BUSINESS | BROKER BLUES
BROKER BLUES Carriers cry foul as COVID-19 stall erodes spot-market rates
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BY TOM QUIMBY AND JAMES JAILLET
or Northeast Transport of Crawford, Maine, business was strong at the start of COVID-19. The 35-truck fleet rode the early, albeit brief, uptick in reefer freight, but “as the shutdowns increased, the amount of available freight on the spot market had diminished,” said Rob Bisset, Northeast’s director of sales and logistics. When freight demand fell off a cliff, rates went with it. With approximately 40% of 42
commercial carrier journal
Northeast’s backhaul freight relying on the spot market, the impact to revenue has been staggering, Bisset said. The depressed rates environment, particularly on the spot market, became a prominent theme for trucking beginning in late April and continuing last month, with many carriers crying foul on brokers, arguing that freight intermediaries were using current market conditions to squeeze them down on freight bills while boosting their own
| june 2020
“When all this started, we took a hit right off of the bat, and about 50% of our work died off,” said Greg Dubuque, president for Liberty Linehaul West. “We’re lucky enough to have a few brokerage friends that are holding their rates where they need to, that understand the cost of running a truck up and down the road, and then there are those that really seem to be on the back side of price gouging.”
margins — reverse price gouging. Often, rates being offered didn’t cover carriers’ costs, forcing them to choose between running at a loss or parking their trucks. “It really seems that [brokers] are taking advantage of the market,” said Greg Dubuque, president for Liberty Linehaul West, a 40-truck fleet based in Montebello, California. “We’re lucky enough to have a few brokerage friends that are holding their rates where they need to, that understand the cost of running a
