Lightning like Steve McQueen I'm in a fast lane when the light turns green And I built tough I ain't nothing but grit. Cause I made rugged blood sweat and spit yeah, like a horse I fly for a bumpy ride I like to play hard but I work harder and I weather the storm Because I'm built stronger. What is up? Ladies and gentlemen? We are back. We are live. It is the Freight Coach Podcast, the top podcast in transportation coming to you guys every single weekday, 8:30am Pacific, 10:30 Central, to break down some industry headlines. But most importantly, you guys provide some actual insight into what all of this means. And today's guest is literally the most qualified person to talk about what we're going to talk about today.
And you know, and break this down to you guys, because I think like, in today's day and age with the Internet and everything, everybody's got an opinion, but, like, is it actually valid or is it just somebody's emotion? So we're going to talk about the law itself, but we're also going to talk about this guy's major promotion that came up here as well, and somebody who I am very proud to have leading this organization now, and he's also a really good friend of mine as well. So with that being said, I got Mr. Chris Burrows, the new president and CEO of the TIA on the show. Chris, thank you so much for joining me.
Thanks, Chris. Appreciate it. Always, always been on your show, man. Appreciate it.
Dude, it's a blast, right? Because like I was saying before we started recording, you speak D.C. You speak policy. And it's like you can take, you know, as a. I just renewed for my fifth year as a member of the TIA at this point.
We appreciate that.
And you get to take all of my jumbled up opinions on stuff and be like, yeah, that's a very valid concern. But this is how we say it to get, actually get a bill passed in D.C. Because, you know, my frustrations as a citizen of this country probably don't fly to go in there and actually get meaningful change done out there. And that's why it's like, I love having somebody like you now leading the charge.
Yeah, we appreciate that, Chris. And it's truly an honor to take over as president, CEO of this great organization.
Yeah, dude, I'm looking forward to it. Right. And I mean, it's perfect timing here because you just, what, it's been just a couple of weeks now since you officially took control.
Yeah, just. Just a few weeks. Yep. It's actually day, my official first day, the FMCSA put out the notice post rulemaking on broker transparency. That was a nice present for my friends over at the agency.
So what you know, dude, I want to talk about this right? Because this is one of those things because you know I've had this show going for it'll be you know, four and a half years now at this point. And broker transparency keeps popping up every other cycle. Right. And it's seemingly you know my opinion is, you know, I understand why it's you know, driving memberships and everything else. It's a great rallying cry that goes on. It went away for a few years now it's seemingly making a comeback. But you know, what is freight broker transparency like? Why is this a thing that people are wanting to push? What is this statute that's out there that is like people are kind of clinging onto it seems.
Yeah. And funny enough when I joined the association over 13 years ago, this was actually one of the first issues that were dealing with back then was know broker transparency. And there were some great discussions with groups like ATA and OIDA and we got some positive language out of it. The Fighting fraud Transportation Act. But yeah, so really what it, what this 371.3 which everyone talks about this part of the code of federal regulations really goes back to, you know the. There's a federal Register notice from May 12th of 1980 that talks about the business practices or practices of freight brokerages and what the Interstate Commerce Commission which no longer exists. They were sunset. But what they were concerned about and talking about when they promulgated these regulations were a concern of the ICCs of freight rebating.
So essentially kind of how the equation was set up was obviously you have your shippers, you manufacture people who make things, let them move their product. You've had your trucking companies not nearly as many, not as nearly as a competitive marketplace obviously coming off of deregulation as it is today. Same with freight brokerage. At that point in time brokers were a commissioned sales agent of a trucking company. So the ICC was worried about freight rebating where a scenario where a freight broker could be the same person or common ownership as a shipper and they were concerned about them double dipping. So they put this 371.3 in place to the sharing of financial information between all the parties involved in transaction.
Okay. So essentially what I'm hearing is because like I've done the research on this, you know, again I don't pay attention to a lot of the social media chatter that's out there. I just always like to go straight to the source and do my own research on it. And from what I found is the relationship that a broker and a carrier had back when this was written is vastly different than what it is today. Right? Where it was like, kind of like how I go out there, like I just made cold calls before we jumped on the show today. Do a shipper, I would almost do that as a, you know, go out there and try and find trucking companies, find the capacity first and then go and sell that capacity to a manufacturer. Where now it's kind of, it's flip flop, right?
Like most people go out, they find freight themselves from shippers, then they go out and resell that out there into the open market to the carriers. And when I'm reading this now, man, it almost seems to me that this freight broker transparency thing is more applicable to a dispatch service in today's day and age than it is into a freight broker. And that's because the trucking company hires a dispatch service for a percentage that's going on out there.
Yeah, you're absolutely right. That's the perfect scenario. And it wasn't, you know, talking with companies like Tucker Co. Worldwide, which had one of their first authorities, you know, talking with Jeff and Jim, you know, they indicated, you know, back when their dad and their grandfather was running the company, it wasn't long after this regulation was promulgated that the market shifted. And it shifted for a variety of reasons. Obviously financial being a huge part of that. You know, the shipper terms and payment obviously can be extended, you know, quite frankly, pretty far out, you know, 60, 90, 120 days, whatever the case may be. You know, that's a long period of time for a trucking company, or quite frankly any company to kind of float that cash.
So the market shifted to where we're generally where we are now for the freight broker, where you perfectly lay out the scenario. But again, when this rule was written, the intention of, you know, we have to look, you know, and doing government relations, you got to look at, you know, intent, you know, what's congressional intent? What's the agency intent? The intent of this was to go after the double dipping when a broker was a commissioned sales agent paid by the trucking company for finding them freight.
So how are you guys out there working, you know, because I've seen some of your guys, statements that you guys have released about this. Are you guys Mainly going in not to remove this from anything, but change the verbiage inside of this to more accurately reflect present day broker carrier relationships.
Yeah, I mean, at the same time that the two organizations filed their petition for rulemaking, we did file our own petition for rulemaking to eliminate 371.3. Our petition for making was declined. The agency didn't feel like there was enough justification to delete this regulation, but they did grant the two organizations petitions to move forward with it. So obviously we're being extremely active on this issue. This is a major concern for us. You know, it is a regulation that currently exists. Sure. You know, it must be adhered towards. If a carrier were to request that information from a broker, they should provide it and then, you know, probably shouldn't make it difficult as, you know, come to the office between the hours of 1 and 2 to pick up, you know, your packet. You know, you got to make it easier.
But we don't, we firmly believe that this regulation is no longer required, obviously in the current marketplace, as we've laid out and should be eliminated. And we'll work with the new administration coming in to hopefully achieve that goal. But at minimum, we do not want to see it enhanced. And you know, the notion that, you know, the proposed rulemaking, the positive thing of it was that, you know, the agency, the fmcsa, although this is a massive overreach by them, they did say, hey, without congressional authority, we don't have the right to come in and say, private companies, we're going to intervene in your contract negotiations. But still, you know, there are some major concerns obviously with, you know, the way this is set up.
As you know, there are a lot of proprietary contracts that exist between shippers and brokers that would be required to break those and oftentimes have to pass those contract terms and conditions onto the carriers to make sure that remains proprietary and not shared with the public. So there are a lot of concerns with this. You know, we're activating our members to go in and write campaigns. Like I said, we're talking with transition team for Trump. We're talking with Congress about it as well. You know, we're not holding anything back in order, getting the message out and really kind of going after to defeat this massive overreach by this administration.
Yeah, I mean, I personally think like, I mean, my honest assessment is like, this won't really gain legs out there on Capitol Hill. I feel like from a priority standpoint, this is vastly below fraud and like identity and all of that stuff that's actually out there that's ruining the, you know, the industry for far and large, you know, and I think that if we're going to go, you know, one thing I think would hold a higher priority standpoint is, you know, and I want the standards of the industry raised as a whole, right? Like this isn't just an attack on drivers or dispatch companies or brokers or anything like that.
But, you know, when there's more hands in the pot, you know, like the dispatch service, for example, they're charging a fee as well, and they're literally going out there to a load board and we're dealing with them. And it's like if we're going to clean up the process, like, I mean, I truly think a lot of the drivers out there need to talk to their dispatch service because I can't tell you the amount of times that I have booked a load as a broker with the dispatch service who has said, don't tell the driver what we're paying you, all right? Like, I guarantee if we, you know, for some reason subpoenaed all of the phone records that are out there in regards to freight brokers that has been said more times than not out there. So it's like, who's really double dipping here?
Who's really taking advantage of the situation at hand? Because, you know, if you. Again, you guys, data is everything here. Numbers don't lie. The large. The top 10 freight brokers in North America are essentially all publicly traded for the most part, right? You can look at their financial reports and you can put a pretty good guess on where things are as a whole. And then again, something else just recently came out. I don't have my sources to cite them, but the top 10 freight brokers control 50% of the brokered market as a whole. So if you just basic math with that one alone, the margin percentages that they make as a whole are probably very reflective of what goes on out there in the industry because like, they have all the buying power.
And I truly feel like if, say this does like, worst case scenario, this stuff progresses. Chris I think what this honestly opens it up to is it removes the small carrier from the industry, it removes the small broker from the industry as a whole. Because if everybody knows what everybody's making, the people with the deepest pockets will just destroy the market in the short term. They will eat those losses, everybody will be bled out financially and then there will be a complete monopoly. There will be an oligarchy of freight, essentially that will breed from this if this happens. That's where my mind goes from the long term.
No, yeah, I think you're absolutely correct on that. Our concern with this and I think TIA is often painted as maybe recently kind of like anti carrier group. We are not. We are pro carrier group and we're especially a pro large and small carrier group. We have great relationships. I personally have a great relationship with Aida. I've done a lot of work with those folks over the years and think that's a great organization. But yeah, this potentially could have huge negative impacts on the small carrier, the small broker and ultimately the end consumer. We're all going to pay for this additional regulation, additional cost to the market. The notion that I think there's some groups out there that think that hey, this is a way of getting circumventing, getting around the broker and the transaction.
These large shippers are not likely to going to work with tens of thousands of small owner operators. They're just not. So it puts a lot of freight to the large carriers and to your point, potentially could create this massive monopoly. I think you raised a good point about talking about on Capitol Hill with larger issues. We like to look at data as well. And fraud is one of these issues that's really impacting industry. And when Ann and I, our former CEO talked with FMCSA back in 2020, we said, hey, you've got this national consumer complaint database. We know there's all this talk about broker transparency and everything that's going on. How many complaints in there are there about broker transparency? And they said, you know, at the time it was zero. I think there's a, there's been a few now.
Yeah.
But we said, okay, how many are there related to fraud? And they said there's about 80,000 complaints related to fraud and double brokering and just, you know, the issues that everybody's dealing with on a daily basis. So you've got an agency that's really kind of laser focused and truly believes that broker transparency is tied to safety. We would disagree with that, but you know, heavily focused on transparency and you know, meddling in private negotiations between businesses hanging their hat on this 1980s regulation, while we have 80,000 complaints dealing with fraud and they admitted they've done nothing with these. You got 92% of trucking companies who don't have a safety rating. So the agency has failed on every front of providing actual safety data on carriers to the general public, which obviously has created massive problems in terms of nuclear verdicts and carrier selection processes.
Etc. You know, in our opinion, the FMCSA just has completely failed on this and really needs to get their priorities back in line with the industry and the American public.
Yeah, I'm 100% aligned with you there, man. I feel like the Department of Transportation and the FMCSA really needs to start looking at what's actually a critical issue moving forward in the next, say, five to 10 years, as opposed to what is kind of seemingly a selective issue that goes on out there. Right? Because, again, I'm only exposed to so much stuff out there, but I have not seen this argument when the rates were high and everything. And again, you guys, I am a capitalist. I want everybody to make money. All right? I want everybody to make money. I want everybody to be successful. But I feel like, again, because, like, my kind of final thing on a lot of this, it'll always deduce it down to this.
Chris, if somebody else makes money in a transaction, how does that make you a more profitable business? Right. If you cannot, if you don't even have a P and L, for example, how can you, knowing what somebody else has in their bank account, how does that make you more money? How does that actually make you a more profitable company? You know, again, I feel like it's so easy to sit there and outwardly point at everybody else on why your business sucks as opposed to looking at yourself and seeing, I make $10,000 a month, hypothetical example, in revenue, maybe I should stop spending $15,000 a month, or maybe I should go out there and talk to my financial partners to see, can I renegotiate my loan terms? What can I do?
I mean, I have these people come on my show all the time from the financial side of things, insurance, all of this stuff to talk about how can you run a better business as a whole? And I just feel like more people would be very upset at what they're being told, as opposed to reality, about what brokers actually make on freight, you know? And I know that there's some people out there who are saying that, you know, whatever, don't believe everything you see on social media, okay? I think, like, that's a very good starting point because brokers making 50%, unless it's a $200 LTL shipment and they made 100 bucks on it, that's about the only time I could see that happening.
Because, like, if you're out there moving and because it is very competitive in the full truckload space, drive in, reefer flap, advanced, very competitive, you're not pulling Those kind of margins that are out there. I've never personally witnessed that in the 15 years I've been brokering freight. Maybe I'm just a bad freight broker then. Right. Maybe that there's people out there who have these endless budgets, but I've just never seen them. And then again, I think ultimately when it breaks down to the transaction level, how does this make you a more profitable business? Because again, you have to go out there then and get the business from the shipper. And when you go in there, because I, even as a broker, I'm dealt with this. Right. We go in there.
If I can't move the needle for them from a capacity standpoint based on where my business is at today, say maybe they need a broker that can move 50 or 100 loads a day. I can't do that. Guess what? I'm not going to get that business. They're not even going to give it to me. And it's like, I feel like we got to start looking at. Instead of, oh, this is the, this is why I'm. My business sucks. No, it's not. Ultimately, you got to start inward and then work yourself outward like that.
No, yeah, you're absolutely right. And you know, from, from an organization perspective, we want everybody to succeed. Obviously in this.
Yeah.
In this industry, we wouldn't, you know, we wouldn't be here without small owner operators.
Correct.
There are lifeblood for our capacity to make sure that we're moving our customers freight. And that relationship is solid and should be solid. So. Yeah, I mean, you're absolutely right. You know, you're talking about, you know, budgeting. I wish the federal government did a much better job of that as we're sitting here $35 trillion in debt. And you know, I think I was telling you before we, I just saw this stat over the weekend that, you know, the federal government spent, you know, $46 billion roughly on the IRS to increase enforcement and go after some of these tax cheats, if you will. They brought in 4 billion from that 46. So the math on that is not really good in terms of roi. But hey, that's the photograph for us.
So, you know, their infinite wisdom in a lot of things is pretty much wrong.
No. And that's why it's like I'm really, I'm looking forward to how things are going to progress here, to really clean up a lot of this stuff, because I feel like the fmcsa, for example, and the dot, I truly feel like we have our priorities just completely backwards on where Things need to be. Because if you want to talk about freight theft as a whole, the economic cost that has out there in the market, what that does to the end consumer prices, you know, it's like, I mean, I. It's pretty simple. Like when you go to the FMCSA and there's like 800 mcs at the exact same address, like that, that's acceptable. But like, we're talking about how somebody, you know, again, I don't want to go too far off because I'm gonna start, I'm gonna start freaking here. But.
So, dude, what's on the docket for 2025 from you guys? Are there any other bills that you guys have in the works right now that you guys are really looking forward to getting some exposure out there?
Yeah, yeah. Obviously, you know, kind of my big two priorities for the immediate future in 2025 is obviously continuing to enhance our advocacy efforts. You know, that's kind of a no brainer. That's my background. I think that's a core component of our organization is being the voice of the industry on Capitol Hill and additionally member engagement. So you're going to see a lot more regional meetings from TIA in 2025. In addition to enhancing those advocacy efforts, I think, you know, the other piece of legislation we've been working on for a while is really trying to get to the core of these nuclear verdicts that are going on. Obviously, tort reform is extremely hard, if not nearly impossible to get in the current political environment.
But we've got to find some sort of solution to these massive nuclear verdicts that are coming down on companies that again, are taking the information that we have available to us, albeit not a lot of information. Again, 92% of trucking companies are unrated. And unfortunately, when there's a, an accident, you know, everyone's getting brought into this. The shipper, the broker, the carrier's got to deal with it. You know, we're all familiar with the Werner case that happened, you know, no fault of their own, but, you know, there's obviously a huge settlement there. So we got some legislation working on that. Obviously we have legislation on dealing with the issue of fraud that we'll look to resurrect in the new Congress to get that passed.
And again, you know, that piece of legislation, you know, really is just telling the FMCSA, hey, these are regulations and authority and enforcement authority you guys already have in the books. We, as Congress mean it, so let's start enforcing to your Point, the principal place of business requirement. They're not enforcing that. You know, we flagged that house in Wyoming for the agency. They sent an investigative team out, they came back and said, hey, there's no one operating out of this, no less 400 trucking companies. And I said, what are the next steps? And said nothing, we're not doing anything with it. Oh, great. You know, it's just a, it's a completely inept agency at this point.
Yeah.
That we've got to start getting to some of these core issues and addressing problems that exist like fraud, like finding reliable truck parking for people to safely be able to park their vehicle at night. You know, let's get safety ratings for all the carriers. Let's make it. You know, that helps everybody, helps brokers and I'm small, large trucking companies helps everybody.
That's wild to me that they. Well, it's not wild to me that they sent an investigative team out there and that's. But what's wild to me is they proved that there was nothing there yet they're literally doing nothing with that. Right. Like, I, I just feel like it, you know, like that to me is the federal government in a nutshell right there. Hey, yeah, we spent more money to go check out the problem, but we've identified that there's a problem, but we're not going to do anything about said problem. Right. Like, I mean, imagine how many people I would love to see if somebody could break down the data on the numbers of fraudulent shipments that, those grouping of carriers alone, what that cost the small carriers out there as a whole in lost freight and everything else. Right.
Like again, it's just that to me is that would be the most pressing issues and then especially with, you know, advancements in AI and other forms of technology, that it's going to be harder and harder for people to detect who these people actually are. And then essentially pretty much it's going to be a bot farm that's out there double brokering freight here in the next couple of years and yeah, Cody, I agree, man. We need Elon and Vivek to start digging into the FMCSA and the DOT right away.
Yeah, I think Doge should take a good look at the fmcsa and you know, they got a ton of money through that bipartisan infrastructure package a few years ago, you know, hundreds of millions of dollars and a lot of it was to bring in some more enforcement team to the agency. You know, it was a year or so after the Money had been allocated out and we asked them, we said, hey, where do you guys stand on bringing in some more enforcement arms for the agency? And they're like, well, you know, we're having a hard time hiring a recruiter. So, you know, we haven't really got far. I mean, it's always a resource issue. It's always going to be a resource issue. I mean, literally Congress could write a blank check to the FMCSA and it always will be a resource issue.
So when does it become a resource? When it's really not a resource issue. But when does it become, hey, there's some serious problems going on, this agency that need to be addressed in terms of, you know, waste and abuse.
Yeah.
So, you know, we're, you know, I hope they. Hope they take a good look at it and see what they find.
Yeah. And that's exactly where we need to be. Right. Like we need to start, you know, and this is why it's like, I mean, I'm glad you brought up the whole more regional meetings and stuff like that for the members because I feel like a lot of this stuff, you know, again, so many people are so ingrained in their day to day lives and businesses and everything else that a lot, I mean, I'm not shocked anymore at this, Chris, because like, I mean, I literally interviewed people every single week on this show and it is like, man, everybody's in there, rightfully so. They're in their own little worlds. They don't know exactly all the laws and rules and regulations that are out there, pending bills and stuff like that. So it's like, I like to see this and I think it'd be cool.
You know, again, I'm not going to put any words in your mouth, but like, maybe do some cross pollination with some of the trucking groups as well. And on the regional basis, maybe we can co host some events where we can kind of get a better understanding about what it is. Because I truly feel like ultimately we all want the same thing. Right. Like, we all want to make more money, we all want less hands in the pot and everything else. So I feel like it'd be nice to kind of see that joint effort out there. But again, people, you need to get involved in your local, you know, your local groups, especially if there's regional meetings that are going on out there. And if you're really upset, call your congressman. All right? It's all out there.
Call your congressman and start voicing your concerns that way.
Yep, absolutely.
Well, perfect man. Chris, as always, I appreciate you joining the show. And, you know, I always like having, you know, you and the TIA on the show because. Because, like, you guys are literally at the forefront of this stuff. And I hope this clears up a lot of the confusion that's out there for people because everybody's got an opinion on social media, but you guys are the ones who are actually fighting this step out there on Capitol Hill. So, Chris, thank you so much for joining me. I mean, what's the best way? Just go to tianet.org for everybody to find out more.
Yeah, to visit us right there. Got everything online. Appreciate it, Chris.
Perfect. Sounds good, Chris. And that's going to be it for today, you guys. We got guests coming on this week. I know it's the week before Christmas, but we don't stop here, you guys, because I'm actually in the trenches making things happen. But as always, if you guys got value in what you heard, subscribe to the show. You guys share it out there. Dear network, because if you see value, your network's going to see value as well. I appreciate you guys. I love you guys, and we'll be talking to you soon.