🥊 TQL vs. FMCSA

Happy Hump Day. We're featuring the FMCSA's investigation into Total Quality Logistics and debates this broker transparency case has sparked online. Also, insights into Terminal's $3.1M funding, a sustainable rocket transport venture, and the repercussions of Convoy's closure on truckers make up the headlines.

In today's email:

• Three Freight Headlines: Terminal's $3.1M funding for trucking data integration, wind-powered rocket transport, and truckers' payment struggles post-Convoy shutdown.
• FMCSA Investigates TQL Amid Broker Transparency Debate
• Around the Freight Web: A dodged scam in freight brokerage, Yellow's terminals greenlit for sale, and the issues with decoupling U.S.-China supply chains.
• Carrier of the Week
• Freight Meme of the Day

TOP LANE MOVERS POWERED BY GREENSCREENS.AI

*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.

🐔 WHAT’S COOKIN’ IN FREIGHT

🖥️ Terminal's $3.1M Breakthrough. Startup Terminal has raised $3.1 million in seed funding to enhance the trucking industry's data integration with its Unified API. Founded by fintech enthusiasts Raghav Midha and Connor Giles, Terminal seeks to streamline trucking telematics, akin to Plaid's impact in banking. What does that mean? It means data transparency – getting trucking tech to all speak the same language. The investment, led by Golden Ventures and supported by Y Combinator and others, will enhance fleet management and operational efficiency. Terminal has data from over 150,000 trucks integrated into its system, benefitting carriers with potentially lower insurance premiums and improved logistics visibility.

🚀 Rocket Transported By Wind-Powered Ship. Canopée, a unique cargo ship featuring four large sails, is making its first transatlantic trips. Its sails, totaling 16,000 square feet, enhance fuel efficiency by potentially cutting usage by 30%. The ship's primary role is to transport Ariane 6 rocket parts, Europe's latest space exploration asset. Weighing 3,150 tons and capable of moving 5,000 tons of cargo, Canopée hopes to charter a new wave of sustainability in ocean transport.

🚚 Convoy's Closure Leaves Truckers Awaiting Payments. After Convoy's abrupt shutdown, truckers like Biljana Filipov and Steve Seek are left dealing with financial uncertainties. Filipov's company, Eagle Radovish, claims nearly $160,000 owed for 203 loads, with the last payment received on September 5th. Seek, an owner-operator, reports unsettled dues for services rendered until October 18th. With limited response from Convoy post-closure, these truckers represent a group facing challenges in the wake of the digital freight brokerage's unexpected demise. It also stands as another example of the precarious nature of financial transactions in the freight brokerage industry, which we covered here.

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Broker Transparency Debate: FMCSA's Investigation into TQL

The ongoing debate over broker transparency and fairness in carrier compensation rages on in this most recent development: The Federal Motor Carrier Safety Administration's (FMCSA) investigation into Total Quality Logistics (TQL), one of the largest freight brokerage firms in the United States. An investigation into the situation by Overdrive reveals key details.

The Core Issue: Carriers vs. Brokers

Carriers argue firms like TQL take big cuts from shipper payments, leaving them with less. The issue is particularly prickly given the current freight recession.

FMCSA's Alleged 'Raid' on TQL

• In late November, owner-operator Dakota Springfields of Pink Cheetah Express alleged that the FMCSA 'raided' Total Quality Logistics (TQL) and compelled them to disclose the rate paid by a shipper for a reefer load hauled in January.
• Springfields accused TQL of underpaying her for multiple stops and a lumper on the load and claimed TQL blacklisted her afterward.
• According to an email from an FMCSA official, TQL received $2,636.06 for the shipment, which reflects a 44% profit on the transaction.

FMCSA's Response

• Refuting Springfields' claims of a physical raid, FMCSA clarified that their virtual investigation involved no on-site visits: "FMCSA does not 'raid' offices of its regulated entities."
• FMCSA emphasized its commitment to broker transparency and informed about an ongoing rulemaking process in this area.

The Larger Picture: Broker Margins and Industry Dynamics

• Springfields’ claim challenges a 2020 statement by former TIA CEO Bob Voltmann, who stated that broker margins average around 16%.
• DAT Chief of Analytics Ken Adamo provided insights, indicating that:
  • Broker margins vary widely.
  • The median margin in November was only 13%.
• Adamo explained that brokers, like TQL, may have contracts set at different market rates, leading to varied margins.
• Publicly traded brokers like C.H. Robinson and J.B. Hunt report their margins, adhering to SEC regulations.

Reactions Across Social Media

SBTC's Support for Pink Cheetah

• The Small Business in Transportation Coalition (SBTC) questions why Overdrive hasn't pursued FOIA requests for rate confirmation documents.
• SBTC suggests potential bias in the trucking industry's media coverage.
• Raises questions about industry dynamics and associations with advocacy groups.

Matthew Leffler's Legal Perspective

• Leffler clarifies there was no FMCSA raid on TQL but confirms investigation involvement.
• Questions the legality of waiving FMCSA regulation 371.3 in broker-carrier contracts.
• Emphasizes that federal regulations have the same effect as laws and shouldn't be circumvented.

Mladen Prisic, Foka Logistics: A Call for Balanced Focus

• Prisic emphasizes the need for FMCSA's reasonable and enforceable regulations beyond broker margins.
• Suggests that the focus on brokers' margins, especially based on one load's data, is a narrow view.
• Points out issues like deceitful practices by some brokers and challenges in contract fulfillment.

Other Voices

The FMCSA's investigation into TQL has ignited a complex debate. Carriers, advocating for fairness, highlight the need for transparency in broker margins, citing FMCSA regulation 371.3. Brokers, on the other hand, focus on the flexibility and business realities of varying market rates. Both sides seek a balanced approach, with legal experts emphasizing the importance of adhering to federal regulations to ensure equitable practices in the freight industry.

GET INTEGRATED WITH OTR SOLUTIONS BROKER SERVICES

The trucking industry is crazy right now, and being a broker can be stressful. Managing your invoices, billing, collecting, carrier-base, and cashflow can feel like an impossible task, but OTR Solutions has figured out the impossible.

They eliminate cash flow problems for carrier payments and ensure margin funding in just 24 hours with broker invoice factoring. OTR Solutions takes care of billing and collection processes with your shippers. With lightning-quick and accurate invoicing, your customers will never need another broker to handle their freight needs. Kick back, relax, and let OTR take care of your brokerage.

If you want to know more, check them out here or text “OTRFC” to 80483 to see what they can do for your business.

AROUND THE FREIGHT WEB

🚨 Dodging a Double Broker Scam. Max Nikiforets, CEO of Critical Brokerage Services, shares a near-scam experience, raising awareness on freight brokerage fraud. Key red flags identified include mismatched phone numbers, suspicious addresses, inconsistent company names, and overeagerness to book at low rates.

🏭 Yellow Terminal Sales Approved. A bankruptcy court has greenlit the sale of 130 Yellow terminals for $1.88 billion, significantly over the appraised $1.1 billion.

🌏 U.S.-China Supply Chain Entanglement. Efforts by U.S. companies to diversify away from China prove challenging, as revealed in a recent analysis.

🏆 STG's Secret to Success. In this clip from the FreightCaviar Podcast, Geoff Anderman of STG Logistics, a $2 billion company, reveals what it takes to excel in business.

🚢 Jaxport Cargo Volumes Dip. October saw a 6% year-over-year decrease in Jacksonville Port Authority's cargo volumes despite a rise in loaded exports.

🚛 Bridge Blunder in Chicago. A Grasshopper Trans driver's trailer was wrecked after getting stuck under a bridge in Chicago, something that happens pretty often, according to the video's commentary.

FREIGHT CONFERENCES WE'RE ATTENDING

Manifest Vegas, February 5 - 7, 2024, is the world's largest global supply chain & logistics tech event, bringing together Fortune 500 global supply chain executives, logistics service providers, cutting-edge startups, venture investors, and technology leaders.  Join 4,500+ supply chain innovators to foster new strategies and relationships. Receive $200 off your ticket with our exclusive link.

CARRIER OF THE WEEK PRESENTED BY LOSTFR8.COM

Founded in 2018 by a Yellow alumnus, Samco Freight has grown from a startup to a major logistics provider with a fleet of 30 trucks and over 50 trailers. Specializing in full truckload services across the U.S., they offer dry van transportation, expedited shipping, and dedicated runs, with a focus on technology and efficiency, including real-time Samsara trackers. This Cincinnati-based, family-owned business is rooted in Midwestern values and combines personal touch with professional service. Under the leadership of Shawn, who expanded from 1 to over 30 trucks, Samco Freight is dedicated to growing its services and strengthening customer relationships. Check out their LOST FR8 profile by clicking here.

FREIGHT MEME OF THE DAY

Also, check out:

• 🎧 The FreightCaviar Podcast. Listen to this week's podcast on Spotify & Apple Podcasts.
• ☕️ FreightCaviar Essentials. Purchase a FreightCaviar hoodie, long-sleeve, or mug by clicking here.
• 🎧 The Bootstrapper's Guide to Logistics is a podcast that highlights and inspires supply chain entrepreneurs, sharing their stories and building a community from the ground up.
• Want to get your brand noticed by freight brokers? FreightCaviar can help. Work with us to get your services featured in our newsletter, podcast, and more. Plus, we write great articles about what you do. Get in touch with Paul at pbj@freightcaviar.com to learn more.
• Need a TMS (Transportation Management System)? Use our referral code RA-FreightCaviar! to receive 3 months of AscendTMS Premium for free. It only takes 20 seconds to sign up and no credit card is required. Click here to learn more.