CCIA Trucking Weblog

SHIPPERS BEWARE!

A growing problem has been identified within the trucking industry where shippers and brokers have not been properly verifying their subhauler’s legitimacy before allowing them to pick up loads and/or handing out payments.

Over the past few months, truckers have been showing up at shippers’ terminals to either pick up a load or an up-front payment using phoney documentation. In cases where the shipper did not verify the trucker’s documentation beforehand, the trucker has either made off with the Comp money and/or the load without a trace.

Often times, a trucker will request that the shipper pay a portion of his invoice, up-front, for operating costs, etc. - sometimes called “Comp” money. When he arrives at the shipper’s yard to pick up the load, that Comp money will be waiting there for him in the form of a check. The balance is to be paid after the load is delivered.

Here’s a normal series of events:

A shipper calls a broker and lets them know that they have a load to deliver. The broker then assigns one of his subhaulers to pick up that load. The broker sends the subhauler’s certificate of insurance and/or additional insured endorsement to the shipper for identification of person and financial responsibility. These papers are the subhauler’s proof that he has insurance protection for his liability arising from a collision while driving his vehicle and any damage to the cargo the shipper is entrusting him with. The trucker then picks up the load from the shipper’s yard and delivers it as scheduled.

Now that we have detailed the normal series of events, here’s what we’ve been seeing:

A shipper calls a broker and lets them know that they have a load to deliver. The broker then assigns one of his subhaulers to pick up that load. The broker sends the subhauler’s certificate of insurance and/or additional insured endorsement to the shipper. It’s important to note that, at this point, the broker has not verified this individual’s claims that he’s working for XYZ Trucking or insured through ABC Insurance. This individual simply filled-out their application and submited a certificate of insurance. The truck driver then proceeds to the shipper’s yard to pick up the load and Comp money after which he is gone and never seen or heard from again. The shipper eventually calls the broker who calls the insurance agent who informs them that the trucker is not working for their client (XYZ Trucking) and that the paperwork they have is fraudulent. The load is now stolen and the check cashed. And, that is only the beginning of the trouble as the ramifications of a stolen load begin to play-out.

As a responsible shipper, you need to be sure you’re using responsible brokers. A responsible broker will properly verify the credentials of all its subhaulers prior to sending them out to pick up a load. To do this, they should be collecting the following: driver license information, license plate information, operating authority name and number, certificate of insurance and additional insured endorsements. Once obtained, the insurance agent and/or fleet motor carrier should be contacted for verification of that individual’s staus. When this is done at the broker level, the chances of fraud are very much reduced; If also done at the shipper’s level, the chances of fraud are minute.

There may be extra work involved, but you must, in the least, put in place process indicators that alert you to improper reporting, handling and/or dishonest practices - especially when dealing with large amounts of cash and cargo.

When in doubt, call your insurance agent!

February 20, 2008 - Long Beach Harbor Commissioners yesterday voted unanimously to aprrove another part of their “Clean Trucks” program that would require all truckers to register with the port prior to entry.

The concession requirement allows employee drivers, independent contractor drivers or a combination of employee and contractor drivers to work the Port — as they do now. But for the first time, the port trucking industry will be required to meet clean truck, maintenance, security and health insurance requirements. Commissioners also finalized a $2 billion subsidy program to finance the lease or purchase of clean trucks.

The concessions require Licensed Motor Carriers (LMCs) to register their drivers and trucks with the Port, and tag their vehicles with radio-frequency identification devices so the Port can monitor compliance. The LMCs will be required to meet clean truck, security, maintenance and health insurance requirements. The Port will soon announce details on registration.

Commissioners for the Port of Los Angeles are scheduled to meet on Thursday, Feb. 21

 View a Fact Sheet by clicking here.

A note of sensability came from the government yesterday as Sen. Byron Dorgan, D-ND, introduced legislation that would stop pulling more than 50,000 barrels of oil a day off the open market and into the U.S. Strategic Petroleum Reserve.

According to the Department of Energy, U.S. strategic petroleum reserves as well as private oil stocks and refinery inventories hold the equivalent of 118 days of imports, well in excess of the 90 days required by international treaty obligations.

“We need to use a little common sense here,” Dorgan said. “I believe maintaining the current reserve is important for our economy and national security but the time to stock up is not when prices are highest. We have enough oil in the reserve for now, and we ought to wait until prices are more reasonable before adding further to those stocks.”

Dorgan introduced the bill in the Senate with a bi-partisan group of Senators, including Senator Jeff Bingaman (D-NM), Senator Carl Levin (D-MI), Senator John Kerry (D-MA), Senator Susan Collins (R-ME), Senator Joe Lieberman (ID-CT) and Senator Ron Wyden (D-OR).

In a letter to President George W. Bush, Jim Johnston, President of the Owner Operator Independent Drivers Association states,

“We also implore you to make use of your Administration’s authority and influence to ensure that American fuel producers and refiners cease their exports of diesel and biodiesel products to other nations. As you well know, with the intent to encourage and support the production and refinement of fuel for the domestic marketplace, those entities receive an extraordinary amount of taxpayer dollars in the form of grants, tax credits and other financial incentives. There is no justifiable reason those companies should accept American taxpayer incentives and then export their products. Actions such as that are nothing short of fraud. Every drop of fuel that has been subsidized by American taxpayers should be available only to American consumers.”

Are government leaders truly looking out for the American interests with respect to fuel? The points brought up by both Senator Dorgan and Jim Johnston shine light on the subject. For example, Sen. Dorgan introduces legislation to curb reserving oil at high prices above the 90-day requirement, but who is overseeing this on a regular basis? Johnston feels that we shouldn’t be exporting biodiesel (biofuel). It is now commonly accepted that deforestation to prepare for and maintain biomass creates much more harm to the environment than its benefits. The use of fertilizer to grow biofuel crops also produce more harm than benefit. Becuase of the use of corn as a source for biofuel, corn-based food products have increased in price and are expected to continue going up as the deamnd for corn grows worldwide. So, if we are going to cut down our forests for biofuel/biomass, pollute our environment and raise the cost of food products, should we then export it for the profit of a few? And should we give grants, tax credits and incentives to do it?

Let us know your thoughts on this subject.

See some very insightful and positive thoughts on the use of biofuel with The Business Edition link below.

Helpful links:

Senator Dorgan’s press release
Jim Johnston’s Letter: Owner Operator Independent Drivers Association
Biofuel via wikipedia
The Business Edition, Biofuel: good idea, bad

Here at Commercial Carriers Insurance Agency, we listen to the thoughts and cares of our clients and the trucking industry in gerneral.  More importantly, we act on that input by adding and redesigning programs that make sense for your current “real-world” situation.  It’s very important that we hear from you on an ongoing basis to know what’s happening with you and your unique operation.   In that way, we can be proactive in continuing to be your agency of choice not only this year but every year.

The often-celebrated race for independence from foreign oil has caused a perplexing catch 22.  You see, however good these efforts are for the American people and the health of the world’s environment, the end result is that it takes money away from the biggest in-your-face spenders around - the government.  Thats right!  When you move away from oil as the primary source of energy for our vehicles, you also remove a significant portion of fuel tax revenue.   As alternative energy vehicles begin to emerge onto the roads, the added fuel efficiency means less gallons of gas used and subsequently less taxes received on fuel.  That has stirred up the giants in the government and they are scrambling for replacement income.

So, will the government just look the other way and say hurray to the American people, hurray to the environment?  No way.  There have been numerous proposals already for replacement of that income, some of the more popular are:
1) replacing the federal fuel tax with a mileage-based tax.  As Senate Committee Chairwoman Barbara Boxer, D-CA suggested, you would have your odometer read at renewal of registration and pay a tax based on the annual differences.
2) an increase in fuel taxes of 25-40 cents-per-gallon
3) tolls and increased tolls
4) congestion pricing
5) public-private partnerships
6) a federal freight fee
7) dedication of a portion of customs duties;
a ticket tax on rail passengers

What are your thoughts on this issue?  Let us know.

FIRST PHASE TO BEGIN IN OCTOBER 2008 

A progressive ban of older trucks has been approved at the ports of Long Beach and Los Angeles.  The “Clean Trucks Program” as it is termed seeks to reduce harmful diesel emissions at the two ports by 80% over the next five years. Under the first phase of the program set to begin October 10, 2008, the ports will deny access to pre-1989 model-year trucks.  By January 1, 2010, all trucks must be equipped with a certified 1994 or newer model-year engine to gain entry. Finally, on January 1, 2010 any truck not meeting or exceeding 2007 engine standards will be denied access.

The bans will rely on an electronic identification system such as RFID – Radio Frequency Identification. RFID tags or similar technology will be placed in trucks and tag readers will be installed at Port terminal gates to ensure access only for clean trucks.

Right on the heels of the operational changes at the nation’s biggest West Coast ports, The ports of Seattle and

Tacoma, Washington are eyeing a similar plan. Although the proposed “Northwest Ports Clean Air Strategy”, does not specify exact dates or engine model bans, it does generalize that retrofits and bans would be a part of the plan. Major changes at these ports are set for 2015. Harbor commissioners will consider approval in January 2008.

A controversial “employees only” concessionaire-based system at the two So Cal ports is scheduled for a December 14^th vote.  This system would essentially limit port business to larger companies with the financial means to purchase pollution-reducing retrofits and/or newer-model trucks. 

LET US KNOW YOUR THOUGHTS ON THE FOLLOWING . . .  1. Will these truck bans continue at other ports throughout the U.S.?
2. How will this impact truckers currently servicing the ports? 

CCIA will be exhibiting at the Truck Show Latino this weekend at booth number 523.  Please stop by and see us.  Following each day of the show, we will be reviewing all the action (pros and cons) from the show.  Make sure to enter your feedback as well.  See you at the show.

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