Letters: Roadcheck Success, Raising Bond Prices, Hours of Service, Workers’ Comp

Raising Bond Prices

I’m beginning to become a little annoyed at this lopsided notion that the broker community represents everything that is wrong in transportation, and shippers and carriers are the poor victims. This couldn’t be more wrong. The fact of the matter is that there are crooks and deceivers out there in the public domain looking for anyplace at all where they can set up shop, order goods and services and then not pay.

This is not the sole domain of the brokerage community. Shippers do it to brokers all the time, and nobody seems to take notice or care because you, as a good businessman, are supposed to check references, pull credit reports and generally be astute about whom you extend credit to.

Are carriers generally immune from exercising sound business practices? It’s really not that difficult to gather solid credit history and information on a broker, whereas getting accurate relevant information on a shipper is much more difficult.

And when we don’t get paid, whom do we turn to? Where’s the shipper’s bonding company for that?

Oh, I see, there isn’t one. Well, that’s just dandy.

There is no amount of legislation or regulation that will stop a person from being a crook if that is their intention, and focusing only on brokers is not going to solve a general moral character problem.

Everybody in the chain — shippers, brokers and carriers — must do the right thing all the time, not just when it’s convenient.

While it’s interesting to contemplate, I’m not sure there is a law that will do that. In the meantime, if they want to increase the broker’s bond to $100,000, require one from shippers, too.

The painful truth is that shippers stick carriers with seriously late payments, partial payments or no payments at all far more than anyone wants to admit.

Frank Messina

Messina Traffic Service Inc.

Yorba Linda, Calif.

I have been a broker for more than 20 years and never had my bond filed on a single time. I also am an agent to a carrier and have been burned by a broker for more than $12,000 last year without collecting a dime from the collection agency or the bond. By last count, there were more than 100 claims on the bond and more than $150,000 in due payments.

From what I have seen, the majority of brokers who have “taken the money and run” and not paid the carriers are startup brokers. To eliminate or minimize this problem, follow this: If you are a broker and have been in business three years or less (to include new brokers), your bond will be $100,000. For brokers in business three to five years, $50,000, and more than five years either keep it at $10,000 or raise it to $20,000.

This fee schedule not only will protect the carriers, but it also will eliminate the “fly-by-night” broker, because I doubt they can put up $100,000 for the bond or get an insurance company to insure them. I’m not saying that a broker with five, 10 or more years in business can’t or won’t go out of business, but the risk would be far less than a startup brokerage or a company that only is a couple of years old.

Eric Sommerfeld

Owner

T. Load Specialties Inc.

Columbus, Ohio

Hours of Service

Your article, “Groups Seek to Cut Driving Time As Part of Changes to HOS Rules” (6-28, p. 3; click here for previous story), which criticized efforts by groups working to reduce even further the on-duty and driving hours for truck drivers, ignored the most significant factor facing truck drivers in the modern North American trucking industry: quality of life. This is a particularly important issue for those people considering trucking as a career.

The shippers, carriers and their shareholders may be satisfied that safety ratings alone should determine how many hours behind the wheel a driver can endure, but, in my experience, the only reason drivers “agree” to such punitive routines is because significant earnings are possible only if the driver invests the full 14 hours each day.

Reliable statistics show that truck drivers in North America have a life expectancy 15 years shorter than the average individual. Such a travesty in this modern age is a result of inadequate attention to personal health (including suitable home and family life), a natural consequence of drivers doing too many hours too far from the infrastructure of their hometowns.

The imposed habits of a lifetime behind the wheel catch up eventually. This is hardly the reward that a truck driver should face after a long career.

Mike Smith

Driver

Metro Drayline Services

Kamloops, British Columbia

Workers’ Comp

It was good that you at least labeled Mr. Carl Zeutzius’ comments in your July 5 publication as “Opinion” (“How to Save on Workers’ Compensation,” p. 7; click here for previous Opinion piece). “Advertisement” might have been a better label. Insurers and their agents often are the painters of bleak pictures, yet they hand you their rose-colored spectacles to view their creative work.

The implication that money spent on workers’ compensation is currently an avoidable cost of doing business is simply false. In Georgia, moreover, it is legally unavoidable.

Yes, the insurers and their rating boards may sprinkle a flower or two on their canvas, but workers’ compensation is still a cold and cutting picture for the insured, especially because of factors such as the mysterious “experience modification.”

My little business has had no incurred losses for a decade, and our payroll has dropped for the last three years, but guess which way ye old “mod” is going. That’s right — up!

The “mod” is tethered, not compared, to other riskier companies for which we have no control.

Give the National Council on Compensation Insurance a call and ask them why (if you have time to waste). NCCI will not give a reasonable answer, but it will coercively send an auditor to make sure your employees are classified according to NCCI’s requirements.

Rating boards such as NCCI like to claim that they are unbiased or independent, but look at the board members before believing it. All you will find are chief executive officers and chief operating officers of insurance companies. They are fully biased to the insurers.

Workers’ compensation insurance is another entitlement that businesses must afford. It is a nasty big entitlement where businesses have to pay the insurer, the enforcement bureaucracy, the sales/marketing company and the agency, to name a few.

I have my own glasses, Mr. Zeutzius. The artistry behind a workers’ compensation concept can be beautiful. The follow-through and reality is ugly, very ugly. But you are right — it is definitely not the insurance company’s money being spent.

Keith Barnes

CEO

Reliable Product Transport

Dalton, Ga.