Here at OOIDA's headquarters in Grain Valley, MO, we receive plenty of correspondence in the form of letters and e-mail. Many of you are looking for answers to questions about a variety of topics pertaining to your operations or issues concerning the trucking industry. In this column, we'll be publishing answers to some of the questions we've received over the past few weeks. I hope that sharing this information will be helpful to all of our readers.
Robert F. from Michigan writes:
"I am an owner-operator and I use brokers for some of the freight I haul. Very few of the brokers pay in a timely manner. For the most part, they say they'll pay within 30 days, but it usually ends up more like 40 to 45 days. When I bill them I state right on the invoice, "Payment due within 14 days...if over 30 days, interest will be charged." They totally disregard this. What can I do to get brokers to comply with these terms?"
Robert, I checked with our Business Services Department for the answer to this question. I found out that the payment terms should be agreed upon and included in the load confirmation (contract) between the carrier and the broker. The norm is usually 30 days, but it can be whatever is agreed upon in the contract. Even though you stated your terms on the invoice, if those terms are not included in the contract that both parties have signed, you'll have trouble getting the broker to comply. Once you get the broker's signature on a contract that includes your payment requirements and any late payment penalties, you have legal recourse if the terms of the contract are violated. The law requires that brokers maintain surety bonds or trust fund agreements for your protection in the event a payment dispute arises. Most brokers do not want to deal with any claims against their surety bonds, and therefore will make payment themselves rather than let it go that far.
Michael G. from the state of Washington wants to know:
"What's this I hear about a new law that allows my truck to be impounded if my hired driver gets a ticket for operating with a suspended license? I didn't know he was suspended, so why should I get punished?"
It's true, Michael. The state of Washington recently enacted legislation that cracks down on individuals who continue to drive after their licenses are suspended or revoked (DWLS). Under the new law, a first offense means the vehicle will be impounded for up to 30 days. With a prior conviction (within five years), the impound period can go as high as 60 days. With two prior convictions in a five-year period, the vehicle could be impounded for 90 days.
This law doesn't single out truckers. It applies to all drivers operating on the state's highways, regardless of the type of vehicle involved. Even if the driver does not own the vehicle (as in your situation), the vehicle is still subject to impoundment. In addition, the owner of the vehicle must pay all costs associated with towing and impoundment. This is another good reason to make sure hired drivers have current and valid CDLs before putting them in your truck.
Tom S. from Ohio sent us a question about compensation for detention time and services performed by the owner-operator:
"I think a lot of problems would be solved if we could charge the brokers, shippers and lease companies for our services. For example, if we could bill these people for tarping, fuel surcharges, map miles instead of book miles, detention, etc., it sure would help the owner-operator. If an attorney sends me an itemized bill for phone calls he made to me, I legally owe him the money, so why can't I legally bill for my services?"
Tom, the fact is that individuals can legally bill anyone for services performed, and some states even have laws against theft of services. All of us have the same legal rights as attorneys, doctors, accountants and others when it comes to issuing invoices to those parties for whom we have performed a service(s). If you are unable to collect, you have the option of filing a civil action against the obliged party.
It's important to understand, however, that if you're a leased owner-operator, the time to deal with these items is prior to signing a contract with the motor carrier. Federal Leasing Regulations mandate that "the lease shall clearly specify the responsibility of each party with respect to empty mileage, detention and accessorial services." The lease must also specify who is responsible for loading and unloading and the compensation, if any, to be paid for this service. It follows that if you have signed a lease that stipulates compensation to be paid to you for any of these items or others, there is no need for you to bill for them. It is a violation of the contract if you cannot collect from the motor carrier, and you have legal recourse. On the other hand, if your lease does not provide for compensation for these services, you have no right to bill the motor carrier for them. So even though it may be difficult to accomplish, it is best to negotiate for these items before you sign the contract.
If you have questions that you'd like answered, please e-mail me at firstname.lastname@example.org. Although we won't be able to publish all questions in Land Line, you will receive a response.