?? Freight Broker Rate Transparency
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Good morning. Today’s newsletter covers the freight broker rate transparency debate, FMCSA’s plan to remove MC numbers, and the top concerns for truckers in 2024.
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AI in Carrier Sales: Check out this week's FreightCaviar Podcast with Paul Singer, CEO of Fleetworks.ai , on how AI is reshaping carrier sales.
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?? WHAT’S COOKIN’ IN FREIGHT
??? Top Concerns for Truck Drivers in 2024. The American Transportation Research Institute (ATRI) surveyed over 3,700 trucking industry stakeholders to identify their top concerns. Among truck drivers, truck parking remains the top issue, with the ATA revealing that 70% of truckers are forced to violate service hours while searching for safe parking. With only 313,000 parking spaces available nationwide for 3.5 million truck drivers. Driver compensation is the second-biggest concern. The economy climbed from 7th place in 2023 to 3rd in 2024. Additional issues for drivers included detention at customer facilities, speed limiters, and fuel prices.
?? FMCSA to Eliminate MC Numbers in New Registration System. The FMCSA has announced plans to eliminate MC numbers as part of a major overhaul of its registration system, aimed at combating widespread fraud and modernizing processes. This change will roll out starting in 2025. The new system will enhance verification tools, streamline identification, and improve the user experience. More details will emerge as the FMCSA continues gathering feedback from stakeholders through meetings like the upcoming Registration Modernization Stakeholder Day on October 21, 2024.
?? GXO Logistics Weighs Sale Amid Acquisition Interest. GXO Logistics, a $6 billion provider spun off from XPO in 2021, is considering a potential sale after receiving takeover interest. The company, which offers AI-driven logistics services for industries like aerospace, e-commerce, and healthcare, is working with a financial advisor but hasn’t committed to selling yet. GXO's shares jumped 8% on the news, despite a 17% stock drop this year. The company recently reported 19% revenue growth and has a $2.3 billion sales pipeline, with clients including Apple and Nike. Discussions are confidential, and no deal is guaranteed.
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Freight Broker Rate Transparency Debate
The debate over broker rate transparency is heating up again, with the FMCSA set to release a notice of proposed rule making this month.
The Owner-Operator Independent Drivers Association (OOIDA) originally brought this issue 49 CFR 371.3 —the broker transparency rule—to the FMCSA four years ago, accusing brokers of evading transparency.
An Overdrive survey earlier this year showed that 75% of owner-operators wanted shipper rates revealed .
This past Friday, October 11th, during Freight Gong Friday , we interviewed Chris Burroughs, incoming CEO of TIA, and Jeff Tucker, CEO of Tucker Company Worldwide, for their insights.
Background on Rate Transparency
According to Jeff Tucker, the origins of 49 CFR 371.3 go back to an era of heavy regulation by the now-defunct Interstate Commerce Commission (ICC).
During that time, all rates were public, and brokers acted mainly as intermediaries, taking a commission from carriers.
With the deregulation of the industry in 1980, brokers started having direct contracts with shippers and carriers, making private contracts the new norm. As Tucker explains:
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"It was a 1980 rule, and later that year, deregulation allowed brokers to contract freely—leading to today’s marketplace where brokers hold contracts for loads and determine rates."
Since deregulation, transparency concerns have surfaced whenever economic conditions decline.
TIA's View
Burroughs and Tucker argue that enforcing rate transparency could harm small brokers and carriers.
They believe transparency would reintroduce market obstacles, stifle competition, and make brokers’ margins targets for procurement teams.
Key concerns they raised include:
They also noted that a DOJ investigation into alleged broker collusion during the pandemic found no wrongdoing, stating the market is driven by supply-demand economics.
Burroughs added that while TIA works well with OOIDA on many issues, this is one where they disagree.
What’s Next?
The FMCSA’s proposed rule making will likely open for public comment, continuing the debate on whether transparency serves the industry or creates more issues.
TOGETHER WITH HIGHWAY
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