shipper fails to pay. Proponents of a $100,000 bond don’t seem too worried about classifying such incidents where shippers fail to pay brokers as “fraud.” They apparently call it “tough luck.” The broker is expected to run the shipper’s credit and protect himself.
Our organization cannot control whether the Federal Motor Carrier Safety Administration enforces existing regulations. But it can and will police its own members. AIPBA does not tolerate brokers who don’t pay their carriers, and it does not allow them to remain members of the association. We have zero tolerance and don’t want their renewal dues. As a condition of membership, AIPBA members must pledge “to conduct business in an ethical fashion with the utmost integrity.”
As a service to members, AIPBA is dedicated to helping resolve disputes among member brokers, shippers and carriers. We investigate all complaints received by members who are brokers, shippers, carriers/independent owner-operators and then we take action. AIPBA will hold the broker or shipper member accountable under this policy and will notify FMCSA of its decision to revoke
a broker’s membership for failure to pay.
Yes, we sent the letter writer the postcard and will continue to fight any and all attacks on small business. Rather than supporting anti-small-business legislation, small carriers like the letter writer would be wise to join the AIPBA as affiliate members and use only AIPBA-member brokers to ensure access to this added-level of protection. There is no need for new legislation that purports to protect carriers from fraud but really attacks small business and aims to eliminate the big brokers’ competition.
James Lamb
President
Association of Independent Property Brokers & Agents
Morris Plains, N.J.
It would have helped if the writer of the letter headlined “Broker Bonds Again” had read a copy of the proposed legislation (S. 3483) from 2010 — the same legislation as Sen. Olympia Snowe introduced this year.
What the writer doesn’t seem to understand is that the proposed legislation raising the surety bond to $100,000 would make his working with another motor carrier to balance his dispatch illegal unless he, the writer, gets his own broker’s license and bond.
It is obvious from reading his letter that he neither understands the effect the proposed changes would have on his own business nor the net effect on more than 160,000 small businesses that own one to 20 trucks.
This law of re-regulation will make the biggest motor carriers/brokers 10 times larger than they already are because all businesses have to give their shipper following to larger trucking companies that can set aside $100,000 — interest-free — for bonding every year.
I am sure he doesn’t understand that if he gets his own license and bond in order to continue in operation, he will have to reapply for the license and bond every year. Talk about needless regulation.
David Dwinell
Professor of Transportation
Brokering
Sun City, Ariz.
Port Rules
A story in your June 6 edition, “East Coast Ports Set Grants to Purchase Newer Trucks,” said drayage truckers in the mid-Atlantic region could get $15,000 grants from the Environmental Protection Agency to help buy newer, cleaner models.
I own and operate a 1986 truck in good condition, but according to the EPA, I don’t qualify for the $15,000 clean-truck grant it is offering drayage truckers in the mid-Atlantic region to buy because I don’t haul containers. What’s wrong with this picture? EPA is using federal money — my tax dollars — to fund my competition?
Come on. These dunderheads in Washington, D.C., need a check-up from the neck up. How about mandating minimum rates coming out of the ports so the drayage operators can afford to buy newer trucks without federal funds? That’s a good way to save a few million dollars on the deficit, don’t you think?
Why do you think I don’t pull containers? Because they don’t pay. Do the numbers: Take what it costs to buy, maintain, tag, insure, pay tolls and taxes, and pay a driver and then compare that with container rates.
Around New Jersey, the rate I have been quoted on the phone when asking about leasing to a drayage operation is $1.25 per mile plus fuel surcharge. Can you live a comfortable life on that and make truck payments? I dare you to show me how. It continues to amaze me that people who don’t have a clue about this business can get into decision-making positions and shove this nonsense down our collective throats. Where can I sign for the next vacancy?
Rick Schumann
Reliable Ground Service LLC
Washington, N.J.
Hours of Service
As a shipper, I see in the industry publications about how the hours-of-service rules are going to increase cost across the board to the consumer. The thing I do not understand is — how?
The proposed rule changes are, for the most part, reverting to similar rules from several years ago, right? I haven’t seen any documentation that outlines the true cost-effect to the trucking companies.
It is my opinion that the carriers want to put this negative publicity out there simply so they can come to the shippers and say, “This is why we have to raise your rates even higher, because of these rules.”
I heard the same thing about CSA — the Federal Motor Carrier Safety Administration’s Compliance, Safety, Accountability program. Carriers say the new safety rules are driving rates up.
I’m sorry, but in my opinion, carriers already should have been adhering to stronger safety standards, and if it took the feds to get it accomplished, why should the shippers be punished with higher rates?
Victor Skoglund
Corporate Transportation Manager
Metl Span LLC
Dallas
