The US Department of Justice continues to investigate freight brokers.

Last month, there were many events in the field of freight transportation and the negative impact of brokers on them. One of the significant points was the appeal to the Ministry of Justice regarding the beginning of the investigation of alleged violations of the Sherman Antitrust Act of 1890, which criminalizes the conspiracy of corporations to set prices.

The appeal was compiled by CJ Karman, founder of Ezlogz, and his lawyer Anthony Todaro of DLA Piper LLP. At the moment, this investigation is still in the process. They predict that it will take a certain period of time, given the specifics of the ministry.

According to CJ Karman, our main goal is to ensure fairness and transparency of relations between carriers and brokers.

Truckers have the right to receive decent payment, regardless of what prices brokers set.

Also last month, Karman met with Mike Landis of the US Transportation Alliance with Mark Meadows, chief of staff of President Donald Trump, and Jim Mullen, Acting Administrator of the White House Federal Motor Vehicle Safety Administration. One of the most important issues was ensuring transparent reform of brokers, namely compliance with 49 CFR 371.3, which requires brokers to provide a copy of the transaction record to carriers at the request of carriers upon delivery of the goods.

CJ Karman asks FMCSA to ban the use of such provisions. It is supported by both the Association of Independent Drivers and the Coalition of Small Businesses in Transport.

At the same time, Jim Mullen said that the FMCSA has not yet received a single complaint, claiming that brokers do not comply with 371.3. In addition, Mullen also expressed concern about the initial intention of regulation. According to him “Motor carriers paid the brokers directly versus the shipper paying the brokers."

According to lawyer Todaro, the widespread use of 371.3 waivers is evidence of collusive behavior.The brokers are effectively encouraging that [waiver] requirement so that they can use it as a shield to not comply with 371.3.

Todaro informs that the DOJ most likely will begin by investigating the practices of the largest third-party logistics (3PL) companies.

“It makes sense that the parties they are most interested in are the biggest players because of their ability to influence the market,” he explained.

As for Karman, he says he will continue pushing the issue with Meadows.

By Denis Kirston
22 / 06 / 2020
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Stop cheap freight by enforcing transparency (371.3)