Truckers ask for coronavirus phase-four aid to help boost shipping rates
Industry wants Congress to regulate pricing practices
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The trucking industry is asking for more government regulation to help increase transparency about pricing as shipping rates plummet, putting more companies at risk of failing during the coronavirus pandemic.
Following a demonstration on Capitol Hill over the weekend, the Owner-Operator Independent Drivers Association penned a letter to Congress this week, accusing brokers – who set up transactions between drivers and shippers – of skirting regulations
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The industry group claims there are two ways brokers do this: by including clauses that prevent truckers from seeing how much brokers earn on a job and by otherwise making it difficult for truckers to access transaction records that are kept.
Secrecy would give brokers, who make a commission from the transaction, more pricing power.
“The services provided by truck drivers are currently in high demand, but at the same time many small trucking businesses are far from certain they will survive today’s economic downturn,” the letter read. “With freight rates reaching historic lows, small business truckers are struggling. Many have reached out to Congressional offices to express frustration not only about feeble rates, but the utter lack of transparency between brokers and motor carriers.”
The group is asking Congress to step in to require brokers to immediately provide an electronic copy of each transaction record once the service has been completed and prohibit them from including contract clauses that prevent truckers from accessing records.
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As previously reported by FOX Business, rates have fallen below levels where drivers can operate their trucks profitably.
According to data from freight and analytics firm DAT, rates as of April 30 had fallen to five-year lows for both the reefer and flatbed equipment categories. For dry van freight, the national average was just $1.64 per mile.
In some cases, it has become more profitable for a truck to remain parked than to accept a job where it will lose money.
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Brian Fielkow, president of multimillion-dollar trucking and logistics company Jetco Delivery, told FOX Business he believes current shipping rates are largely the result of natural market forces. Initially, demand for some services – like food delivery – was high during the onset of the coronavirus pandemic. However, Fielkow said that demand has leveled off – and with large swaths of the economy shut down, there is less work.
He noted that while there probably are some brokers taking advantage of the current situation, in the long term both brokers and shippers need capacity in the market.
Fielkow also noted that relationships between truckers and shippers are moving along “as well as they can” during the pandemic and noted the trouble is occurring in the transactional market.
In response to the pricing protests held in D.C., President Trump tweeted that he stands with truckers “all the way.”