Freight Management Services
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900 Dudley Avenue
Cherry Hill, NJ 08002
Phone: (856) 317-9600
team@tuckerco.com
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Letter to the Editor
By, Jeff Tucker, CEO Tucker Company
March 7, 2005
Don't Raise Broker Bond
It’s that time again. The Owner-Operator Independent Drivers Association has made its seemingly annual pilgrimage to the Department of Transportation seeking a higher broker bond.
OOIDA’s Jim Johnston describes several ways the “public is harmed by illegal broker practices” as reason to move the current $10,000 surety bond to his requested $300,000-$500,000. His keystone reasons to bring about change are dead wrong.
Time after time OOIDA’s arrow falls short of the mark when describing the root of its memberships' accounts receivables problems. In addition, OOIDA is trying to redefine the purpose of the broker bond to be that of A/R insurance to the carrier community.
Increasing the bond will impact one group – legitimate brokers and the shippers they serve and will create unfair barriers to entry. Illegal unlicensed brokers, and the tens of thousands of carriers who illegally broker freight – the real villains in OOIDA’s script – will go scot-free, will surely not buy the higher bond (they usually don’t have any bond anyway) and will continue stealing from unsuspecting OOIDA members.
Our studies show only about 14 percent of carriers check credit. If 86 percent don’t bother to check credit, how in the world will a higher broker bond change this suicidal business reality?
OOIDA claims, “it is difficult, if not impossible, for the average trucker to know whether any particular broker is fiscally sound.” Dead wrong again, Mr. Johnston. In fact, that statement is peculiarly absurd coming from any businessperson’s pen. When a businessperson elects (a key word) to do business with another businessperson, the lending businessperson who wants to remain in business always checks credit before he lends money. When you pick up and deliver a shipment on credit, you are in fact lending money. When you lend money to strangers based on convenience, laziness, trust or naivety, in our unfair world, you get burned.
OOIDA members need to be continually educated on safe business practices. There are plenty of commercial alternatives to aid collections, such as collections agencies, factoring companies, the carrier’s lien and accounts receivables insurance companies. Without a meaningful platform of membership education by OOIDA leadership, and members’ strict adherence to good business practice, no amount of bond will provide OOIDA members with the A/R insurance they are looking to find.
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