Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/947211
28 | Overdrive | March 2018 HIGHWAY ROBBERY in St. Louis who had operated five companies in succession over two years, running up claims on a series of sure- ties. He'd probably never paid a carrier, Reesor believes. Marold Studesville of Transportation Financial Services, whose primary business is in providing those required $75,000 surety instruments for brokers, has seen such happen himself. In 2014, following a run-up in claims on a client's surety, Studesville realized the broker previously had had three other compa- nies that had closed, and he was running up claims on the fourth. As a surety processor, he's required to notify the broker of claims and give the broker 30 days to replenish the minimum $75,000 financial security. But he's also required to notify the Federal Motor Carrier Safety Administration of pending cancellation of the $75,000 surety instrument 30 days in advance. That, ultimately, can amount to an extra 60 days during which the crooks are free to "continue booking, dispatching and billing shippers for movements they probably never even contemplated pay- ing the motor carriers" for, Studesville contended in comments on the Federal Register. He says the loophole is exploited routinely by shady brokers. Studesville says he's hopeful for fed- OTHER WARNING SIGNS IN NEGOTIATION UNDERESTIMATED MILEAGE. If you call on a load posted as running between two major cities but actual delivery addresses are well beyond the boundaries of those cities, "that's a small red flag for me," says independent Chad Boblett. "So they're lying about the locations. What else? I know not every single broker is lying when they give out the mileage, but it's never correct. They're wrong every single time, and every single time they're wrong, they're undercounting." Double-check mileage, he adds. "Google Maps is your friend as an owner- operator. Don't worry about it being a truck-friendly program. You know where you can and can't go." 'THE LOAD IS READY NOW.' If you get this response to your queries about appointment times, Boblett says, get more information. "Does that mean I'm already late? If I'm going to be a work-in, that means I could be sitting there until they take care of all the appointments, and they're probably going to be pissed-off at me and treat me like" you-know-what. "I don't like doing it, but my rate will reflect it if I'm going to be a work-in." MULTIPLE BROKERS. Double-broker- ing is when a broker takes a load from another broker without the lead broker knowing he's actually dealing with another broker. It's one of those quasi-legal prac- tices that most above-board brokerages recommend against, though it happens. Future blockchain advances in digital brokering, providing more open records of every part of the transaction, eventu- ally could help prevent this practice, say blockchain boosters. But in the meantime, "cobrokering," where the same happens but contractual requirements are agreed to between the brokers, is "running ram- pant" today, says Boblett. In addition to the infuriating aspect of even more hands in the cookie jar, there's the matter of basic knowledge to do the job at hand. Boblett tells the story of a broker friend who got burned in what be- came a cobrokering arrangement, thinking he was dealing with a carrier agent who was going to put the load on one of the carrier's trucks. But the agent farmed the haul out to a subagent. The subagent put a solo driver on what needed to be a team load and destroyed the broker's rep with his shipper. "I use a broker because it's easier for me to not have to babysit a shipper," Boblett says. "I want a broker doing their job — they have to share equal respon- sibility for me as their customer and the shipper as their other customer. The reason why I need that equal responsibil- ity? If I have a load claim, I'm going to the middleman for assistance." OverdriveOnline.com poll All the above 47% None of the above 4% Other 2% Broker took outsize margin 10% Load canceled, no payment offered 9% Load canceled, meager payment offered 3% Appointment load turned out to be first-come first-served 8% Broker agreed to pay detention, then refused 7% Broker violated own terms for payment speed 5% Double-brokered load, meager rate 3% No payment or collected through bond or collection agency 2% Common shady scenarios owner-operators have encountered with brokers Nearly half of owner-operators indicated they'd experienced all of these scenarios when dealing with brokers. Only 4 percent had seen none.