DC Velocity - September 2013

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had trouble at one point or another collecting from brokers or other intermediaries, according to OOIDA estimates. In some cases, the truckers never get paid, the trade group said.

The language in the law “spell[s] out
responsibilities and protect[s] all involved,”
Robert A. Voltmann, TIA’s president and
CEO, wrote in May. “We believe that who-
ever hires a truck is responsible for paying
for that truck.”
Voltmann said truckers who rebroker
freight without proper licensing expose
themselves to a legal nightmare called “vic-
arious liability,” where a company can be
held responsible for accident-related dam-
ages even if it wasn’t directly involved in the
incident.

In recent years, the plaintiffs’ bar has focused on the potential liability in carrier-to-carrier relationships to win big settlements for accident victims. By contrast, brokers who are properly licensed and who demonstrate robust carrier selection procedures have been, to some extent, insulated from legal exposure, Voltmann said. “Why would a carrier not avail [itself] of these protections?” he wrote.

Jett McCandless, founder and CEO of CarrierDirect, a Chicago-based firm that consults for carriers and 3PLs, said the law will deter low-rent truckers and brokers that, out of desperation, engage in behavior beyond the scope of the law and its ethics. Double-brokerage, he said, leaves shippers vulnerable to actions they have no visibility into or control over. “All of the controls they have in place, all of the reasons they did the procurement, go out the window,” he said.

McCandless said the new rules would go a long way toward removing the bad actors and, by extension, make the business cleaner and the roads safer. “It legitimizes the space,” he said.

Voltmann said it’s high time truckers operating in brokerage be required to have separate broker authority and the bond that accompanies it. “Brokerage is not a hobby. It’s a profession with certain responsibilities, including protecting other people’s money,” he said. “The majority of money touched by a broker, whether that broker is asset-based or nonasset-based, belongs to other people.” ;

of double-brokerage wipes out an important source of revenue for a trucker, especially if it has too much business for its own fleet to move and needs to farm out excess loads. Over the years, truckers came to view the practice of double-brokerage as “their sacred right,” he said.

Dwinell said the language was essentially crafted by the American Trucking Associations, the Owner-Operator Independent Drivers Association (OOIDA), and the TIA to protect their respective interests, and called it a stab at backdoor reregulation. He said the provisions would add friction to the trucking supply chain, deprive truckers of business, and invite more extensive safety enforcement by the states.

Truckers, Dwinell said, will bear
the biggest burden. “The net effect
of this will be incalculable,” he said.
When asked about the cost, he
replied, “write the word ‘billion,’
pick a number out of the air, and
put it in front.”

A LONG LEGISLATIVE ROAD

The language is the culmination of several years of legislative wrangling designed to clean up a corner of the shipping world that sometimes operates in the shadows. Supporters say the provisions establish clear functional lines among the various players. It gives shippers peace of mind that the carrier on their bill of lading will be the same one that shows up to haul their freight, they say. And it curtails the sleazy act of “churning,” where a trucker without brokerage authority grabs freight from a load board, gets an advance from the shipper or broker, flips the load to another carrier, and then disappears, leaving the second carrier empty-handed. Roughly one-quarter of owner-operators have