1 00:00:07,400 --> 00:00:10,039 Speaker 1: Hi everyone, this is Lee Clasgow when We're Talking Transports. 2 00:00:10,119 --> 00:00:13,200 Speaker 1: Welcome to Bloomberg Intelligence Talking Transport podcast. I'm your host, 3 00:00:13,240 --> 00:00:17,279 Speaker 1: Lee Clasgow, senior freight, transportation and logistics analysts at Bloomberg Intelligence, 4 00:00:17,520 --> 00:00:20,320 Speaker 1: Bloomberg's end house research arm of almost five hundred analysts 5 00:00:20,320 --> 00:00:23,599 Speaker 1: and strategists around the world. A quick public service announcement 6 00:00:23,680 --> 00:00:26,560 Speaker 1: before we dive in. Your support is instrumental to keep 7 00:00:26,560 --> 00:00:29,760 Speaker 1: bringing great guests in conversations to you, our listeners, and 8 00:00:29,800 --> 00:00:32,519 Speaker 1: we need your support, so please, if you enjoy the podcast, 9 00:00:32,680 --> 00:00:34,879 Speaker 1: share it, like it and leave a comment. Also, if 10 00:00:34,880 --> 00:00:37,400 Speaker 1: you've got ideas, feedback, or just want to talk transports, 11 00:00:37,440 --> 00:00:39,519 Speaker 1: I'm always happy to connect. You can find me on 12 00:00:39,520 --> 00:00:43,199 Speaker 1: the Bloomberg terminal, on LinkedIn or on x at Logistics. Lee, 13 00:00:43,600 --> 00:00:47,120 Speaker 1: I'm very excited to have with us today. Matthew Luffler 14 00:00:47,479 --> 00:00:51,400 Speaker 1: the managing member of Armchair Attorney, a general practice law 15 00:00:51,400 --> 00:00:55,480 Speaker 1: firm in Illinois. Matt provides legal commentary on various supply 16 00:00:55,560 --> 00:01:00,400 Speaker 1: chain issues and is the host of the Armchair Attorney podcast. Addition, 17 00:01:00,760 --> 00:01:03,880 Speaker 1: he served as a senior leader with some of the 18 00:01:04,000 --> 00:01:08,080 Speaker 1: nation's largest maintenance repair in fleet management firms. He entered 19 00:01:08,120 --> 00:01:11,280 Speaker 1: the industry as an attorney defending trucking companies in civil 20 00:01:11,319 --> 00:01:14,480 Speaker 1: litigation in twenty ten, but cut his teeth helping build 21 00:01:14,560 --> 00:01:20,039 Speaker 1: and later selling his family's maintenance firm, Outsourced Fleet Services, Incorporated. 22 00:01:20,440 --> 00:01:24,280 Speaker 1: He earned ajd from Michigan State University College of Law 23 00:01:24,560 --> 00:01:28,120 Speaker 1: magnum cum laude and his BA from the University of Illinois. 24 00:01:28,280 --> 00:01:30,720 Speaker 1: Welcome to the podcast, Matt, Thanks for coming here. 25 00:01:30,959 --> 00:01:33,560 Speaker 2: Thank you for having me Lee Go Green. From my 26 00:01:33,640 --> 00:01:36,240 Speaker 2: Michigan State fans that are out there somewhere, we got 27 00:01:36,240 --> 00:01:38,480 Speaker 2: to love when the spartis do well. I think the 28 00:01:38,520 --> 00:01:41,520 Speaker 2: Big Ten now has forty five, maybe fifty five teams. 29 00:01:41,600 --> 00:01:43,160 Speaker 2: It's a big conference now. 30 00:01:43,440 --> 00:01:45,520 Speaker 1: It is a big conference and doing well. And why 31 00:01:45,560 --> 00:01:48,680 Speaker 1: I'm assuming you're talking about basketball. 32 00:01:48,520 --> 00:01:52,320 Speaker 2: Or football all the things I got it back to, Yeah, exact, absolutely, 33 00:01:52,360 --> 00:01:54,200 Speaker 2: maybe track and field that was my favorite thing. 34 00:01:54,360 --> 00:01:58,000 Speaker 1: Yeah, all right. So I've gotten to known you over 35 00:01:58,040 --> 00:02:02,200 Speaker 1: the years both kind of on the speaking circuit, and 36 00:02:02,480 --> 00:02:04,480 Speaker 1: I really enjoyed your insights, so wanted to have you 37 00:02:04,520 --> 00:02:07,480 Speaker 1: on here on the podcast. Could you just give a 38 00:02:07,520 --> 00:02:11,480 Speaker 1: little background about your practice. The armchair attorney, which is, 39 00:02:11,560 --> 00:02:14,560 Speaker 1: you know, not your normal law firm name. It's usually 40 00:02:14,680 --> 00:02:18,079 Speaker 1: like you know Schwartz, Simpsons and Williams and you know 41 00:02:18,240 --> 00:02:20,520 Speaker 1: something like that. So just tell us about your firm. 42 00:02:21,040 --> 00:02:23,440 Speaker 2: Yeah, so the firm started, I've about five six years 43 00:02:23,480 --> 00:02:26,640 Speaker 2: ago when I really converted from my initial like individual 44 00:02:26,680 --> 00:02:29,720 Speaker 2: the law Offices of Matthew Leffler sole proprietor sort of thing. 45 00:02:30,120 --> 00:02:32,080 Speaker 2: I figured this would be an interesting way to build 46 00:02:32,240 --> 00:02:34,840 Speaker 2: a different type of brand. But what my law firm 47 00:02:34,880 --> 00:02:38,359 Speaker 2: really focuses on is general litigation or general general practice, 48 00:02:38,480 --> 00:02:42,200 Speaker 2: working with folks with non competition agreements, non solicit agreements, 49 00:02:42,240 --> 00:02:45,920 Speaker 2: mostly post employment restrictive covenant. So I help people throughout 50 00:02:45,960 --> 00:02:48,360 Speaker 2: the industry, across the supply chain, and also just mostly 51 00:02:48,400 --> 00:02:52,160 Speaker 2: Illinois deal with these contracts. A lot of what I 52 00:02:52,280 --> 00:02:55,440 Speaker 2: encounter are folks that have great, a great job offer, 53 00:02:55,520 --> 00:02:57,640 Speaker 2: but now they have a contract they have to review 54 00:02:57,639 --> 00:02:59,280 Speaker 2: and they have a very short window to review it. 55 00:02:59,280 --> 00:03:01,600 Speaker 2: So I've built my niche in that space. But I 56 00:03:01,639 --> 00:03:03,680 Speaker 2: do a lot of other things. I have a consulting 57 00:03:03,720 --> 00:03:05,960 Speaker 2: company that does non legal work. But the law firm 58 00:03:06,040 --> 00:03:09,880 Speaker 2: itself has kind of propelled me into continuing education and 59 00:03:09,919 --> 00:03:12,560 Speaker 2: now the teaching at Michigan State University College of Law 60 00:03:12,600 --> 00:03:15,480 Speaker 2: is an adjunct professor where I focus on supply chain. 61 00:03:15,400 --> 00:03:20,760 Speaker 1: Law awesome, And so you know, can you talk about, like, 62 00:03:20,880 --> 00:03:22,799 Speaker 1: you know, when you came out of law school, did 63 00:03:22,800 --> 00:03:25,400 Speaker 1: you always know you were going to kind of focus 64 00:03:25,520 --> 00:03:28,320 Speaker 1: on transports or you know, when I have guests on 65 00:03:28,400 --> 00:03:30,880 Speaker 1: it's usually either either born into it or they fall 66 00:03:30,919 --> 00:03:32,760 Speaker 1: into it. So can you tell us a little bit 67 00:03:32,800 --> 00:03:34,200 Speaker 1: about how you got into transports. 68 00:03:34,280 --> 00:03:37,080 Speaker 2: Yeah. The only thing I knew about transportation when I 69 00:03:37,160 --> 00:03:39,280 Speaker 2: was younger was that meant my father was gone for 70 00:03:39,360 --> 00:03:41,920 Speaker 2: half of the year. So my dad, in his very 71 00:03:41,960 --> 00:03:44,400 Speaker 2: first job out of college in nineteen seventy six, was 72 00:03:44,440 --> 00:03:47,280 Speaker 2: working for Roadway and my father before that his grandpa, 73 00:03:47,320 --> 00:03:49,960 Speaker 2: I mean my grandpa. His father was an owner operator 74 00:03:49,960 --> 00:03:53,400 Speaker 2: who hauled grain in central Illinois. And I didn't realize 75 00:03:53,480 --> 00:03:55,120 Speaker 2: that I was never going to have a chance to 76 00:03:55,240 --> 00:03:57,800 Speaker 2: escape the supply chain. But I went to law school 77 00:03:57,840 --> 00:04:00,200 Speaker 2: with the understanding that I wouldn't have to be the 78 00:04:00,320 --> 00:04:03,440 Speaker 2: road like my father was, because he after working at 79 00:04:03,520 --> 00:04:06,680 Speaker 2: Roadway for about fifteen years during the deregulation period and 80 00:04:06,720 --> 00:04:09,240 Speaker 2: all of this, he started a company where he maintained 81 00:04:09,280 --> 00:04:12,960 Speaker 2: commercial vehicles, at first for Roadway package systems, but that 82 00:04:13,000 --> 00:04:16,359 Speaker 2: company later became FedEx ground and so this whole trend 83 00:04:16,440 --> 00:04:20,919 Speaker 2: of outsourcing and focusing on core competency was all driven 84 00:04:20,960 --> 00:04:24,040 Speaker 2: by this different legal frameworks, whether you're talking about independent 85 00:04:24,080 --> 00:04:26,640 Speaker 2: contractors or all sorts of other you know, legal things 86 00:04:26,720 --> 00:04:29,400 Speaker 2: we'll probably get into, but I kind of stumbled in 87 00:04:29,520 --> 00:04:32,000 Speaker 2: as the first job I could find was defending trucking 88 00:04:32,040 --> 00:04:36,080 Speaker 2: companies in catastrophic accidents, and so often in those moments 89 00:04:36,120 --> 00:04:38,880 Speaker 2: you're looking at like the worst case scenario. The worst 90 00:04:38,880 --> 00:04:41,320 Speaker 2: case for any fleet is the day you have a 91 00:04:41,360 --> 00:04:44,239 Speaker 2: catastrophic accident. And I wanted to get as I built 92 00:04:44,279 --> 00:04:46,839 Speaker 2: up my in house practice working for my father, getting 93 00:04:46,839 --> 00:04:49,640 Speaker 2: in the front end of this with better maintenance practices, 94 00:04:49,640 --> 00:04:52,680 Speaker 2: better regulations, better enforcement. And that's kind of brought me 95 00:04:52,800 --> 00:04:54,680 Speaker 2: into the space that I am now, which is really 96 00:04:54,880 --> 00:04:58,520 Speaker 2: talking about regulation or talking about litigation happening in the industry, 97 00:04:58,680 --> 00:04:59,960 Speaker 2: and then just kind of trying to be an advot 98 00:05:00,320 --> 00:05:03,479 Speaker 2: for getting safer roads, which we all want to see. 99 00:05:03,760 --> 00:05:06,440 Speaker 2: But it's a lot more difficult to do than it 100 00:05:06,480 --> 00:05:06,960 Speaker 2: is to say. 101 00:05:07,600 --> 00:05:10,320 Speaker 1: You know, you talked about defending trucking companies. And obviously 102 00:05:10,640 --> 00:05:13,960 Speaker 1: some big things that are going on are these nuclear verdicts, 103 00:05:14,160 --> 00:05:19,360 Speaker 1: which are very large, I guess amounts that these trucking 104 00:05:19,360 --> 00:05:22,120 Speaker 1: companies you tend to have to pay or their insurance 105 00:05:22,120 --> 00:05:24,520 Speaker 1: companies have to pay. Can you just talk about kind 106 00:05:24,520 --> 00:05:28,040 Speaker 1: of the evolution of how we got to these nuclear 107 00:05:28,200 --> 00:05:31,400 Speaker 1: verdicts and what is the industry doing to kind of 108 00:05:31,520 --> 00:05:35,720 Speaker 1: tamp down tamp down those those amounts. 109 00:05:36,000 --> 00:05:39,080 Speaker 2: Yeah, absolutely so. A nuclear vert is not a legal word. 110 00:05:39,120 --> 00:05:41,479 Speaker 2: It's a word kind of invented through the industry. But 111 00:05:41,520 --> 00:05:44,440 Speaker 2: what it generally means is a verdict that is over 112 00:05:44,600 --> 00:05:48,200 Speaker 2: ten million dollars and ten million dollar verk that is 113 00:05:48,240 --> 00:05:51,960 Speaker 2: the nuclear verdict. We've seen increasingly things that are being 114 00:05:52,040 --> 00:05:55,479 Speaker 2: called kind of thermo nuclear verdicts. These are verdicts that 115 00:05:55,520 --> 00:05:58,719 Speaker 2: are over one hundred million dollars. And what you have 116 00:05:58,839 --> 00:06:01,680 Speaker 2: found over the last say, twenty twenty five years, is 117 00:06:01,720 --> 00:06:05,880 Speaker 2: the increase of these numbers every single year, like clockwork. 118 00:06:05,920 --> 00:06:08,240 Speaker 2: There was a slowdown during COVID for a lot of reasons, 119 00:06:08,279 --> 00:06:10,880 Speaker 2: but it picked right back up. And it's not just 120 00:06:10,920 --> 00:06:13,800 Speaker 2: in transportation. It is across the board and anything from 121 00:06:13,920 --> 00:06:17,960 Speaker 2: product liability. It's been fall accidents, airplane crashes, and then 122 00:06:18,000 --> 00:06:21,360 Speaker 2: of course the trucking industry we see here it's fascinating 123 00:06:21,440 --> 00:06:26,039 Speaker 2: because the minimum insurance required to move freight in the 124 00:06:26,120 --> 00:06:28,880 Speaker 2: United States as just a general freight, not anything has 125 00:06:28,960 --> 00:06:32,840 Speaker 2: matter specialized is seven hundred and fifty thousand dollars, and 126 00:06:32,839 --> 00:06:35,600 Speaker 2: that's been the number since the nineteen eighties. It's never 127 00:06:35,600 --> 00:06:38,560 Speaker 2: been ingusted for inflation, and it remains this big challenge 128 00:06:38,560 --> 00:06:42,360 Speaker 2: for trucking companies. And what you find out is that 129 00:06:42,720 --> 00:06:45,560 Speaker 2: unless you're a really big trucking company that has the 130 00:06:45,600 --> 00:06:48,159 Speaker 2: ability to weather a ten million or a thirty million 131 00:06:48,279 --> 00:06:52,440 Speaker 2: or one hundred million dollar verdict, the smaller ones are underinsured. 132 00:06:52,880 --> 00:06:55,880 Speaker 2: And so you see this increasing movement towards trying to 133 00:06:55,920 --> 00:06:59,359 Speaker 2: find brokers liable. So for many years, the brokerage industry 134 00:06:59,400 --> 00:07:03,599 Speaker 2: was kind of not particularly invested in what happens with 135 00:07:03,680 --> 00:07:06,520 Speaker 2: the verdicts we see in the trucking industry. But now 136 00:07:06,520 --> 00:07:08,919 Speaker 2: they're being dragged into that, and there's a Supreme Court 137 00:07:08,920 --> 00:07:11,360 Speaker 2: case currently out there. But I think what we look 138 00:07:11,400 --> 00:07:12,960 Speaker 2: at to try to solve this, and there's a lot 139 00:07:13,000 --> 00:07:14,520 Speaker 2: of things we can look at, but one of the 140 00:07:14,520 --> 00:07:18,560 Speaker 2: main ones the American Trucking Associations talks about is tort reform, 141 00:07:18,600 --> 00:07:22,600 Speaker 2: where you basically cap the punitive damages So the example 142 00:07:22,760 --> 00:07:26,080 Speaker 2: I've used in talking with folks, it's now been settled, 143 00:07:26,080 --> 00:07:28,240 Speaker 2: but it's the Wabash case. Wabash was hit for a 144 00:07:28,360 --> 00:07:31,640 Speaker 2: four hundred and sixty two million dollars verdict when someone 145 00:07:31,720 --> 00:07:35,320 Speaker 2: smashed in the back of their trailer. And the way 146 00:07:35,360 --> 00:07:39,040 Speaker 2: that Missouri's laws are set up is that you can't 147 00:07:39,080 --> 00:07:42,600 Speaker 2: get more than five times punitive damages to what they 148 00:07:42,640 --> 00:07:44,800 Speaker 2: call compensatory so like what you get paid for your 149 00:07:44,840 --> 00:07:47,320 Speaker 2: medical bills. So that there was twelve million dollars in 150 00:07:47,360 --> 00:07:52,720 Speaker 2: compensatory damages but four hundred and fifty million in punitive damages. Well, 151 00:07:52,720 --> 00:07:56,640 Speaker 2: the courts modify that number. And so what we see 152 00:07:56,680 --> 00:07:59,560 Speaker 2: happening across the states and across the country really is 153 00:07:59,640 --> 00:08:03,960 Speaker 2: people trying to push for caps on punitive damages or 154 00:08:04,040 --> 00:08:08,640 Speaker 2: limitations on overall liability. No one wants to walk away 155 00:08:08,640 --> 00:08:11,280 Speaker 2: from an accent say I'm not paying anything. If you're responsible, 156 00:08:11,280 --> 00:08:14,520 Speaker 2: you're going to pay something. But it's how much money 157 00:08:14,560 --> 00:08:16,920 Speaker 2: can you get? And that's been this trend of these 158 00:08:17,080 --> 00:08:20,960 Speaker 2: crazy verdicts that one company can survive, another company simply can't. 159 00:08:21,400 --> 00:08:25,240 Speaker 1: Yeah, and you mentioned there's a case in the Supreme 160 00:08:25,280 --> 00:08:27,320 Speaker 1: Court with brokers. Can you talk a little bit about 161 00:08:27,320 --> 00:08:27,760 Speaker 1: that case. 162 00:08:28,120 --> 00:08:32,520 Speaker 2: This is one of the most interesting legal cases in 163 00:08:32,600 --> 00:08:37,360 Speaker 2: supply chain right now. The fundamental idea is that a 164 00:08:37,440 --> 00:08:40,600 Speaker 2: broker is in charge of price, route and service, and 165 00:08:40,640 --> 00:08:44,040 Speaker 2: so their job is to identify a motor carrier to 166 00:08:44,240 --> 00:08:47,520 Speaker 2: move the freight for their customer, the shipper, and the 167 00:08:47,520 --> 00:08:49,920 Speaker 2: motor carrier goes off and does what they do. If 168 00:08:49,960 --> 00:08:55,080 Speaker 2: the motor carrier falls asleep or crashes, generally speaking, the 169 00:08:55,120 --> 00:08:59,000 Speaker 2: brokers not on the hook. They're not guaranteurs of the liability. 170 00:08:59,400 --> 00:09:02,000 Speaker 2: And this is all done by a federal statue called 171 00:09:02,120 --> 00:09:03,640 Speaker 2: F four A is the break that is, like the 172 00:09:03,640 --> 00:09:06,120 Speaker 2: short version. It's a federal aviation statute that kind of 173 00:09:06,280 --> 00:09:10,560 Speaker 2: brought in brokers as well. And what that act ended 174 00:09:10,640 --> 00:09:14,520 Speaker 2: up doing was creating a split among the circuits. So 175 00:09:15,280 --> 00:09:18,760 Speaker 2: back into civil like civics classes. One on one, you 176 00:09:18,880 --> 00:09:22,280 Speaker 2: have these district courts, the lowest courts. You have appellate 177 00:09:22,320 --> 00:09:24,520 Speaker 2: courts which are right above the districts, and they control 178 00:09:24,679 --> 00:09:28,360 Speaker 2: big swaths of the country in their own little circuits. 179 00:09:28,520 --> 00:09:31,400 Speaker 2: And then you have the Supreme Court. So different circuits 180 00:09:31,480 --> 00:09:35,280 Speaker 2: like the Seventh Circuit which is Illinois, Indiana, Wisconsin, and 181 00:09:35,360 --> 00:09:38,600 Speaker 2: the Ninth Circuit, which is you know, California, Oregon, Washington, 182 00:09:38,640 --> 00:09:42,320 Speaker 2: the Western States. They looked at the same law and 183 00:09:42,360 --> 00:09:47,080 Speaker 2: the same accidents, truck crashes, someone's sues. And back to 184 00:09:47,120 --> 00:09:51,040 Speaker 2: our initial conversation on insurance. Insurance company will pay out 185 00:09:51,040 --> 00:09:53,400 Speaker 2: the seven hundred and fifty thousand dollars. The motor carr 186 00:09:53,480 --> 00:09:55,560 Speaker 2: is going to go bankrupt. So where does the rest 187 00:09:55,559 --> 00:09:57,760 Speaker 2: of this money come from? And we look at the 188 00:09:57,800 --> 00:10:02,480 Speaker 2: broker and so what's happened is four different circuits, maybe five, 189 00:10:02,559 --> 00:10:05,960 Speaker 2: have all weighed in on whether a broker can be 190 00:10:06,040 --> 00:10:10,440 Speaker 2: responsible when the motor carrier is negligent. So this case was, 191 00:10:10,679 --> 00:10:15,439 Speaker 2: this Montgomery case was in the Seventh Circuit Court of Appeals. C. H. 192 00:10:15,559 --> 00:10:18,320 Speaker 2: Robinson wins. They win on the Seventh Circuit, they're not 193 00:10:18,360 --> 00:10:21,320 Speaker 2: going to be liable, and yet they help appeal this 194 00:10:21,480 --> 00:10:24,360 Speaker 2: case to the Supreme Court. And now the Supreme Court 195 00:10:24,440 --> 00:10:27,360 Speaker 2: of the United States has granted Sir chirari. It's a 196 00:10:27,600 --> 00:10:31,280 Speaker 2: legal phrase meaning they've accepted this case because they're they 197 00:10:31,280 --> 00:10:33,640 Speaker 2: don't have to never force to take a case. So 198 00:10:33,679 --> 00:10:37,080 Speaker 2: they take this case up. And we are watching right now. 199 00:10:37,760 --> 00:10:40,760 Speaker 2: The Meekus briefs come in and Amkus brief is just 200 00:10:40,800 --> 00:10:43,080 Speaker 2: a friend of the court, so it's someone who's not 201 00:10:43,240 --> 00:10:47,120 Speaker 2: in the litigation but has really strong opinions. And this 202 00:10:47,200 --> 00:10:49,640 Speaker 2: is one of the most fascinating cases as you watch 203 00:10:49,679 --> 00:10:52,599 Speaker 2: it unfold and will probably have oral arguments middle of 204 00:10:52,640 --> 00:10:55,280 Speaker 2: next year. But it is really interesting and it changes 205 00:10:55,320 --> 00:10:57,640 Speaker 2: a lot of the dynamic of what brokers do and 206 00:10:57,679 --> 00:10:58,560 Speaker 2: what motor carriers do. 207 00:10:59,440 --> 00:11:02,960 Speaker 1: Right, the Supreme Court could rule that is it going 208 00:11:03,000 --> 00:11:05,800 Speaker 1: to be one or the other, either brokers are liable 209 00:11:06,120 --> 00:11:08,040 Speaker 1: or brokers are not liable, or is there going to 210 00:11:08,040 --> 00:11:11,120 Speaker 1: be a gray area where they can be liable if 211 00:11:11,160 --> 00:11:13,520 Speaker 1: they don't vet the carrier properly. 212 00:11:14,400 --> 00:11:16,120 Speaker 2: That's a great question. I'm going to give you the 213 00:11:16,120 --> 00:11:19,640 Speaker 2: worst and the most typical lawyer answer. It depends. I 214 00:11:19,640 --> 00:11:23,040 Speaker 2: would think that ultimately the Supreme Court will go the 215 00:11:23,240 --> 00:11:26,840 Speaker 2: route of the Seventh Circuit and say brokers generally cannot 216 00:11:26,880 --> 00:11:29,640 Speaker 2: be held liable. And that's what the entire industry is 217 00:11:29,720 --> 00:11:33,880 Speaker 2: predicated upon. The our entire transportation industry and twenty percent 218 00:11:33,920 --> 00:11:36,920 Speaker 2: of freight moving through freight brokers, It is predicated on 219 00:11:37,000 --> 00:11:39,200 Speaker 2: them not being liable. They don't have they don't even 220 00:11:39,360 --> 00:11:42,200 Speaker 2: own insurance like this. Typically unless you're at H. Robinson 221 00:11:42,559 --> 00:11:45,280 Speaker 2: or Global Trends or someone massive. But I think there's 222 00:11:46,000 --> 00:11:49,880 Speaker 2: a pathway where everyone can kind of win, where claims 223 00:11:49,960 --> 00:11:53,480 Speaker 2: of gross negligence, like really really bad behavior on the 224 00:11:53,480 --> 00:11:57,400 Speaker 2: broker's part, could still bring them into litigation. But this 225 00:11:57,480 --> 00:12:00,480 Speaker 2: is one of the most fascinating parts. Is just couple 226 00:12:00,520 --> 00:12:04,679 Speaker 2: of weeks ago, the State of Ohio and about twenty 227 00:12:04,720 --> 00:12:08,240 Speaker 2: eight other state attorneys general as well as the District 228 00:12:08,280 --> 00:12:11,920 Speaker 2: of Columbia filed in amikus brief. These are republican states, 229 00:12:11,920 --> 00:12:15,920 Speaker 2: these are democratic states. Liberals and conservatives. Those states all agree, 230 00:12:16,559 --> 00:12:19,600 Speaker 2: we want the ability to hold the brokers liable. This 231 00:12:19,800 --> 00:12:23,400 Speaker 2: is our power. We're dual sovereigns. You the federal government 232 00:12:23,480 --> 00:12:26,720 Speaker 2: may say, oh, the broker's not responsible. We the states 233 00:12:27,280 --> 00:12:30,480 Speaker 2: really do care. And so now you have this case 234 00:12:30,520 --> 00:12:33,480 Speaker 2: before the Supreme Court, which is both a question of 235 00:12:33,559 --> 00:12:37,200 Speaker 2: brokers being liable and whether the federal appellate courts have 236 00:12:37,280 --> 00:12:41,600 Speaker 2: interpreted it right, but also the states saying we have 237 00:12:41,760 --> 00:12:44,400 Speaker 2: a right in this litigation. We have an opinion. And 238 00:12:44,440 --> 00:12:48,120 Speaker 2: it's not what any of the Transportation Defense counsels want 239 00:12:48,160 --> 00:12:49,760 Speaker 2: to see. None of them want to see this, But 240 00:12:50,120 --> 00:12:52,560 Speaker 2: it's fascinating to see how this stuff plays out when 241 00:12:52,600 --> 00:12:57,480 Speaker 2: you start looking at the size of the problem. 242 00:12:56,480 --> 00:12:59,280 Speaker 1: And do you see the industry upping that seven hundred 243 00:12:59,280 --> 00:13:02,600 Speaker 1: and fifty dollar liability minimum. 244 00:13:03,120 --> 00:13:05,080 Speaker 2: This is one of the I would say, this is 245 00:13:05,160 --> 00:13:07,560 Speaker 2: very controversially, so please forgive me when I say this, 246 00:13:07,559 --> 00:13:08,719 Speaker 2: because everyone disagrees with me. 247 00:13:08,800 --> 00:13:12,520 Speaker 1: Well, this podcast is typically very controversial anyway, So go on. 248 00:13:13,320 --> 00:13:16,679 Speaker 2: I think we have to raise it. Every single time 249 00:13:16,720 --> 00:13:19,640 Speaker 2: we've tried in the last forty years, it has been defeated, 250 00:13:19,679 --> 00:13:23,440 Speaker 2: and typically it is defeated through a combination of the 251 00:13:23,440 --> 00:13:27,640 Speaker 2: American Trucking Associations and the Owner Operas Independent Driver Association 252 00:13:27,800 --> 00:13:31,400 Speaker 2: o IDA. Both of these organizations agree they don't want 253 00:13:31,440 --> 00:13:35,080 Speaker 2: to see rates go up, and every defense attorney I've 254 00:13:35,120 --> 00:13:38,720 Speaker 2: ever spoken to says, my goodness, wouldn't it be wonderful 255 00:13:38,920 --> 00:13:41,560 Speaker 2: if it was tied to inflation because it would actually 256 00:13:41,559 --> 00:13:44,880 Speaker 2: cover the liability the trucking companies face because what typically 257 00:13:44,880 --> 00:13:48,599 Speaker 2: happens is you get a judgment against you above your insurance, 258 00:13:48,920 --> 00:13:51,120 Speaker 2: and that lawyer is going to come for your trucks. 259 00:13:51,200 --> 00:13:52,920 Speaker 2: It's going to come for your building, it's going to 260 00:13:52,960 --> 00:13:54,840 Speaker 2: come for your house and your car and anything they 261 00:13:54,880 --> 00:13:58,280 Speaker 2: can get and you're bankrupt. And so the last time 262 00:13:58,320 --> 00:14:00,760 Speaker 2: we tried it, lee was an Act of Congress called 263 00:14:00,760 --> 00:14:05,400 Speaker 2: the Fair Compensation for Truck Crash Victims Act. It did 264 00:14:05,400 --> 00:14:08,560 Speaker 2: not succeed, and none of these attempts have been successful. 265 00:14:08,559 --> 00:14:12,320 Speaker 2: But if we are talking about removing capacity from the 266 00:14:12,320 --> 00:14:15,000 Speaker 2: market in order to get rates to go up, this 267 00:14:15,200 --> 00:14:18,000 Speaker 2: is one of the ways you could do it. Now, 268 00:14:18,040 --> 00:14:21,280 Speaker 2: the other part I'll segue to is shippers have taken 269 00:14:21,360 --> 00:14:26,600 Speaker 2: some interesting initiative here, and now we're seeing more and 270 00:14:26,720 --> 00:14:30,600 Speaker 2: more enterprise shippers say, motorcres are going to haul my freight, 271 00:14:30,680 --> 00:14:33,440 Speaker 2: either through the broker or through the motorcare directly. I 272 00:14:33,520 --> 00:14:36,120 Speaker 2: need to see a million or two million dollars of 273 00:14:36,160 --> 00:14:38,840 Speaker 2: general liability otherwise I'm not going to allow you to 274 00:14:38,920 --> 00:14:42,000 Speaker 2: move my freight. And so there is a private market 275 00:14:42,120 --> 00:14:46,040 Speaker 2: correction ish, I would say, but it's not necessarily regulated, 276 00:14:46,280 --> 00:14:49,080 Speaker 2: but it is something that I'm very passionate about, and again, 277 00:14:49,480 --> 00:14:52,200 Speaker 2: highly controversial to ensure the risk that you might be 278 00:14:52,240 --> 00:14:53,320 Speaker 2: creating in the industry. 279 00:14:53,760 --> 00:14:56,400 Speaker 1: Yeah, and especially since you know, insurance is harder to 280 00:14:56,440 --> 00:14:58,280 Speaker 1: come by in the market because a lot of folks 281 00:14:58,280 --> 00:15:03,600 Speaker 1: have insurance. Providers of the trucking industry just given these 282 00:15:03,720 --> 00:15:05,680 Speaker 1: nuclear verdicts, it just doesn't pay for them to be 283 00:15:05,680 --> 00:15:08,800 Speaker 1: in anymore. So that means the ones that are there 284 00:15:08,800 --> 00:15:11,680 Speaker 1: are able to charge a lot of money for their product, 285 00:15:11,720 --> 00:15:13,840 Speaker 1: and you've seen that as a as a huge headwind 286 00:15:13,880 --> 00:15:19,440 Speaker 1: for trucking earnings. So do you do you suspect that 287 00:15:19,760 --> 00:15:23,920 Speaker 1: the government will get involved in forcing brokers to have 288 00:15:24,040 --> 00:15:25,640 Speaker 1: some sort of liability insurance. 289 00:15:26,440 --> 00:15:28,840 Speaker 2: That's a really good question. I would think that's what 290 00:15:28,880 --> 00:15:32,360 Speaker 2: I get paid for. I would say if the Supreme 291 00:15:32,400 --> 00:15:35,480 Speaker 2: Court case on Montgomery goes out of saying brokers are 292 00:15:35,480 --> 00:15:37,800 Speaker 2: going to be held liable, or should say could be 293 00:15:37,920 --> 00:15:40,960 Speaker 2: held liable, if that becomes the law of the land. 294 00:15:41,040 --> 00:15:43,840 Speaker 2: Now it's no longer three circuits say you're not liable. 295 00:15:43,920 --> 00:15:46,680 Speaker 2: Three circuits say you are liable. Now it's okay, you're 296 00:15:46,760 --> 00:15:48,880 Speaker 2: liable any single time you're out on the road, and 297 00:15:48,920 --> 00:15:52,240 Speaker 2: that means any single time and a truck is involved 298 00:15:52,240 --> 00:15:54,920 Speaker 2: with an accident. Now this is not the truck causes 299 00:15:54,960 --> 00:15:57,760 Speaker 2: the accident. Truck is involved in the accident. You were 300 00:15:57,800 --> 00:16:00,080 Speaker 2: going to bring that broker in and your problem. They 301 00:16:00,320 --> 00:16:02,600 Speaker 2: try to bring in the manufacturer of the equipment and 302 00:16:02,680 --> 00:16:05,760 Speaker 2: the least in company that owns the equipment because they're 303 00:16:05,840 --> 00:16:09,320 Speaker 2: always trying to find who's got the deepest pocket, and 304 00:16:09,400 --> 00:16:11,880 Speaker 2: so even if you're not fully liable, you're going to 305 00:16:11,880 --> 00:16:13,480 Speaker 2: see these brokers get tagged in there, and that will 306 00:16:13,560 --> 00:16:16,720 Speaker 2: ultimately be a benefit, I would think for the megabrokers, 307 00:16:16,960 --> 00:16:19,440 Speaker 2: because they've been doing this for a minute. For the 308 00:16:19,520 --> 00:16:22,040 Speaker 2: smaller folks, I don't know how they survive when they 309 00:16:22,040 --> 00:16:25,320 Speaker 2: have a new cap expenditure every single year on this 310 00:16:25,640 --> 00:16:28,840 Speaker 2: big chunk of insurance for someone that they have zero 311 00:16:29,040 --> 00:16:30,720 Speaker 2: control over, zero control. 312 00:16:31,720 --> 00:16:35,200 Speaker 1: Yeah, it is amazing how much some law firms are 313 00:16:35,240 --> 00:16:39,080 Speaker 1: spending on advertising to go after trucking companies. You know 314 00:16:39,960 --> 00:16:42,600 Speaker 1: the ads. You probably see the billboards in the highway 315 00:16:42,800 --> 00:16:45,840 Speaker 1: if you've been hurt by in a truck or I 316 00:16:45,880 --> 00:16:49,200 Speaker 1: know things. I think it's in was it in Texas? 317 00:16:49,280 --> 00:16:51,400 Speaker 1: Some crazy guys on top of a truck with an 318 00:16:51,600 --> 00:16:55,600 Speaker 1: axe screaming about what he can do for you. I 319 00:16:55,640 --> 00:16:56,880 Speaker 1: forget the gentleman's name. 320 00:16:57,040 --> 00:16:59,960 Speaker 2: It's really interesting to look at the economics of these case. 321 00:17:00,880 --> 00:17:04,960 Speaker 2: A lawyer in a catastrophic accident like this might be 322 00:17:05,080 --> 00:17:09,160 Speaker 2: getting a third of the payout a third and that 323 00:17:09,320 --> 00:17:12,760 Speaker 2: third is you know, it's like a lottery ticket. You 324 00:17:12,800 --> 00:17:15,639 Speaker 2: can retire off of one hundred million dollar verdict, but 325 00:17:15,640 --> 00:17:19,600 Speaker 2: they'll get multiple versions of this over time. The defense 326 00:17:19,640 --> 00:17:23,240 Speaker 2: attorneys they're getting paid, you know, they bill by the hour, 327 00:17:23,320 --> 00:17:27,200 Speaker 2: but they're making, in many cases, a fraction of what 328 00:17:27,240 --> 00:17:30,639 Speaker 2: the defense attorneys are making. The plaintiff attorneys will have 329 00:17:31,160 --> 00:17:34,960 Speaker 2: multiple versions of mock trials. On a given case. They'll 330 00:17:34,960 --> 00:17:37,600 Speaker 2: do this thing seven eight times if the case is 331 00:17:37,600 --> 00:17:41,240 Speaker 2: big enough, and the defensive attorneys can't get the insurers 332 00:17:41,280 --> 00:17:43,560 Speaker 2: to pay for more than one or two. So it's 333 00:17:43,600 --> 00:17:47,000 Speaker 2: a prepper. It's an asymmetric warfare. It's happening out there. 334 00:17:47,119 --> 00:17:48,920 Speaker 2: And the newest thing lee which a lot of people 335 00:17:49,000 --> 00:17:52,960 Speaker 2: haven't heard a ton about, is the litigation financing. One 336 00:17:53,000 --> 00:17:56,280 Speaker 2: of the benefits benefits of being a defense attorney is 337 00:17:56,320 --> 00:17:59,240 Speaker 2: you you can wait. You're getting paid, you can wait. 338 00:17:59,400 --> 00:18:03,000 Speaker 2: The plaintiff he gets everything if he wins, or nothing, 339 00:18:03,280 --> 00:18:05,960 Speaker 2: you get nothing. If you are a plantiff attorney and 340 00:18:06,040 --> 00:18:08,840 Speaker 2: you lose the case, you don't make any money. And 341 00:18:08,920 --> 00:18:11,679 Speaker 2: so it's a kill or be killed kind of world. 342 00:18:12,000 --> 00:18:16,160 Speaker 2: But now you have investors who can come in and 343 00:18:16,320 --> 00:18:21,080 Speaker 2: basically finance the litigation and take a vested rite and 344 00:18:21,200 --> 00:18:24,640 Speaker 2: that's crazy. That's crazy, but that's the world. 345 00:18:24,480 --> 00:18:28,000 Speaker 1: We live in. And so saying all these things, you know, 346 00:18:28,080 --> 00:18:30,920 Speaker 1: you're a human, you ever desire to become a plant 347 00:18:30,920 --> 00:18:31,440 Speaker 1: of attorney. 348 00:18:32,200 --> 00:18:34,439 Speaker 2: I have thought about this for many years because one 349 00:18:34,440 --> 00:18:36,240 Speaker 2: of the things I just to give you an idea of, 350 00:18:36,240 --> 00:18:39,560 Speaker 2: like what I think about. One in five commercial vehicles 351 00:18:39,560 --> 00:18:41,800 Speaker 2: are unsafe at any speed. That's a national out of 352 00:18:41,800 --> 00:18:44,560 Speaker 2: service rate for commercial vehicles. Right now, we have seen 353 00:18:44,600 --> 00:18:49,000 Speaker 2: the Trump administration talking a lot about driver qualification, truck 354 00:18:49,080 --> 00:18:53,800 Speaker 2: driving schools, English language proficiency, non domiciled CDLs. These are 355 00:18:53,840 --> 00:18:58,200 Speaker 2: all ancillary to the core issues I see our supply 356 00:18:58,320 --> 00:19:01,920 Speaker 2: chain facing, which is vehicle maintenance. So have I been 357 00:19:02,000 --> 00:19:05,600 Speaker 2: tempted by the sirens song of the lottery winnings? Maybe 358 00:19:06,000 --> 00:19:08,840 Speaker 2: not yet, not yet. I prefer to work inside this 359 00:19:08,960 --> 00:19:12,480 Speaker 2: industry as opposed outside the industry. But you can see 360 00:19:12,480 --> 00:19:15,439 Speaker 2: how the incentives kind of change when you're able to 361 00:19:15,480 --> 00:19:20,440 Speaker 2: see a pathway to retire with one case. And ninety 362 00:19:20,520 --> 00:19:23,359 Speaker 2: five percent or more of cases never go to trial. 363 00:19:23,760 --> 00:19:25,760 Speaker 2: They are settled well before they get in front of 364 00:19:25,760 --> 00:19:26,160 Speaker 2: a jury. 365 00:19:27,200 --> 00:19:31,080 Speaker 1: Right, interesting stuff. So outside of these nuclear verticts and 366 00:19:31,200 --> 00:19:34,679 Speaker 1: plaintive attorneys, what else are you looking at from your 367 00:19:34,760 --> 00:19:37,800 Speaker 1: vantage point as it relates to law and supply chains. 368 00:19:38,080 --> 00:19:42,120 Speaker 2: The most interesting case in my lifetime and probably your 369 00:19:42,240 --> 00:19:46,400 Speaker 2: lifetime too, is currently under consideration at the US Supreme Court. 370 00:19:46,440 --> 00:19:49,280 Speaker 1: This is Wait, what is my lifetime different than your lifetime? 371 00:19:49,320 --> 00:19:52,280 Speaker 2: Wait, well, it's the same. I think everyone than you. 372 00:19:54,720 --> 00:19:57,440 Speaker 2: Everyone has different priorities in what they think is important, 373 00:19:57,720 --> 00:20:00,040 Speaker 2: and I think most people look at like the the 374 00:20:00,119 --> 00:20:03,760 Speaker 2: last couple of years ago, Oh, we saw Chevron get 375 00:20:03,840 --> 00:20:07,680 Speaker 2: overturned in the Lowberbright case, the deference given to agencies. 376 00:20:07,720 --> 00:20:10,399 Speaker 2: The business community was very excited about this. What I 377 00:20:10,520 --> 00:20:13,359 Speaker 2: have seen as the most interesting case is this case 378 00:20:13,400 --> 00:20:18,439 Speaker 2: called Learning Resources v. Trump or previously Vos Selections versus Trump. 379 00:20:18,800 --> 00:20:23,760 Speaker 2: This is the AEPA case the International Emergency Economic Powers Act. 380 00:20:23,760 --> 00:20:27,040 Speaker 2: It was done in nineteen seventy seven. Jimmy Carter signed it. 381 00:20:27,040 --> 00:20:29,159 Speaker 2: It kind of took over from this thing called the 382 00:20:29,160 --> 00:20:31,639 Speaker 2: Trading with the Enemies Act. But for the folks who 383 00:20:31,680 --> 00:20:34,400 Speaker 2: were listening, and I'm sure all of them remember Liberation Day, 384 00:20:34,760 --> 00:20:38,680 Speaker 2: what essentially happened was back April of last year, President 385 00:20:38,680 --> 00:20:41,600 Speaker 2: Trump declared an emergency and the emergency kind of moved 386 00:20:41,600 --> 00:20:44,639 Speaker 2: around was trade death sits. It was narcotics. There's a 387 00:20:44,640 --> 00:20:47,200 Speaker 2: whole bunch of other different things. But what it practically 388 00:20:47,240 --> 00:20:51,119 Speaker 2: allowed him to do was utilize this law to create 389 00:20:51,160 --> 00:20:55,000 Speaker 2: a global tariff on every trading partner we had. And 390 00:20:55,440 --> 00:20:58,800 Speaker 2: that went to court immediately, and in the Court of 391 00:20:58,840 --> 00:21:01,680 Speaker 2: International Trade, which is a US federal court, the Trump 392 00:21:01,720 --> 00:21:05,320 Speaker 2: administration lost, and for one day, one day in May 393 00:21:05,400 --> 00:21:08,399 Speaker 2: of last year, all the tariffs that were reciprocal tariffs 394 00:21:08,480 --> 00:21:11,399 Speaker 2: were paused, all of them. And then the federal Appellate 395 00:21:11,480 --> 00:21:13,119 Speaker 2: Court stepped in and said, we're going to take this 396 00:21:13,200 --> 00:21:15,760 Speaker 2: case on. We're going to let the tariffs remain in place, 397 00:21:15,760 --> 00:21:17,840 Speaker 2: but we're going to look at what the issues are, 398 00:21:18,240 --> 00:21:21,960 Speaker 2: and a per curium decision, like the entire appellate court 399 00:21:22,000 --> 00:21:25,280 Speaker 2: for that circuit got together and they all heard the case, 400 00:21:25,560 --> 00:21:28,199 Speaker 2: they all voted, and they said, once again, this is 401 00:21:28,200 --> 00:21:31,960 Speaker 2: an illegal use of the emergency powers under AEPA. Never 402 00:21:32,040 --> 00:21:36,440 Speaker 2: before in anyone's lifetime has AYEPA been used to create 403 00:21:36,560 --> 00:21:40,760 Speaker 2: revenue generation revenue generating tariff. Never before. So it goes 404 00:21:40,760 --> 00:21:42,840 Speaker 2: to the US Supreme Court, and this is one of 405 00:21:42,880 --> 00:21:46,480 Speaker 2: the most fundamental questions that we as Americans have to 406 00:21:46,480 --> 00:21:50,480 Speaker 2: think about, is what power should Congress have that they 407 00:21:50,560 --> 00:21:54,880 Speaker 2: aren't able to delegate. And Congress has two real powers, 408 00:21:54,920 --> 00:21:58,320 Speaker 2: the power to declare war in the power to raise revenue. 409 00:21:58,359 --> 00:22:03,240 Speaker 2: Those are their powers. And we have watched for decades 410 00:22:03,280 --> 00:22:07,000 Speaker 2: both Republicans and Democrats in the Congress happily give up 411 00:22:07,040 --> 00:22:10,119 Speaker 2: their power, happily happily give up the power and the 412 00:22:10,119 --> 00:22:13,159 Speaker 2: accountability to the executive branch. But now you have a 413 00:22:13,240 --> 00:22:16,840 Speaker 2: different environment, and if this case goes the way that 414 00:22:17,840 --> 00:22:21,600 Speaker 2: some groups want, these tariffs will be what any new 415 00:22:21,680 --> 00:22:25,600 Speaker 2: president does day one is declare an emergency. Whatever thing 416 00:22:25,680 --> 00:22:28,960 Speaker 2: they could not achieve politically with the help of Congress, 417 00:22:29,160 --> 00:22:32,480 Speaker 2: they will do through this emergency power. And the only 418 00:22:32,680 --> 00:22:36,400 Speaker 2: practical way to stop it is two thirds of Congress 419 00:22:36,600 --> 00:22:42,000 Speaker 2: to override the emergency declaration. That's insane, like that'll never happen. 420 00:22:42,119 --> 00:22:45,439 Speaker 2: Is practically impossible. And so that's why this case is 421 00:22:45,480 --> 00:22:49,360 Speaker 2: so interesting. And it went fastly. I mean it was April, 422 00:22:49,400 --> 00:22:53,160 Speaker 2: it was announced like the tariffs, and then by November December, 423 00:22:53,240 --> 00:22:56,000 Speaker 2: we were in the Supreme Court United States listening to 424 00:22:56,160 --> 00:23:00,800 Speaker 2: the justices answer questions and push back on the different lawyers. 425 00:23:01,000 --> 00:23:02,280 Speaker 2: And so, what do you think the results are going 426 00:23:02,359 --> 00:23:06,359 Speaker 2: to be That is a great question. Once again, I 427 00:23:06,560 --> 00:23:09,919 Speaker 2: believe that the most important document in all of this 428 00:23:10,080 --> 00:23:13,800 Speaker 2: case was the Amikus brief filed by the US Chamber 429 00:23:13,880 --> 00:23:19,440 Speaker 2: of Commerce. Now we have seen various lobbying organizations or 430 00:23:19,480 --> 00:23:25,400 Speaker 2: associations approach the Trump administration in very cautious ways. They 431 00:23:25,480 --> 00:23:28,919 Speaker 2: have their goals that their members truly care about, and 432 00:23:28,960 --> 00:23:31,400 Speaker 2: they have ancillary goals. I will be very clear from 433 00:23:31,600 --> 00:23:36,000 Speaker 2: everyone I've spoken to, every association, whether they're liberal or conservative, 434 00:23:36,080 --> 00:23:39,840 Speaker 2: or business or safe whatever. None of them we're happy 435 00:23:39,840 --> 00:23:43,159 Speaker 2: about the teriffs. None of them, but almost none of 436 00:23:43,200 --> 00:23:47,399 Speaker 2: them filed an amiekus brief. The US Chamber of Commerce did, 437 00:23:47,840 --> 00:23:51,080 Speaker 2: and their Amikus brief was very clear. This is the 438 00:23:51,119 --> 00:23:54,199 Speaker 2: power of vested in Congress. It was never intended to 439 00:23:54,240 --> 00:23:56,680 Speaker 2: be able to use as a tariff revenue generation thing. 440 00:23:57,040 --> 00:23:59,920 Speaker 2: And if you let it happen now, the next administion 441 00:24:00,000 --> 00:24:03,600 Speaker 2: station will do far more damage, far more nuanced. And 442 00:24:03,640 --> 00:24:05,280 Speaker 2: I use the example, and they use this in the 443 00:24:05,320 --> 00:24:08,680 Speaker 2: case on the Supreme Court. Imagine you have a very 444 00:24:08,800 --> 00:24:11,320 Speaker 2: liberal person come into office and they say, well, the 445 00:24:11,600 --> 00:24:15,160 Speaker 2: global climate change is in emergency. I think internal combustion 446 00:24:15,280 --> 00:24:17,120 Speaker 2: engines and all of those components should have a five 447 00:24:17,160 --> 00:24:20,399 Speaker 2: thousand percent tariff and you practically could do nothing to 448 00:24:20,400 --> 00:24:24,439 Speaker 2: stop it. So my call. Initially, before I read the 449 00:24:24,640 --> 00:24:27,240 Speaker 2: US Chamber of Commerce's brief, I thought Trump and the 450 00:24:27,480 --> 00:24:30,359 Speaker 2: administration was going to be successful. Now I don't think so. 451 00:24:30,960 --> 00:24:33,240 Speaker 2: I think it's five to four or six to three. 452 00:24:33,840 --> 00:24:37,119 Speaker 2: Find the President does not have the power under AIPA 453 00:24:37,480 --> 00:24:39,879 Speaker 2: to do what he did, and that would be a 454 00:24:40,000 --> 00:24:43,440 Speaker 2: wonderful thing. I love parts what the administration has done, 455 00:24:43,440 --> 00:24:46,120 Speaker 2: but I do not love the use of emergency powers 456 00:24:46,320 --> 00:24:48,199 Speaker 2: because well, the last thing I'll mentioned this is the 457 00:24:48,240 --> 00:24:53,080 Speaker 2: average emergency league lasts for ten years. These are not 458 00:24:53,320 --> 00:24:56,200 Speaker 2: like we're here today and it's good to No, it's 459 00:24:56,520 --> 00:24:58,240 Speaker 2: it's a long time, right. 460 00:24:58,640 --> 00:25:01,439 Speaker 1: That's so it'll be interesting, and I'm sorry if you 461 00:25:01,480 --> 00:25:04,439 Speaker 1: mentioned it. So when when are we expecting a ruling? 462 00:25:04,880 --> 00:25:07,600 Speaker 2: This is a weird case because of how fast it went, 463 00:25:07,840 --> 00:25:11,200 Speaker 2: so we are expecting to hear a verdict or ruling 464 00:25:11,280 --> 00:25:13,960 Speaker 2: or an opinion on this, probably in the next couple 465 00:25:14,000 --> 00:25:18,280 Speaker 2: of months. Now. Some major US shippers, cost Co, the 466 00:25:18,560 --> 00:25:22,200 Speaker 2: retailer is an example of this, have already proactively sued 467 00:25:22,200 --> 00:25:25,639 Speaker 2: the Trump administration saying, hey, give me back my money. 468 00:25:25,720 --> 00:25:28,720 Speaker 2: I want where's my money? And we're going to have 469 00:25:28,760 --> 00:25:31,760 Speaker 2: a challenge, like if these teriffs are found to be illegal, 470 00:25:31,800 --> 00:25:34,600 Speaker 2: they were illegal the day they were made, not like 471 00:25:34,760 --> 00:25:37,080 Speaker 2: when we found them to be illegal on the Supreme Court. 472 00:25:37,280 --> 00:25:40,920 Speaker 2: So there might be hundreds of billions of dollars that 473 00:25:41,040 --> 00:25:45,680 Speaker 2: might be refunded to various taxpayers or importers. So it's 474 00:25:45,720 --> 00:25:46,560 Speaker 2: going to be interesting. 475 00:25:46,760 --> 00:25:48,679 Speaker 1: I'm sure a lot of that money has been spent already. 476 00:25:50,680 --> 00:25:52,919 Speaker 2: I have no doubt. I have no doubt. 477 00:25:53,200 --> 00:25:55,639 Speaker 1: Yeah. I like saying aypa. By the way, it's a 478 00:25:55,720 --> 00:25:56,200 Speaker 1: nice word. 479 00:25:56,520 --> 00:25:59,159 Speaker 2: It's a really fun word. I didn't even know about 480 00:25:59,160 --> 00:26:01,320 Speaker 2: this word until I saw this announced, Like what is 481 00:26:01,800 --> 00:26:03,800 Speaker 2: what is this new emergency power? 482 00:26:04,240 --> 00:26:08,400 Speaker 1: You always got to look at the positives, right, positive, positive, unt. 483 00:26:09,520 --> 00:26:13,359 Speaker 2: Just like if we we Americans are complacent. We're often complacent. 484 00:26:13,400 --> 00:26:16,280 Speaker 2: And part of the reason we're complacent is we don't 485 00:26:16,359 --> 00:26:19,040 Speaker 2: understand something. And if you don't understand it, well, of 486 00:26:19,080 --> 00:26:20,800 Speaker 2: course you're not gonna won't have an opinion one way 487 00:26:20,840 --> 00:26:23,000 Speaker 2: or the other. But as I've met with people when 488 00:26:23,040 --> 00:26:25,120 Speaker 2: I talk all across the country, and AYEP has been 489 00:26:25,400 --> 00:26:27,840 Speaker 2: one of these cases, every shipper wants to talk about 490 00:26:27,960 --> 00:26:30,480 Speaker 2: Most brokers want to talk about it. Motor carriers care 491 00:26:30,720 --> 00:26:33,879 Speaker 2: their equipment costs more because of it. It is important 492 00:26:33,920 --> 00:26:37,720 Speaker 2: to make it digestible and say this is not like 493 00:26:37,800 --> 00:26:39,959 Speaker 2: it's always going to be. You have to understand this 494 00:26:40,000 --> 00:26:43,639 Speaker 2: is a strange moment, and if you see this is strange, 495 00:26:43,920 --> 00:26:46,280 Speaker 2: Congress can push back. They're the only ones that can, 496 00:26:46,400 --> 00:26:48,520 Speaker 2: other than the courts, which hopefully will do what they're 497 00:26:48,560 --> 00:26:51,320 Speaker 2: supposed to do. But I found people are interested to 498 00:26:51,400 --> 00:26:53,800 Speaker 2: learn about this stuff. Now, whether that brings action, that's 499 00:26:53,840 --> 00:26:57,800 Speaker 2: another story altogether. Right, So in your world are you 500 00:26:57,840 --> 00:27:00,720 Speaker 2: do you do you look at railroads much? I do? 501 00:27:00,800 --> 00:27:03,560 Speaker 2: I mean I since we have a mutual friend, Anne Rinky. 502 00:27:03,600 --> 00:27:05,560 Speaker 2: I love Anne. I love what I've learned from Ana. 503 00:27:05,640 --> 00:27:09,879 Speaker 2: I mean she's the best, She's the best. There's no 504 00:27:09,920 --> 00:27:12,800 Speaker 2: one better. I would say the biggest issue for the 505 00:27:12,840 --> 00:27:14,919 Speaker 2: railroad is obviously is the merger. And I think that is, 506 00:27:15,440 --> 00:27:19,000 Speaker 2: in my opinion, it is absolutely unequivocally going to happen. 507 00:27:19,040 --> 00:27:22,200 Speaker 2: I see, no, wow, no way, it doesn't happen. 508 00:27:22,280 --> 00:27:23,880 Speaker 1: No wow, really. 509 00:27:24,000 --> 00:27:30,440 Speaker 2: Yes, absolutely really clearly absolutely five. Yeah. I will come 510 00:27:30,480 --> 00:27:32,800 Speaker 2: back when if this thing gets done, Lee, I want 511 00:27:32,880 --> 00:27:34,560 Speaker 2: to come back and I'll explain to you why I 512 00:27:34,600 --> 00:27:37,159 Speaker 2: think it happened, and if I if I'm wrong. I 513 00:27:37,200 --> 00:27:39,280 Speaker 2: don't think I'm going to be wrong. If I'm wrong, 514 00:27:39,320 --> 00:27:42,399 Speaker 2: then you can punish me and degrade me because I 515 00:27:42,440 --> 00:27:42,720 Speaker 2: have made it. 516 00:27:42,840 --> 00:27:46,320 Speaker 1: Oh no, listen, I think consensus is that it's going 517 00:27:46,359 --> 00:27:50,200 Speaker 1: to happen. We happen to be below consensus. We put 518 00:27:50,200 --> 00:27:54,600 Speaker 1: out a probability. It's it's probably not very mathematically sophisticated 519 00:27:54,600 --> 00:27:56,280 Speaker 1: how we come about it, but you know, when it 520 00:27:56,359 --> 00:27:58,960 Speaker 1: first was announced, we gave it a thirty thirty five 521 00:27:59,000 --> 00:28:03,320 Speaker 1: percent probability, and over the last couple of months we've 522 00:28:03,320 --> 00:28:05,920 Speaker 1: been been increasing that and we're around sixty percent now 523 00:28:06,119 --> 00:28:08,399 Speaker 1: and we're still we're still well below consensus, and we 524 00:28:08,440 --> 00:28:12,000 Speaker 1: could move further up as things progress. And probably the 525 00:28:12,320 --> 00:28:14,560 Speaker 1: biggest change is, you know, what's going on with the 526 00:28:14,600 --> 00:28:18,639 Speaker 1: membership the board members of the Surface Transportation Board. So 527 00:28:18,640 --> 00:28:22,119 Speaker 1: we'll have to see to see what happens there. And 528 00:28:22,400 --> 00:28:25,479 Speaker 1: there's a there's another case right about whether or not 529 00:28:26,160 --> 00:28:30,760 Speaker 1: the administration can fire independent people that are on independent boards. 530 00:28:30,840 --> 00:28:35,040 Speaker 2: So yeah, so I'll take the last point you said first, 531 00:28:35,040 --> 00:28:38,400 Speaker 2: this idea of can the executive brand can Trump just 532 00:28:38,560 --> 00:28:42,479 Speaker 2: fire anybody who serves underneath him essentially, and it might 533 00:28:42,520 --> 00:28:45,400 Speaker 2: be independent or qualiti independent. And this is the belief 534 00:28:45,440 --> 00:28:49,440 Speaker 2: that has been kind of promulgated called the unitary executive, 535 00:28:49,480 --> 00:28:53,760 Speaker 2: the idea that an executive Trump or any present has 536 00:28:53,840 --> 00:28:57,760 Speaker 2: complete authority over his division of government. And even though 537 00:28:57,760 --> 00:29:01,520 Speaker 2: these cases keep happening because they can firing different attorneys, 538 00:29:01,560 --> 00:29:05,480 Speaker 2: they fire different directors, whatever, I feel that this Supreme 539 00:29:05,560 --> 00:29:10,200 Speaker 2: Court is likely the most friendly to that legal theory 540 00:29:10,440 --> 00:29:13,320 Speaker 2: that we've ever had. I mean there's not a lot. 541 00:29:13,360 --> 00:29:16,560 Speaker 2: I don't see a Roberts or a Gorsic or Amy 542 00:29:16,560 --> 00:29:19,120 Speaker 2: Cohen Barrett be like no, no, no, you can't do that. 543 00:29:19,520 --> 00:29:22,080 Speaker 2: So I think that the firing of these different people 544 00:29:22,160 --> 00:29:25,520 Speaker 2: is again Trump testing the boundaries of what he's allowed 545 00:29:25,560 --> 00:29:28,120 Speaker 2: to do and seeing what sticks and what doesn't stick. 546 00:29:28,480 --> 00:29:31,120 Speaker 2: As for like the merger itself, I think my feeling 547 00:29:31,240 --> 00:29:35,080 Speaker 2: is the biggest competitor for the rails or the over 548 00:29:35,080 --> 00:29:38,840 Speaker 2: the road trucking companies. They do work together, they collaborate, 549 00:29:38,840 --> 00:29:41,960 Speaker 2: they can participate, they battle, But like the story I 550 00:29:42,040 --> 00:29:44,000 Speaker 2: hear from every intermodal meeting is how do we get 551 00:29:44,040 --> 00:29:46,440 Speaker 2: more stuff moving on the rails versus over the road Now, 552 00:29:46,520 --> 00:29:50,400 Speaker 2: the trucking industry generally works very closely with the intermodal folks. 553 00:29:50,400 --> 00:29:52,600 Speaker 2: They're doing a lot of dreywork all these things. But 554 00:29:52,880 --> 00:29:57,000 Speaker 2: if you see the Transcontinental Railroad as this goal, and 555 00:29:57,040 --> 00:30:01,000 Speaker 2: I think you have the best regulatory framework existing to 556 00:30:01,200 --> 00:30:05,080 Speaker 2: do that. And my feeling is if that deal gets done, 557 00:30:05,720 --> 00:30:09,520 Speaker 2: I think the next day BNSF acquire CSX. Now they've 558 00:30:09,520 --> 00:30:11,600 Speaker 2: said they're not going to do that, but they have 559 00:30:12,600 --> 00:30:14,120 Speaker 2: there's no reason to say they're going to do that. 560 00:30:14,440 --> 00:30:17,880 Speaker 2: But if you get the first one done, there's precedent 561 00:30:17,920 --> 00:30:19,880 Speaker 2: that you're not going to stop the second one. So 562 00:30:20,040 --> 00:30:24,280 Speaker 2: my feeling is this is the natural consequence of kind 563 00:30:24,320 --> 00:30:27,720 Speaker 2: of re getting up big big companies. And as we 564 00:30:27,760 --> 00:30:30,560 Speaker 2: see autonomous trucks eventually make it to the roads, that'll 565 00:30:30,560 --> 00:30:32,680 Speaker 2: be another competitor the rails have to deal with. So 566 00:30:32,760 --> 00:30:35,200 Speaker 2: this is one of the ways they can they can 567 00:30:35,240 --> 00:30:37,760 Speaker 2: try to achieve that great value for the shareholders, I 568 00:30:37,800 --> 00:30:39,960 Speaker 2: mean great value for this American supply chainel. 569 00:30:40,240 --> 00:30:42,480 Speaker 1: Yeah, so I mean Union Pacific in Norfolk Southern must 570 00:30:42,560 --> 00:30:46,080 Speaker 1: prove that it's in the public's interest and it enhances competition. 571 00:30:46,720 --> 00:30:50,400 Speaker 1: We've seen early aspects of it actually enhancing competition because 572 00:30:50,400 --> 00:30:53,280 Speaker 1: you see CSX and Burlington Northern and and you know 573 00:30:53,360 --> 00:30:56,920 Speaker 1: CSX and some of the Canadian railroads getting together and 574 00:30:56,960 --> 00:31:01,280 Speaker 1: providing services, which you know UP and n S can't 575 00:31:01,360 --> 00:31:04,800 Speaker 1: yet because they really can't work together until the merger 576 00:31:05,080 --> 00:31:09,320 Speaker 1: is is finalized. But you know you've seen that. But 577 00:31:09,880 --> 00:31:13,920 Speaker 1: it is debatable about whether it's really going to enhance 578 00:31:13,960 --> 00:31:16,160 Speaker 1: competition outside that because at the end of the day, 579 00:31:16,200 --> 00:31:19,880 Speaker 1: the the trucking industry has been taking share from rails 580 00:31:19,880 --> 00:31:24,000 Speaker 1: and it's not because of you know, railroads is cheaper. 581 00:31:24,520 --> 00:31:27,400 Speaker 1: It's not because it's because it's all about service, right, Yeah, 582 00:31:28,280 --> 00:31:30,960 Speaker 1: And you know UP and NS have talked about how 583 00:31:31,000 --> 00:31:32,840 Speaker 1: it's you know, they're going to be able to cut 584 00:31:32,880 --> 00:31:37,000 Speaker 1: down significant hours going from the west coast to the 585 00:31:37,800 --> 00:31:39,760 Speaker 1: to the east coast, but the reality is a lot 586 00:31:39,800 --> 00:31:44,560 Speaker 1: of that traffic is already on the rails unless it's expedited, So, 587 00:31:45,160 --> 00:31:47,640 Speaker 1: you know it, I think it's debatable. I think it's 588 00:31:47,680 --> 00:31:50,240 Speaker 1: it's a high hurdle. It's not a hurdle that they 589 00:31:50,280 --> 00:31:52,400 Speaker 1: maybe can't get over, but it's definitely a high hurdle 590 00:31:52,440 --> 00:31:54,320 Speaker 1: and it'll be interesting to see how it plays out. 591 00:31:55,080 --> 00:31:56,880 Speaker 2: And I agree with you if if if that, if 592 00:31:57,000 --> 00:31:57,760 Speaker 2: the deal does. 593 00:31:57,600 --> 00:32:00,400 Speaker 1: Happen, you're going to see a tie up, whether it's 594 00:32:00,480 --> 00:32:04,840 Speaker 1: you know, cn CSX or c PCSX or b n CSX. 595 00:32:05,160 --> 00:32:07,600 Speaker 1: You know CSX is definitely going to probably you know, 596 00:32:07,720 --> 00:32:08,719 Speaker 1: find a dance partner. 597 00:32:08,960 --> 00:32:10,840 Speaker 2: Yeah. I couldn't agree with you more. I think what 598 00:32:10,920 --> 00:32:12,800 Speaker 2: I've always understood it to be is that if you 599 00:32:12,880 --> 00:32:17,040 Speaker 2: using cheaply delivered rails, the most affordable way to move stuff, 600 00:32:17,040 --> 00:32:18,640 Speaker 2: but it's a little bit slower most of the time 601 00:32:18,760 --> 00:32:21,040 Speaker 2: and open the road expedite. So if you can compete 602 00:32:21,120 --> 00:32:24,280 Speaker 2: on speed, that's what the race is, speed and price. 603 00:32:24,360 --> 00:32:26,760 Speaker 2: And the service is important too, but it's it's really 604 00:32:26,800 --> 00:32:28,000 Speaker 2: about that speed and price. 605 00:32:28,440 --> 00:32:32,880 Speaker 1: Yeah. Yeah, so we'll we'll. I guess we'll just have 606 00:32:32,920 --> 00:32:35,480 Speaker 1: to wait and see. We have we have quite some time. 607 00:32:36,640 --> 00:32:39,040 Speaker 2: If we get named a new service transportation board member, 608 00:32:39,080 --> 00:32:41,040 Speaker 2: that'll be the really interesting thing that will kind of 609 00:32:41,040 --> 00:32:43,720 Speaker 2: help tell us where this is going, because I think 610 00:32:43,760 --> 00:32:47,440 Speaker 2: the one director who was removed from that board they 611 00:32:47,480 --> 00:32:50,240 Speaker 2: had opposed another merger prior, and I think that is 612 00:32:50,440 --> 00:32:53,320 Speaker 2: likely what the that's my feelings. Like we see the 613 00:32:53,360 --> 00:32:55,120 Speaker 2: t leaves, we see the signals and go okay, I 614 00:32:55,160 --> 00:32:57,120 Speaker 2: think I know where this story is going to end at. 615 00:32:57,480 --> 00:33:00,520 Speaker 1: Yeah, Robert Primis was fired and he was the only 616 00:33:01,480 --> 00:33:04,560 Speaker 1: person on the STB board at the time that said 617 00:33:04,640 --> 00:33:10,000 Speaker 1: no to CP in case Kansas City Southern merger. So yeah, 618 00:33:10,400 --> 00:33:12,520 Speaker 1: it will be it will be interesting. And they're the 619 00:33:12,560 --> 00:33:14,960 Speaker 1: one Democrat. I believe her term ends at the end 620 00:33:15,040 --> 00:33:18,120 Speaker 1: of the year. Uh, that that is on the board currently, 621 00:33:18,200 --> 00:33:22,680 Speaker 1: So it could be definitely stacked towards the Trump administration. 622 00:33:23,080 --> 00:33:27,120 Speaker 1: Uh again again, assuming if Robert Primus doesn't get his 623 00:33:27,200 --> 00:33:28,920 Speaker 1: job back, because I think he's fighting for that in 624 00:33:28,960 --> 00:33:29,440 Speaker 1: the courts. 625 00:33:29,800 --> 00:33:32,400 Speaker 2: Absolutely. It's it's crazy, man, Like what I love about 626 00:33:32,400 --> 00:33:34,440 Speaker 2: the law and supply chains, like you can't opt out 627 00:33:34,440 --> 00:33:37,280 Speaker 2: of either one of these things. And so to understand 628 00:33:37,280 --> 00:33:39,280 Speaker 2: how the supply chains are moving, part of it has 629 00:33:39,320 --> 00:33:42,040 Speaker 2: to be looking at the legal framework behind it. How 630 00:33:42,080 --> 00:33:44,120 Speaker 2: does it drive these mergers or all the other things. 631 00:33:44,120 --> 00:33:45,720 Speaker 2: That's just fascinating to watch it unfold. 632 00:33:46,320 --> 00:33:48,680 Speaker 1: Yeah, and also, you know the Trump administration, going back 633 00:33:48,680 --> 00:33:51,000 Speaker 1: to trucking, they've been very active on, you know, trying 634 00:33:51,040 --> 00:33:53,760 Speaker 1: to change the supply in the trucking market some you know, 635 00:33:55,280 --> 00:33:58,360 Speaker 1: very reasonable things that they're doing. They're they're they're looking 636 00:33:58,400 --> 00:34:00,280 Speaker 1: to enforce rules that are already on the book, whether 637 00:34:00,360 --> 00:34:05,840 Speaker 1: it's English language proficiencies in your practice, have you come 638 00:34:05,840 --> 00:34:10,360 Speaker 1: across any cases with English language proficiencies or non domicile 639 00:34:10,520 --> 00:34:13,240 Speaker 1: CDL holders coming to you and looking for help. 640 00:34:13,640 --> 00:34:17,359 Speaker 2: No, not really. So the vast majority of non domiciled 641 00:34:17,400 --> 00:34:21,400 Speaker 2: CDL holders that are real, like domicile of a foreign country. 642 00:34:21,719 --> 00:34:24,200 Speaker 2: These tend to be folks from Mexico or Canada. They're 643 00:34:24,200 --> 00:34:26,239 Speaker 2: working on the border. That is where the most and 644 00:34:26,280 --> 00:34:28,960 Speaker 2: there's no real the government doesn't have good data on 645 00:34:29,120 --> 00:34:31,759 Speaker 2: where the different countries of origin are. For the folks 646 00:34:31,800 --> 00:34:35,560 Speaker 2: that have non domiciled CDLs, the FMCSA estimates it's about 647 00:34:35,600 --> 00:34:38,359 Speaker 2: two hundred thousand. Now some people say more, as people 648 00:34:38,440 --> 00:34:41,080 Speaker 2: say less, but you're still talking a fraction of the 649 00:34:41,120 --> 00:34:44,080 Speaker 2: overall driver population, so it's very very small on the 650 00:34:44,080 --> 00:34:46,800 Speaker 2: English language proficiency side. You're exactly right. This is a 651 00:34:46,880 --> 00:34:49,160 Speaker 2: law that spent on the book since the nineteen thirties, 652 00:34:49,160 --> 00:34:51,600 Speaker 2: like thirty eight I think or thirty seven, so it's 653 00:34:51,640 --> 00:34:53,239 Speaker 2: not like it's a new law. But it is an 654 00:34:53,280 --> 00:34:55,480 Speaker 2: out of service. So now if you are caught and 655 00:34:55,520 --> 00:34:58,200 Speaker 2: you can't pass that test, you're sitting until someone can 656 00:34:58,200 --> 00:35:00,560 Speaker 2: come get a recovery driver for you, But I have 657 00:35:00,640 --> 00:35:03,279 Speaker 2: never encountered those ten Again tend to be on the 658 00:35:03,800 --> 00:35:06,279 Speaker 2: border areas. There are people who are running around here 659 00:35:06,320 --> 00:35:08,719 Speaker 2: doing a cabotage. Essentually they come in the United States, 660 00:35:08,760 --> 00:35:10,239 Speaker 2: they run around a couple of routes, and then they 661 00:35:10,320 --> 00:35:13,760 Speaker 2: go back down or go up. But never in my practice. 662 00:35:13,760 --> 00:35:14,600 Speaker 2: But I would refer. 663 00:35:14,440 --> 00:35:17,920 Speaker 1: People out there right by the way. Cabotage is another 664 00:35:18,920 --> 00:35:21,120 Speaker 1: personal favorite word of mine. It sounds good. 665 00:35:21,360 --> 00:35:24,319 Speaker 2: We have the best jargon and supply chain, the best, 666 00:35:24,480 --> 00:35:24,799 Speaker 2: the best. 667 00:35:24,840 --> 00:35:26,400 Speaker 1: Sabotage sounds delicious. 668 00:35:26,800 --> 00:35:31,160 Speaker 2: Whatever it is, it's a slow boiled cabbage. It's very 669 00:35:31,280 --> 00:35:34,040 Speaker 2: very good. Taking inside there. I think I'm pretty sure. 670 00:35:34,640 --> 00:35:39,640 Speaker 1: So we talked about brokers earlier. Broker transparency. What is it? 671 00:35:39,680 --> 00:35:40,520 Speaker 1: Why should we care? 672 00:35:41,360 --> 00:35:45,440 Speaker 2: My goodness, if if you're a shipper, you're a manufacturer, 673 00:35:45,440 --> 00:35:49,160 Speaker 2: distributed retailer, you may not really care about what this 674 00:35:49,239 --> 00:35:53,480 Speaker 2: issue is. But this is, besides broker liability, the biggest 675 00:35:53,560 --> 00:35:57,680 Speaker 2: legal issue brokers are working against right now. And so 676 00:35:57,960 --> 00:36:01,319 Speaker 2: what broker transparency, out of the high level, boils down 677 00:36:01,360 --> 00:36:05,439 Speaker 2: to is parties to a broker transaction, the truck driver, 678 00:36:05,560 --> 00:36:08,080 Speaker 2: the motor carrier and the broker and the shipper have 679 00:36:08,320 --> 00:36:12,480 Speaker 2: access to the broker transaction documents. What that means practically 680 00:36:12,840 --> 00:36:15,200 Speaker 2: is that motor carrier gets to see how much the 681 00:36:15,239 --> 00:36:18,319 Speaker 2: shipper paid the broker. That's what it really kind of 682 00:36:18,320 --> 00:36:21,440 Speaker 2: boils down to. To understand this issue, we have to 683 00:36:21,480 --> 00:36:24,320 Speaker 2: go back in time just a little bit. So broker 684 00:36:24,760 --> 00:36:29,680 Speaker 2: transparency was never really about disclosing to motor cares how 685 00:36:29,760 --> 00:36:33,840 Speaker 2: much shipper paid you. It was actually about the motor 686 00:36:33,920 --> 00:36:37,040 Speaker 2: carrier disclosing to the broker how much they made on 687 00:36:37,080 --> 00:36:39,799 Speaker 2: the route. So in the old days, you would have 688 00:36:39,880 --> 00:36:42,879 Speaker 2: motor cares running around moving freight for shippers, but if 689 00:36:42,880 --> 00:36:45,359 Speaker 2: they were looking for a back haul, they might get 690 00:36:45,360 --> 00:36:47,839 Speaker 2: a freight broker or a freight agent to find them 691 00:36:47,840 --> 00:36:50,120 Speaker 2: a shipper and find them something to get back to. 692 00:36:50,400 --> 00:36:53,440 Speaker 2: But the transaction actually took place between the shipper and 693 00:36:53,480 --> 00:36:56,000 Speaker 2: that motor carrier, And so the broker would come back 694 00:36:56,040 --> 00:36:57,799 Speaker 2: and say, hey, how much money did you get on 695 00:36:57,840 --> 00:36:59,960 Speaker 2: that load, because I'm supposed to get my ten percent, 696 00:37:00,000 --> 00:37:02,480 Speaker 2: and the motor carrier would lie and say, no, we 697 00:37:02,560 --> 00:37:05,120 Speaker 2: only made that it was five percent. I can't give 698 00:37:05,160 --> 00:37:07,319 Speaker 2: you the much And you can go back into the 699 00:37:07,440 --> 00:37:11,880 Speaker 2: eighties and nineties, and see where companies like Yellow fought 700 00:37:11,960 --> 00:37:15,200 Speaker 2: against transparency. They did not want to tell the broker 701 00:37:15,560 --> 00:37:19,800 Speaker 2: how much money they made. But as the industry has changed, 702 00:37:20,320 --> 00:37:24,120 Speaker 2: that relationship has changed. So what happens now is it's 703 00:37:24,120 --> 00:37:27,840 Speaker 2: a two part transaction broker and shipper, motor carrier and broker, 704 00:37:28,040 --> 00:37:31,239 Speaker 2: two transactions, two separate things, though it's covering the same load. 705 00:37:31,600 --> 00:37:34,239 Speaker 2: So fast forward to what's happened last year and what's 706 00:37:34,280 --> 00:37:36,960 Speaker 2: going on in this year. So last year, the FMCSA 707 00:37:37,120 --> 00:37:42,120 Speaker 2: came out with a proposal to modify the broker transparency regulations, 708 00:37:42,400 --> 00:37:46,080 Speaker 2: and what they said was that one, if you requested 709 00:37:46,080 --> 00:37:49,040 Speaker 2: the records, you would have forty eight hours as a 710 00:37:49,080 --> 00:37:53,040 Speaker 2: broker to produce the records. And if you produce them, 711 00:37:53,200 --> 00:37:55,960 Speaker 2: they had to be in an electronic format, so in 712 00:37:56,000 --> 00:37:59,120 Speaker 2: an email. So again what used to happen is I'm 713 00:37:59,120 --> 00:38:03,160 Speaker 2: a motor carrier. I say to my friend at XYZ Brokerage, 714 00:38:03,239 --> 00:38:04,919 Speaker 2: how much did you make on that load? I want 715 00:38:04,920 --> 00:38:08,480 Speaker 2: to know And they might say come over to i'l 716 00:38:08,560 --> 00:38:11,520 Speaker 2: passo at two o'clock on Tuesday and I'll show you. 717 00:38:11,560 --> 00:38:13,520 Speaker 2: Otherwise I can't give them to you. So they'd make 718 00:38:13,560 --> 00:38:17,879 Speaker 2: it impossible. So the rulemaking began and then they had 719 00:38:17,880 --> 00:38:20,240 Speaker 2: a comment period and that goes on for a period 720 00:38:20,239 --> 00:38:23,719 Speaker 2: of time, and they had another comment period. Thousands of 721 00:38:23,800 --> 00:38:27,040 Speaker 2: people are saying, oh, brokers are making forty percent margin 722 00:38:27,080 --> 00:38:30,160 Speaker 2: and they no. Look at h. Robinson, they're publicly faded. 723 00:38:30,239 --> 00:38:34,839 Speaker 2: They don't make that much money. But ultimately the FMCSA 724 00:38:34,880 --> 00:38:37,680 Speaker 2: stepped back and they had they were going to make 725 00:38:37,719 --> 00:38:40,240 Speaker 2: a final rule. They said no, And now we're waiting 726 00:38:40,480 --> 00:38:43,480 Speaker 2: because in May of twenty twenty six they're going to 727 00:38:43,520 --> 00:38:47,799 Speaker 2: do a supplemental proposed rulemaking on broker transparency. Because the 728 00:38:47,840 --> 00:38:50,880 Speaker 2: real issue here, Lee is not what you produce and 729 00:38:50,920 --> 00:38:54,359 Speaker 2: when you produce it, It is can you waive that right? 730 00:38:54,840 --> 00:38:57,880 Speaker 2: And so if I'm a broker, I make every motor 731 00:38:57,960 --> 00:39:01,200 Speaker 2: carrier who works with me sign a waiver of the 732 00:39:01,280 --> 00:39:04,160 Speaker 2: rights of transparency. I just say you're not going to 733 00:39:04,239 --> 00:39:06,560 Speaker 2: get them otherwise I'm not going to work with you. 734 00:39:07,000 --> 00:39:09,959 Speaker 2: And that waiver is the real stick in the mud 735 00:39:10,040 --> 00:39:13,560 Speaker 2: for everybody. And so even if you have regulations that 736 00:39:13,640 --> 00:39:17,120 Speaker 2: modified at the FMCUSA initially proposed of forty eight hours 737 00:39:17,120 --> 00:39:19,920 Speaker 2: with an electronic format, it doesn't really matter if I 738 00:39:20,000 --> 00:39:22,799 Speaker 2: made you wave the right, and that's what the big 739 00:39:22,840 --> 00:39:25,720 Speaker 2: fight is likely going to be about. Now, I'll quickly 740 00:39:25,760 --> 00:39:31,239 Speaker 2: say this is outside the FMCSA's domain, Like I fundamentally 741 00:39:31,239 --> 00:39:35,120 Speaker 2: believe they're enabling statute to create that organizations about safety 742 00:39:35,400 --> 00:39:37,960 Speaker 2: and transparency and rates has nothing to do with safety. 743 00:39:38,320 --> 00:39:41,440 Speaker 2: Would I don't want to see the FMCSA diving into 744 00:39:41,760 --> 00:39:45,040 Speaker 2: litigation or complaints between a broker and a motorcure saying 745 00:39:45,320 --> 00:39:46,840 Speaker 2: I want to know how much you'd be on that 746 00:39:46,920 --> 00:39:49,960 Speaker 2: load of ice cream. That's absurd, But I'm maybe in 747 00:39:50,000 --> 00:39:51,120 Speaker 2: the minority. I don't know. 748 00:39:51,520 --> 00:39:53,640 Speaker 1: Well, Matt, we are coming up at the end of 749 00:39:53,680 --> 00:39:55,920 Speaker 1: our time, but before we go, I need to ask 750 00:39:55,960 --> 00:39:59,000 Speaker 1: you a question. And you know, every time I see you, 751 00:39:59,480 --> 00:40:02,120 Speaker 1: you're wearing red jacket. What's up with the red jacket? 752 00:40:02,680 --> 00:40:07,160 Speaker 2: I love my red corduroy jacket. I right, it is quarter. 753 00:40:07,320 --> 00:40:08,200 Speaker 1: I did not know that. 754 00:40:08,280 --> 00:40:12,640 Speaker 2: Wow, I found this jacket online and it was on sale. 755 00:40:12,719 --> 00:40:15,319 Speaker 2: My wife's like, I hate that jacket. They go, I 756 00:40:15,400 --> 00:40:18,160 Speaker 2: love that, therefore you love it more. I love it more, 757 00:40:18,320 --> 00:40:19,960 Speaker 2: And I made a kind of initial thing is like 758 00:40:20,040 --> 00:40:25,440 Speaker 2: you never know how people learn or remember things. Primacy recency, 759 00:40:25,520 --> 00:40:27,839 Speaker 2: Like you can get the first to last. But if 760 00:40:27,840 --> 00:40:30,120 Speaker 2: you have other things like a flashy red coat, people 761 00:40:30,160 --> 00:40:32,920 Speaker 2: are apt to remember what you're talking about, hopefully, And 762 00:40:33,000 --> 00:40:36,400 Speaker 2: so every opportunity I get to speak publicly in our industry, 763 00:40:36,680 --> 00:40:40,080 Speaker 2: I typically have my red corduroy jacket and it's a 764 00:40:40,120 --> 00:40:41,160 Speaker 2: it's a pretty good jacket. 765 00:40:41,520 --> 00:40:44,319 Speaker 1: All right, Are you speaking anywhere anytime soon? 766 00:40:44,960 --> 00:40:48,160 Speaker 2: Yeah? I will be speaking at the Transportation Lawyers Association 767 00:40:48,840 --> 00:40:51,200 Speaker 2: end of this month. In January. On January twenty third, 768 00:40:51,440 --> 00:40:54,000 Speaker 2: I'll be speaking at Manifest that's the future of supply 769 00:40:54,120 --> 00:40:58,879 Speaker 2: chain logistics out in Vegas. Yeah, they're absolutely will party down. 770 00:40:58,960 --> 00:41:01,480 Speaker 2: I get it on Sunday, I leave on Tuesday. I 771 00:41:01,560 --> 00:41:02,880 Speaker 2: got I got a lot of things I gotta do 772 00:41:03,760 --> 00:41:07,759 Speaker 2: at an Illinois Trucking Association event in March. But yeah, 773 00:41:07,800 --> 00:41:09,600 Speaker 2: it's probably once a month I go out there and 774 00:41:09,600 --> 00:41:12,080 Speaker 2: they let me leave my cage to go scream on 775 00:41:12,120 --> 00:41:12,560 Speaker 2: the internet. 776 00:41:12,640 --> 00:41:16,640 Speaker 1: Well, I definitely hope we run into each other at Manifest. 777 00:41:17,040 --> 00:41:21,200 Speaker 2: Absolutely we will have a good timely Absolutely, all right, Matt, 778 00:41:21,239 --> 00:41:23,120 Speaker 2: I just again I want to thank you for your time. 779 00:41:23,640 --> 00:41:27,359 Speaker 1: This was great. Obviously you're pro. This is a great 780 00:41:27,400 --> 00:41:31,520 Speaker 1: conversation and for those listening, you should check out Matt's podcast, 781 00:41:31,640 --> 00:41:35,080 Speaker 1: The Armchair Attorney Podcast. So thanks so much, Matt, Thank 782 00:41:35,120 --> 00:41:37,239 Speaker 1: you Lee. I appreciate being here and I want to 783 00:41:37,239 --> 00:41:39,320 Speaker 1: thank you for tuning in. If you liked the episode, 784 00:41:39,320 --> 00:41:42,080 Speaker 1: please subscribe and leave a review. We've lined up a 785 00:41:42,160 --> 00:41:44,440 Speaker 1: number of great guests for the podcast, so check back 786 00:41:44,480 --> 00:41:48,680 Speaker 1: to your conversations with C suite executives, shippers, regulators, and 787 00:41:48,719 --> 00:41:51,359 Speaker 1: decision makers within the freight markets. Also, if you want 788 00:41:51,400 --> 00:41:53,920 Speaker 1: to learn more about the freight transportation markets, check out 789 00:41:53,920 --> 00:41:56,359 Speaker 1: our work on the Bloomberg Terminal at Bigo and on 790 00:41:56,400 --> 00:41:59,000 Speaker 1: social media. This is Lee Clasgow signing off and thanks 791 00:41:59,000 --> 00:42:00,839 Speaker 1: for talking transports with me. Talk to you soon. 792 00:42:00,920 --> 00:42:08,000 Speaker 2: Bye.