I would like to submit this letter to address the issue of receipt of payment to owner/operators by the companies they work under contract with (and in the following letter this definition will be necessary to remember).
In the February issue of Truck News on page 41 was an article done with comments from OBAC. The gest of the issue was that whether it was a fuel surcharge passed on to entitled parties (O/Os), or whether it was not divulging the actual legal rate paid by the shipper, the remarks were that unfortunately these are not legal matters, but seperate business matters with little or no recourse.
Although I respect the work done by OBAC, I must in this case disagree, and here are my reasons:
1) The Load Brokers Act under the TTA (Provincial Legislation) states that a Trust Account will be set up, if it is done as a third party, or Broker. This section of the Act, and others were folded over into the HTA.
2) Any Fuel Surcharge as per past standards were to be effectively passed on 100 per cent to the owner/operator. This was done both in Canada and the United States under Transportation Law.
3) Any owner/operator who is paid a percentage of the true rate, has the right to either an electronically transmitted proof of the rate or a true written submission of the same. If other parts of the rate do not apply to the O/O, they may be blacked out. However the entitlement of the rate is available by law, as the contract is on a percentage of the rate. Remember 70 per cent of zero is still zero.
If these matters were withheld from the O/O in a deceitful manner to cause a loss to that party there is recourse.
Also if the rate was held in a trust account, if the other party did not want to leave themselves open to Breach of Trust, it would be in their best interest to follow the Law in this matter.
The reason that I state of these sections including the Load Brokers Act is that I am only one of the people who sat on the CCMTA Committee to set out the basis for this material to be be sent to the governments to become Law, which it did. The other part of this committee was to set out contractural standards for owner/operators,which we also did.
One final matter that I would like to touch on lightly is the practice of some companies changing their insurance to have the premium set as a percentage of the freight rate. The problem here is one simple question that bothers me. Does the insurance company audit the books of the company using the rate this way, or does the company just say, ‘Okay, we will say the load pays this much and charge the O/O this much for insurance on this load.’ This is an area if an insurance company was supplying insurance in this matter, would be much better off to know what the legal rate was charged for that load they insured. If not Ey-Ey-Ey.
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