Transparency in high demand, though seldom formally sought from this broker: Part 2 with Paul Berman


What does East Coast Transport Vice President of Logistics Paul Berman think about all the talk around potentially new requirements for freight-transaction transparency, and the existing regs? That was, after all, partly the question Berman joined me for this two-part edition of Overdrive Radio to answer to begin with. That answer is complicated, and involves honest questioning of the utility of after-the-load rate transparency for any owner-operator and more.

What’s not so complicated is Berman’s answer to the question of just how his own company handles right-to-review requests under 49 CFR 371.3, the current reg that requires brokers to make records, including the brokerage fees assessed to the shipper, available to carriers upon request. That regulation, and the potential for its enforcement outside of carrier, broker and shipper contracts, played a big part in May’s protest actions by truckers in D.C., of course. And the existence of contract language in some instances requiring carriers to sign away the right to review continues for many to feel like a huge red flag that, basically, brokers have something to hide.

Berman’s company’s contracts with carriers don’t utilize such language. It’s been explained by others as the way the broker chooses to deal with non-disclosure requirements handed down to them from their shipper customers. Berman and company deal with those shipper demands, too, he says. East Coast requires an in-person review for transparency rather than offering any electronic disclosure – OOIDA has asked Congress to include an automatic, electronic required disclosure to the carrier as a provision in the next COVID-19 economic relief bill that’s been in talks now for weeks. OOIDA also has suggested the in-person review required by many brokers is simply a way to put a barrier in front of a carrier that in effect makes transaction review that much more unlikely.

For Berman, though, there’s more to the in-person review — it’s East Coast’s way of maintaining some measure of control of that information in a good-faith effort not to violate their contracts with customers while also not violating federal regulations guaranteeing a carrier’s right to review the record. There’s more to it, as always. What he’s definitely certain about, though: In the past decade, he could count on one hand the number of times a carrier’s actually requested review under 371.3. Take a listen:

Also in the podcast: Another way to vet and/or report brokers for unethical behavior. East Coast Transport, Berman says, is a member of the Transportation Intermediaries Association, which he believes takes seriously the Code of Ethics it holds its members to. You won’t find anything directly about off-the-charts outsize margins in that code (you can review the TIA Code of Ethics at this link), but what you will find are commitments to basic professionalism, including both “truth” and “fairness” in business dealings. Fairness is undefined there, and describes a certainly debatable condition, but truth on the other hand can be a fairly objective thing, can’t it. (Though I know, I know, it doesn’t exactly describe an absolute itself.)

You might remember the code the next time an agent tells you “that’s all I’ve got in the load,” I imagine.

Non-TIA members – including owner-operators – can and sometimes do file complaints against members for violations of the code. Complaints are reviewed by the association’s ethics committee with potential to hold a member to account. That has in fact happened before, Berman says. You can find a copy of the complaint form at this link.

The Business Manual for Owner-Operators
Overdrive editors and ATBS present the industry’s best manual for prospective and committed owner-operators. You’ll find exceptional depth on many issues in the 2021 edition of Partners in Business.
Partners in Business Issue Cover