To whom it concerns:
We write on behalf of our client, Ezlogz, Inc., a logistics and compliance support company for truckers and small business owners in the trucking industry, to report a systematic practice by industry brokers to circumvent the disclosure requirements set forth in 49 C.F.R. § 371.3(c) (hereafter, the “Disclosure Rule”). The brokers work with retailers to obtain loads and then broker those loads to independent operator truckers or to small trucking companies, among other carriers. Under the regulations set forth Federal Motor Carrier Safety Administration, Department of Transportation, brokers are required to both maintain records – including the amount of compensation the brokers receive from brokering the load transaction – and share such information with all parties to the load transaction.
In reality, brokers have banded together to conceal from drivers the compensation cut the brokers are taking in brokering the loads. The result on the operators (many of whom barely make enough money to support their families) is wage suppression for the drivers. By refusing to comply with the disclosure requirements, brokers are not compelled to compete over price – the fees they take. The brokers have, in effect, formed a cartel and have – as an industry – colluded to conceal broker fees from drivers and trucking business owners in violation of the regulations.
Brokers accomplish this in a few ways. First, the industry has, at part of its standard contract, a “Broker’s Records” section that requires the carrier to waive the its rights to obtaining records pursuant to the Disclosure Rule. It is an industry-wide practice, so carriers have no choice but to sign. Second, where small businesses or independent owner-operators are concerned, brokers target non-English speaking drivers and others who are not aware of the Disclosure Rule or will not contest the broker’s refusal to share the required information. Those truckers who do request information under the Disclosure Rule are systematically blacklisted by the industry.
We are asking that the Department of Justice investigate the industry to confirm the widespread use of the required waiver language (which, incidentally, begs the question of whether such waivers are legally enforceable) and the targeting practices employed with owner-operators. Simple subpoenas to various brokers, including, for example, TQL, CH Robinson, Coyote Logistics, JB Hunt, Trinity Logistics, and Schneider could be a start. In addition, persons who have left the broker industry will almost certainly confirm that they work together to ensure that commission rate data required under the Disclosure Rule is never provided. Finally, drivers and business owners (and we can connect you with several) will confirm that there is no ability to ever negotiate the waiver of the Disclosure Rule that brokers uniformly require.
Please consider initiating this investigation as soon as possible. The industry has been ravaged by COVID-19, and the brokers anti-competitive practices only exacerbate the difficulties that drivers and small business owners in the trucking industry is facing.
We look forward to receiving your response.
DLA Piper LLP (US)
To whom it concerns: