WASHINGTON — Rampant fraud in trucking has become an $800 million problem and the Federal Motor Carrier Safety Administration is not addressing the problem, according to the lobby representing 3PLs and brokerage firms.
“There’s a surge of malicious actors engaging in illegal activity, registering with FMCSA as carriers and perpetrating fraud, theft and holding freight hostage in situations without any legal consequences,” said Jeffrey Tucker, testifying on behalf of the Transportation Intermediaries Association at a hearing before the U.S. House Transportation and Infrastructure Committee on Wednesday.
“While this is obviously an economic problem, hurting consumers and businesses alike, it also raises safety and security concerns. Unfortunately, FMCSA is failing to enforce the law or investigate the tens of thousands of fraud complaints lodged with it.”
Asked during the hearing the types of fraud he sees being committed, Tucker, who is also CEO of Tucker Company Worldwide, a New Jersey-based freight brokerage, said the problem is criminals masquerading as brokers as well as trucking companies.
“It shouldn’t be seen as either carrier fraud or broker fraud. These are just criminals,” Tucker said.
He pointed to similar cases of fraud involving dispatch services that are often based in another country but are not required by FMCSA to obtain a license or registration, as is the case with U.S.-based services.
“FMCSA must stop dabbling in non-safety commercial considerations like what dollar amount a performance bond should be or what commercial terms are included inside a private contract between two parties. Until there are effective measures to address and enforce solutions for this issue, the continued dysfunctionality of the supply chain and its adverse impact on the broader economy will persist.”
Driver shortage?
In addition to freight fraud, Tucker addressed the contention made by sectors within the trucking industry as well as within the Biden administration that there is a driver shortage.
“There is no driver shortage nor has there been one,” Tucker testified. “That is a false narrative that may lead to unintended consolidation in the industry and to weakening America’s supply chain. A more than doubling of American carriers and an increase of 1 million drivers has occurred over the last 10 years. We must have a more nuanced conversation about this.”
U.S. Rep. Mike Bost, R-Ill., a former trucking company owner, challenged Tucker.
“If you’re out there dealing with it every day, there is” a driver shortage, Bost said, adding that the increasing legalization of marijuana among individual states is exacerbating the problem.
“You may have a lot of people who may be good drivers, but they prefer to smoke dope on the weekend and they can’t get clean by Monday. It’s not like having a beer on Sunday during a football game.”
Red Sea supply chain costs
Lawmakers were also concerned about the recent attacks on cargo vessels in the Red Sea by Houthi rebels and the ripple effect on the global supply chain.
“The initial impact is the delay of vessels arriving both in Asia and coming back to the United States,” testified Stephen Edwards, CEO of the Virginia Port Authority.
“So ocean carriers are rescheduling all of those ships and detouring around Africa” instead of going through the Suez Canal, he said, which will settle into a pattern of ships bound for the U.S. East Coast taking an extra seven days in transit.
“You can take the view … that the extra seven days could be offset by the loss of the Suez Canal fees. But that is not true for [vessels moving from] Asia to the Mediterranean or Asia to North Europe.”
Tucker added that another concern is special fees related to the disruption and delays that the U.S. Federal Maritime Commission is allowing ocean carriers to charge their customers.
“There is concern that maybe those fees are not applicable to the situation, and shippers would like to see more oversight on it,” Tucker said.
Hans Witt Trucking
I find this ironic , seein how the TIA helped facilitate this system of extortions, the criminals are just doing what the TIA advocates under the table , by that I mean double brokering, the TIA sections privately and FMCA allows by president, and poorly word regulations, that un constitutional. where they have deem it is legal for for the top100 to use double- broker ( co -brokering) to create muti- level marketing in reverse, or Ponzi scam in reverse to control fright , stopping all competition , keep rate up while driving rate down for 60% or so real carrier who actually haul the loads. While screaming driver shortage to justify high rates to the consumer , and sucker continues supply of naïve people into the industry they can exploits.
Michael Dennis
I support legalizing Marijuana. What I don’t I don’t support is people dumb enough to smoke weed when they know it will ruin their careers. No matter what stress you’re going through, the fact that you willingly threw it away for a temporary emotional band aid shows terrible judgement. No matter how many years or how many miles of safe driving you had its all meaningless once you decided you wouldn’t get caught that last time. If you can’t find work it’s probably because you think your driving record should only count up to the day before you smoked weed. It’s like buying a $100,000 car , wrecking it, then thinking that car is still worth $100,000. You can still sell it, but the cash value has dropped off significantly and you need to be realistic about what it’s truly worth. Take a job that’s beneath you or change industries because damaged goods don’t look much different from brand new drivers.
Larry W.Dennis
There is no shortage of drivers just a shortage of safe professional drivers.
Also the Feds are not enforcing 391.11 section b number 2.
Fibert Nutbar
Nothing the dot has done has made me a better safer dirver. The dot just made my workday more difficult. When will we learn the government can’t fix anything especially the government.
Jim H
If any other industry in this country operated on the same principles as the trucking industry, thousands of people would likely go to prison for racketeering and fraud.
Robert Keith
I also was an essential worker throughout the years of driving bringing essential items to customers and I too smoked on the weekend and was randomly drug tested eight times in one year and I failed one and so that made me SAP student, I went from essential worker to broke trying to find a job for the last 3 years and can’t so if I bought my own truck and have my own leased out truck maybe things would be different, but I can’t afford it now I feel like I’ve been 8 balled after 29 years of driving so you could take your dispatching federal government dot is sticking up your ass, because it doesn’t matter what kind of weather you drive in how many crazy people you have to avoid how many safe miles you go stuff still happens at home when you’re gone and you can’t control it and people out there driving on the highways that don’t stay home when the weather’s bad causes more problems if you ever drove where the truck driver you’d understand but until you do you don’t understand just give him my job back!
A Real Live Adult
Every time someone screams “Brokers are the devil” or something to that effect all I can read is “I don’t understand how the world works, I’m angry, and I want someone to blame.”
Dominic Flores
What you corrupt politicians don’t understand is that the laws you make have been more detrimental than anything else in the industry. As a driver of 45 years and over 6 million safe miles I smoked after the passing of my wife in 2023 to try and relieve my anxiety and heartache. Soon after I was told to go get a drug test. As a result I’ve lost my job and now because of the prejudice and fear mongering by the government and trucking companies I can’t find a job because I’m now a SAP graduate but still can’t find work. Your laws do nothing to promote safety they only put roadblocks in front of people who decide to live life without the prejudice of our own government. Government is what has ruined the industry not drivers . I know I have people who disagree but it’s their right as it is ours to not have to be discriminated against simply for something we do on our own time. But that is the government MO cause trouble for the people every where they can!