WASHINGTON — Rampant fraud in trucking has change into an $800 million problem and the Federal Motor Carrier Safety Administration shouldn’t be addressing the issue, in keeping with the lobby representing 3PLs and brokerage firms.
“There’s a surge of malicious actors engaging in criminal activity, registering with FMCSA as carriers and perpetrating fraud, theft and holding freight hostage in situations with none 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 clearly an economic problem, hurting consumers and businesses alike, it also raises safety and security concerns. Unfortunately, FMCSA is failing to implement the law or investigate the tens of hundreds of fraud complaints lodged with it.”
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Asked through the hearing the varieties of fraud he sees being committed, Tucker, who can also be CEO of Tucker Company Worldwide, a Latest Jersey-based freight brokerage, said the issue is criminals masquerading as brokers in addition to trucking corporations.
“It shouldn’t be seen as either carrier fraud or broker fraud. These are only criminals,” Tucker said.
He pointed to similar cases of fraud involving dispatch services which might be often based in a foreign country but will not be required by FMCSA to acquire a license or registration, as is the case with U.S.-based services.
“FMCSA must stop dabbling in non-safety industrial considerations like what dollar amount a performance bond ought to be or what industrial terms are included inside a personal contract between two parties. Until there are effective measures to deal with and implement solutions for this issue, the continued dysfunctionality of the provision chain and its antagonistic impact on the broader economy will persist.”
Driver shortage?
Along with freight fraud, Tucker addressed the contention made by sectors throughout the trucking industry in addition to throughout the Biden administration that there’s a driver shortage.
“There is no such thing as a driver shortage nor has there been one,” Tucker testified. “That may be a false narrative which will result in unintended consolidation within the industry and to weakening America’s supply chain. A greater than doubling of American carriers and a rise of 1 million drivers has occurred over the past 10 years. We will need to have a more nuanced conversation about this.”
U.S. Rep. Mike Bost, R-Sick., a former trucking company owner, challenged Tucker.
“In the event you’re on the market coping with it day-after-day, there’s” a driver shortage, Bost said, adding that the increasing legalization of marijuana amongst individual states is exacerbating the issue.
“You’ll have plenty of individuals who could also be good drivers, but they like to smoke dope on the weekend and so 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 concerning the recent attacks on cargo vessels within the Red Sea by Houthi rebels and the ripple effect on the worldwide supply chain.
“The initial impact is the delay of vessels arriving each in Asia and coming back to the US,” testified Stephen Edwards, CEO of the Virginia Port Authority.
“So ocean carriers are rescheduling all of those ships and detouring around Africa” as a substitute of going through the Suez Canal, he said, which can settle right into a pattern of ships certain for the U.S. East Coast taking an additional seven days in transit.
“You possibly can take the view … that the additional seven days could possibly be offset by the lack of the Suez Canal fees. But that shouldn’t be true for [vessels moving from] Asia to the Mediterranean or Asia to North Europe.”
Tucker added that one other 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’s concern that perhaps those fees will not be applicable to the situation, and shippers would really like to see more oversight on it,” Tucker said.
:
- FMCSA tightens regulations to forestall fraud by brokers
- ATA walks back driver shortage numbers
- Red Sea conflict worsens, forcing more ship detours around Africa
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