The 2020 rate crisis was driven primarily by shipper efforts to minimize transportation spending in a disrupted market, and the more useful remedy was independent pricing intelligence rather than mandated rates or broker-margin regulation.
Why Can't Everyone Get Along?
The pandemic disrupted freight networks, closed plants, parked trucks, and displaced drivers. Carriers and brokers were trying to survive the shutdown and prepare for the restart, while some shippers used the disruption to reduce costs.
A year after KSMTA described shippers shifting contracted freight to brokers in a falling market, shippers were again moving contracted freight into the spot market and rebidding freight before contracts ended.
President Trump said truckers were being “price gouged.” Legally and economically, price gouging describes a seller charging an excessive price during an emergency. Carriers were the sellers, and they were not receiving excessive prices. The article describes the problem instead as rate impairment driven by the shipper's prime directive to minimize cost.
Small-fleet truckers protested low rates in Washington during the May Day demonstration. TIA President and CEO Robert Voltmann responded that member brokers averaged a 16% margin, with 84% going to truckers. The article acknowledges that some brokers may exploit desperate carriers, but argues that most brokers operate honorably and that the underlying leverage belongs to shippers.
Shipper Actions During the Crisis
Some shippers used the emergency to:
- Break contracts and rebid committed volume, sometimes through three rounds of progressively lower targets
- Change fuel-surcharge tables, including one example that reduced effective surcharge by $0.10 per mile
- Demand payment terms as long as 120 days
Carriers buy fuel immediately and pay drivers weekly. Brokers typically pay within 30 days. Payment beyond 30 days does not work for a transportation provider.
Shippers possess detailed data about rates, service, volume, loading time, claims, and transportation channels. They use that information to reduce spend across market cycles.
Would More Regulation Help?
Two proposed regulatory solutions did not address the root problem.
A Minimum Rate per Mile
A universal minimum rate would ignore differences in carrier cost structures and freight networks. Many carriers do not know their actual operating cost, loads have different values in different networks, and the industry lacks a standard mileage engine.
KSMTA clients sometimes haul a load below variable cost because it fills a network gap and improves total network yield.
Mandatory Broker Revenue Disclosure
Requiring brokers to reveal shipper revenue would show the margin but not establish what margin is acceptable or what action an unhappy carrier should take.
Regulating broker margin would conflict with free-market principles, create administrative burden, and produce legal conflict. If broker prices must be disclosed, the same logic raises whether shippers should disclose what they pay other carriers.
A Freight Rate Transparency Consortium
The article proposes an independent Freight Rate Transparency Consortium rather than direct price regulation.
Member shippers, brokers, and carriers would contribute transaction-level data such as linehaul, fuel surcharge, accessorial revenue, origin and destination ZIP codes, and trailer type. The consortium would aggregate and anonymize the information and return lane-level benchmarks by trailer type and participant category.
To remain credible, the organization would need to stand apart from trade groups, TMS providers, and load boards. Its purpose would be to give all parties a holistic, fact-based view of the freight market for strategic and tactical decisions.