Mark Twain said, "Get your facts first, and then you can distort them as much as you please. " The insurance salesman and lawyer trying to sell this newfangled cargo loss and damage insurance are assuming no one knows the facts. They move right to their distortions.
If they were not playing fast and loose with my industry and my customers' and carriers' best interests, I'd be busy moving freight, not writing. I don't have anything against anyone selling anything. However, if my industry is being misrepresented about crises that dor't exist or about some inherent flaw in the system that doesn't exist or if, because a one-in-a-billion event occurs, someone outside the system says, "Let's all dismantle the system and buy my product," then I guess I lose my sense of humor. Here are some massively compelling facts.
Tens of billions (that's a "b") of dollars of freight billing are arranged annually by brokers. Their market share is still growing. Something is going awfully right for all parties.
Since they are arranging the shipments, brokers are in an excellent position to prohibit loss and damage and to mitigate it when it happens. For example, while the truck is still at the dock and he or she is talking to the driver and receiver on the phone; no one is better positioned to minimize loss. And, of course, no one better to initiate, process, negotiate and get claims settled long before insurance and lawyers need be involved.
Any business-like broker has contracts in writing with the trucker which lock the trucker into full, Carmack liability, primary responsibility, primary CL&D insurance, holding others harmless, etc. Broker Contingency CUD insurance is a third level of insurance for the shipper. This insurance cuts in only after the trucker's and its insurance company's exposures and responsibilities fail to respond.
Thousands of contingent policies are sold and renewed every year by thousands of brokers and have been for more than 15 years at thousands of dollars a copy. Anyone who is savvy enough a businessperson to survive in the hotly competitive service industry of motor carrier brokerage does not buy things that don't work well. If the policies did not pay claims, as has been alleged (a bare-nekid lie, of course), who would buy? Furthermore, insurance companies of all types are sued everyday for not paying claims; judges usually say, "Pay the man." With good brokerage practices (the right carrier, well supervised with assistance at the other end of a toll free fine, etc.) damage is rare and claims even more so. My firm's contingent CL&D claims are in the range of 1 in 15,000 shipments. I might also mention that, yes we have had shippers' claims paid by our contingent insurance firms. One claim was for $63,000.
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 We have found that a contingent firm's greatest service may be in having the legal staff to take over the process so that insurance lawyers are talking to insurance lawyers, not to me, my customer or my carrier.
The shipper's volume of freight encourages the trucker to protect the freight and evaluate the occasional claim sincerely. The broker's additional volume of freight with that same trucker from other shippers leverages this shipper's own volume in this regard.
The present regime of brokers structuring themselves properly in their business relationships, preventing damage and claims and negotiating many of them before they reach insurance companies and lawyers should stay in place and continue improving itself
The present regime also, by keeping the trucker in the primary position for protecting the freight and being responsible and insured for loss and damage, keeps the financial and reputation pressures properly placed as I tried to describe in my letter published in the Nov. 1, 1999, issue of Traffic World.
If the brokerage world valued this new product it would buy it. To my knowledge it has not. The salesman and lawyer now are promoting it to the shippers, the brokers' customers. Shippers cannot buy it and are not "in the broker's shoes" to be able to weigh the advantages and disadvantages. Unfortunately, the shippers are in a position to pressure the broker into buying it. That promotion strategy strikes me as less than professional, to put it mildly. It's a strategy offensive to the promoter's ultimate customer, the broker. It offends this broker.
But if you really want to get me steamed and writing letters, then in your zeal to sell your product you won't be as careful and respectful of the facts and details as you should when you represent my industry in your pitch, silver-tongued or otherwise. And that's what I see.
The customers, carriers and brokers of my industry keep voting with their purchases. Their overwhelming opinion in massive numbers is that brokerage is doing a great job including the many levels of CL&D protections that have built up and been proven over the years.
I agree that continued discourse carries the danger of keeping an issue alive that really deserves to die. But, given all the baloney, obfuscation and phony horror stories in a vacuum, someone has to review why the time-tested broker CL&D regime works so well.
Tucker is president of Tucker Co.,Cherry Hill,N.J.
February 21, 2000 * traffic WORLD * 35
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