Why the Trucking Industry Should be Paying Attention to this Lawsuit in Texas

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Jared Flinn: You're listening to the BulkLoads podcast, your number one resource for everything Bolt Freight Trucking. Jared Flinn: Hey, guys. Jared Flynn with the Bulk Loads podcast. Got Tyler here with me. Tyler Allison: What's going on? Jared Flinn: Oh, I feel refreshed or, rested up after a week after Tyler Allison: Last week. Yeah. Last week was a busy week. Yeah. We had So Jared Flinn: Really busy for you. Tyler Allison: Yeah. And I Jared Flinn: don't think I've told you. Thank you for putting together everything at Mags. Yeah. Tyler Allison: Yeah. Of course. Jared Flinn: This was probably my favorite year. I think it's our 3rd or 4th year. Tyler Allison: 3rd year there. Jared Flinn: And, man, it was awesome. We had a truck in the booth, which just changed the dynamic, and, thousands of people came by, 100 of our members. And, I don't know. It just felt like it worked. The flow of our booth. Yeah. And Matt's in general Tyler Allison: was just, Jared Flinn: was just awesome. Yeah. I agree. Tyler Allison: It was a lot of fun this year. Special thanks to Zach Curry, David Curry Absolutely. With MKC just letting us put their rig in our booth. I agree, Jared. It was just a lot of fun. You know, they let us hook up to the speakers and bless nineties country. So I was, getting a lot of people to our booth. We were able to have great conversations on bulk loads. Tyler Allison: I was surprised. There's a lot of guys out there that, you know, run bulk trailers who, you know, have never heard of us or whatever. So it was awesome just to talk with those guys and to I mean, it was beneficial for both, but to hear a lot of guys, just all over the nation, you know, finding out what we offer and, you know, also hearing the trouble that they're having in solutions we can provide for them. Jared Flinn: It was interesting. I learned so much about show trucks, and I've been to a handful of trucking shows and talked with these guys. But having that truck into the booth and talking to Zach specifically, they were pointing out, like, when you enter a show truck, like, the detail I mean, you know that this thing's dressed up, but they were talking about how every, like, nut has to be the same angle. Tyler Allison: Oh, wow. Yeah. Jared Flinn: The the logo on the tire all has to be in the same position. The valve stems have to be in the same position. Like they white, you know, the white glove underneath the, the chassis to see if there's any dust, but, like, crazy, you know? So I I would say to win those to win a truck show is quite the feat. Tyler Allison: Yeah. And I actually got to witness some of that, show truck judging whenever we were out there. We were sitting with the, Hamas Trucking, their bulk loads members. They had a couple of show trucks there, but we were sitting there visiting with them. And the judges came by, and they were, like, crawling under the trailers, like, clicking up. And I guess, yeah, it shocked me at just how detail oriented those guys like these are like older men, you know, 60, 70s, and they're crawling under the trucks, you know, touching everything. But yeah, I agree. It's definitely a proud moment to win one of those shows. Jared Flinn: We'll move on with this conversation, but, like, the truck with the low profile tires, like, I don't get that. Like, maybe I'm just old school, but, like, they had this truck. I mean, it didn't the it had to be, like, just a couple inches profile. Like, how is that thing? And I don't think that thing was driven there. It could've been, so I apologize if it was, but, like, it, I guess there's a truck for everybody out there. Tyler Allison: Yeah. There's so many variants out there too of just and it's cool to see the way people customize differently. Jared Flinn: Yeah. Speaking of trucks, we wanna do a truck feature next week. Tyler Allison: This one will be Scott Carroll, with White Mountain Trucking. He's been a member since November of 2023. So pretty recent here. He's actually working with our TMS team to get onboarded on TMS. So, Scott, we thank you for being a member and checking out our other services. He's got a pretty cool truck up there, green and black. He also does They Jared Flinn: run Tyler Allison: about the walking floors. Right? I think 12 walking floors. So Jared Flinn: Yeah. Super cool. Yeah. Awesome. Well, we're gonna get to the show. This week's guest, we are bringing on Matthew Leffler. He is the arm chair attorney. I'm telling you guys, you do not wanna tune out of this one. Jared Flinn: This one is going to get you on the edge of your seats with excitement and, like, I'm gonna try to get this guy on more often. Like, he was phenomenal. Speaks well, but just the knowledge he knows in trucking is amazing. Tyler Allison: Yeah. I was checking out his he's got a YouTube channel, armchair attorney, and he just brings he I think he I don't know if he has a podcast on his own, but they he brings on some different people, and they just go over different legal questions within businesses. So we'll link that below so you can check that out as well. But, yeah, the dude just looks like a wealth of knowledge. Jared Flinn: Yeah. He grew up in trucking. He talked about that, dad being in trucking. He run he works for a company where they lease over 18,000 trailers more in general freights. So the guy knows what he's talking about, And, this is this is gonna be a cool one. So with that said, here is my conversation with Matthew Leffler with the armchair attorney. Hey, Matthew. Thanks for coming on. Matthew Leffler: I'm so excited to be here. Thank you for having me. I'm excited to talk about this amazing business that no one can actually escape once they get into it. Jared Flinn: That's right. Well, I wanna know who who is the armchair attorney, and where did that come from, that name? Matthew Leffler: That's a really good question. I began with looking to see if the website was taken, and it wasn't. So I I I bought the website armchair attorney.com. And once I built the website, then I incorporate the LLC, and then I file a trademark for it. So I I have a trademark for armchair attorney. It's kind of the name for my initial podcast that I put together, but it also is the standalone for my law firm that I it's kinda like a a hobby that I've had for the last decade or so. I I just like alliteration. Jared Flinn: Okay. I was just like, why armchair? Because I at first, like, I don't know why in my mind I was thinking, is it, like, armchair wheelchair? Like, is he is there a handicap? And then Jared Flinn: I started looking at social media pictures. Jared Flinn: Like, no. You're fine. But Matthew Leffler: Yeah. Well, then there's, like, arm chair expert, armchair historians. And I I am a general counsel. I've done a lot of, legal work in my career, but most of my days is really not really focused on law. I I follow everything in our industry because I'm passionate about it, but I use it more as an educational tool. How can I explain really complicated topics that impact our industry and make them digestible for someone who's not an attorney? Jared Flinn: Okay. You've been in logistics your whole life, though. You're talking I was reading a little bit of your bio. Your your dad was or is or wasn't logistics. You've grown up with your whole life. Talk about that a little bit. Matthew Leffler: So, it goes back 3 generations. So my grandfather was a tank commander in World War 2. He was a mechanical guy in the tanks. And after he got home from World War 2, he opened up his own grain hauling business. And he had 6 power units he was operating, hauling grain in Central Illinois. And then he got polio, and he lost the ability to walk. He was hospitalized for 6 months, and he went bankrupt. That was the end of his kind of story as a trucking company. Matthew Leffler: He became a mechanic, though, because he could still work on equipment. And that's how my father got involved with it. And the story of my dad was in 1976, he graduated from Northern Illinois University and got his first job in transportation as a night supervisor for Roadway. And before 1980, there were 3 trucking companies that moved the earth, and that was Roadway, Yellow, and Consolidated Freightways. And now all 3 of those companies are gone, but their legacy lives on. So dad was a roadway guy for 15 years, then he spent time at Airborne, which later on was bought by DHL. But his real claim to fame was in 1991, there was this new trend around outsourcing maintenance, and a company called RPS, Roadway Package System, reached out to him and said, hey. We're trying to make a nonunion version of, UPS. Matthew Leffler: And he became the largest maintenance provider for RPS, which later became Caliber, which later became FedEx Ground. So I have lived this industry. I was 7 years old when my father started his company. And all I knew about transportation back then was it meant that dad was gone at least 50% of the year. That's what transportation meant to me. And it wasn't until I I got out of law school and I did private practice, but I went and worked for him in house as a general counsel that I got to really get to know him. And so transportation is not something that I I find myself, like, voluntarily going into. I I intentionally tried not to do it, but you can't opt out of supply chain. Matthew Leffler: And now that I've been in the business for over 15 years, I would never wanna do anything different. Jared Flinn: That's, yeah. My audience has heard my story, but it's very similar. It was something like I was in growing up and, like, wanted the furthest away from it and then found myself back into it. I'm sure many people can relate to that. Talk about the trailer guy too. What is the trailer guy? Matthew Leffler: Well, so I I I am a trailer guy. So, like, the story about my career in supply chain is helping people with problems that revolve around trailers. So looking at FedEx Ground, they owned a ton of trailers. They owned some dollies. Everything else was independent contractors. The the the drivers for the delivery trucks, the the home guys coming to your house with the FedEx Ground logo, they're all contractors. And so my business was helping people solve trailer problems, helping maintain trailers. But as time has gone on, I've been in software around trailers. Matthew Leffler: I have been in, asset sharing platforms for trailers. Right now, my current role is the VP of strategic accounts for a a trailer leasing company called Contract Leasing Corporation. Our fleet is 18,000 trailers strong. So if people are looking for trailers or wanna understand, how do you maintain them? How do you spec them? How do you move them? I'm a trailer guy. Like, tell me your problems. And if it and if it's something that a truck pulls, I can probably help you with it. Jared Flinn: 18,000 trailer or vans, reefer, all of the above? Or Matthew Leffler: Been at everything. So the vast majority of our fleet is very similar to the the makeup of trailers in the in our country. Most of it is 53 foot drive vans with swing doors, you know, full truckload stuff. We do have a fleet of temperature control. We have a fleet of flatbeds. We have a a a growing fleet of intermodal and marine chassis. So if we think of, like, that box that comes off that boat gets put onto a piece of equipment, we might be supplying that. We have over 3,000 chassis across North America. Matthew Leffler: So it is it's a problem that people don't think about. They think everything's about the power. Everything's about the truck. But it's what's in that trailer that every consumer and every manufacturer and every receiver truly cares about. Where is my stuff? It's inside that box. Jared Flinn: That's so good. I think about even the, the rail system. A lot of people don't realize most rail cars are not owned by the railroad. Matthew Leffler: That's right. Jared Flinn: They're owned by different private equity groups or different groups. But, yeah, it's just I didn't realize there's such a large group of trailers in the same category. Matthew Leffler: Yeah. There's there's over 5,000,000 trailers in the United States, and, about maybe 4 12 to 14% of those trailers are owned by the leasing companies. The world of chassis is even more bonkers. There are 3 companies that own 80% of all of the chassis in the United States. Those companies are Direct Chassis Link, which is called DCLI. There's Trac, and there's Flexivan. So, like, this this business about who owns the box, that is a very complicated question because there's a lot of private equity, a lot of, you know, just generally publicly traded companies that own these trailers. Like, one of my biggest competitors is Extra Lease. Matthew Leffler: They're owned by Berkshire Hathaway. Like Yep. The reality of who owns these companies, it's it's fascinating. That's why I love trailers. I love helping people find them, sell them, maintain them, to outfit them, upfit them. I love it. I love those beautiful boxes. Jared Flinn: We're gonna move on to this, but just one last question on the trailers. Who is your your customer on that? I mean, I know it could be all of the above, but, like, is it a, a fleet of a couple hundred, you know, trucks, and then all of a sudden they got a big account where they're gonna need extra trailers. So instead of buying them, they're leasing them, or like, talk us through who who is consuming or using these trailers. Matthew Leffler: Everybody needs trailers. So the way I look at it is my biggest competitor is ownership. Like, there's other competitors, but, really, it's about people who wanna own it. And if you know how to maintain it and license it and register it and tie it and all that good stuff, go have fun. Some people don't wanna do that, though. So my customers tend to be people like, for, higher motor carriers. They may be private motor carriers, like manufacturers that have their own, fleets. They could be brokerages. Matthew Leffler: So we really do find a lot of people who have needs for the equipment. I work with some ports like the Port of Virginia. We we have chassis with them. Our smallest deals we typically do might be 2 to 4 trailers. Our biggest deals might be a 1,000. It just depends on the nature of the customer and what their appetite is. What I'm so proud about being able to deliver is someone can come to me and say, I need a 100 trailers in this city in 90 days. Can you help me? Absolutely. Matthew Leffler: Give me the most complicated problem you can find, and I will help build a solution to give you well maintained quality trailers that can help you safely deliver freight on time and undamaged. Jared Flinn: Wow. That's cool. That's a whole another podcast I'm thinking of that we can that we can set around, but that's not today's. We're gonna talk, and you I was gonna say it was a perfect segue. You're talking about FedEx and independent contractors. I was like, oh, this is gonna this is gonna segue right into what we wanna talk about. But the hard I wanna talk about, this is gonna be all things legal, but we're gonna talk about kind of independent contractors. Yeah. Jared Flinn: Hey, guys. We're gonna take a quick break because I have one question for you. Do you hate dealing with the DMV and the FMCSA and all the detailed paperwork to run your business. I do for my business, and that's why we have started bulk permitting. If you haven't seen yet, we have announced it on our website and sent out some newsletters. We've announced it on the podcast, but now we offer a full solution for new authorities to get you registered for regular compliance, quarterly IFTA's, regular heavy duty taxes, all that stuff that quite frankly I don't like doing, but we have found a team of experts to help you and navigate you through those processes. I don't like dealing with all the back end paperwork. You know, I found my god gift and ability is starting businesses, thinking creativity, running the businesses, having new ideas, working with people, and I know a lot of you all have that same gift as well. Jared Flinn: So check out bulk permitting. We wanna help you out with all those details. Contact us on bulk loads or you'll see a tab for bulk loads permitting. And, yeah, let us take that load off your lap. We can help you out in so many ways. Check out bulk permitting on the website or contact us anytime. God bless. Jared Flinn: The I wanna give you one situation, and we're gonna see kinda how this ping pongs around and and move about that. But the heart of reaching out to you was what we see on our end, bulk loads. You know, you get a company driver out there. They wanna become an independent. They wanna get their own authority or they wanna own their own truck and then run under somebody else's authority. But not always, but we've seen some of these instances where they get leased on to maybe a larger company, and then they're really handcuffed at that at that point. And then really at the end of the week, that, that driver's out there working every day, 10 hours a day for very little. I mean, sometimes I hear these guys I mean, at the end of the week, their take home is maybe $250. Jared Flinn: I mean, less a minimum wage. But let's let's just jump in and kind of talk on that aspect of loan. And I guess more importantly, I wanna get to be like, hey. For guys listening to this podcast, maybe getting into this, what can they look out for or watch out for before entering into some of these contracts? Matthew Leffler: Yeah. Absolutely. What I'd like to do is as we kind of tee this question up is, we don't know where we're going unless we know where we are. And you can't know where you are unless you know where you've come from. So I wanna start off by talking about deregulation in 1980 because that is the that is the the number one issue that has affected everybody and why we see the rise and all these, you know, different relationships with independent contractors, lease on, lease purchase, all these different things. In 1980, 60% of all truck drivers were unionized. Their take home pay, was about $38,000 a year. If you adjust that for inflation, it's about $110,000 a year. Matthew Leffler: If you look at it today, is it like that? Of course, it's not Jared Flinn: at all. Matthew Leffler: The drivers are making maybe 50,000 a year after taxes in some cases. Unionization is basically gone. They're still ABF. They're still around owned by ArcBest. UPS Freight was bought by t, TFI, so that's T Force now. But the the world that we saw before deregulation has changed. And why deregulation took place was Jimmy Carter thought he could save $8,000,000,000 a year in transportation costs. And they did. Matthew Leffler: They did. That savings comes off the backs of truck drivers. It comes off the backs of forklift operators, material handlers, and mechanics. So that is, like, the background of when that day happened in 1980. There was maybe 15, 16,000 motor carriers. Fast forward today, it's 100 of 1,000. We're seeing thousands of motor carriers every month leaving the business because what we wanted to have happen was to make it so you could still control somebody as if they were an employee, but not have to pay the benefits, the wage an hour, the, overtime, the meal periods, the the 15 minute break. They didn't wanna do that. Matthew Leffler: And in order to achieve that goal, they had to make these new relationships. And FedEx Ground is probably the best example of a a trucking company that decided to have everybody as an owner operator. And you would basically have the same people come into your house. Those are contractors. They don't work for FedEx. And they may lease the equipment through some division. Like, maybe Amazon has the same kind of program. But that's the nature of what's what's behind all of this is that deregulation made the explosion of different types of motor carriers and different types of relationships, and it causes all sorts of problems if you don't do it right. Jared Flinn: Yeah. So, I mean, keep going there. So what's happened is and and I'm I'm not talking about well, there are some companies, but, I mean, they figured out ways, to leverage themselves or basically have the advantage over truck drivers or these independents. Yeah. Give them an agreement that in turns favors them, but doesn't make it very favorable to the actual Matthew Leffler: Yeah. This this is a really big challenge. These organizations let's just forget about the truck driving schools because there's a lot of challenges I have with the truck driving schools. But you wanna be a business owner, and you come to a motor carrier and say, I wanna I wanna I wanna be a business owner. The old days, you couldn't do that. You'd have to be part of a w two as a driver. You weren't able to do this idea for your own business. But it's kind of like this idea where you're not truly independent. Matthew Leffler: You're gonna get access to a piece of equipment that you couldn't finance yourself. A modern truck is like a $150,000. It could be a lot of money. I mean, look at the heavy wreckers. Those are $800,000. So it's an expensive undertaking. So you get access to a piece of equipment. It may or may not be new, and you're gonna make payments on that piece of equipment to the company that owns it. Matthew Leffler: And during that period of time, you are kind of like a dedicated motor carrier for that client. And this relationship, I don't wanna call it indentured servitude because that's not an appropriate thing because indentured servitude is a very specific thing that we had in America. But it's the closest thing you're gonna find in our industry, which is to bring a driver in, promise them they'll make a lot of money, They get signed up, and then they are stuck. And if they leave, not only do they lose all those lease payments because it basically, you're just paying rent on a truck. You bring it back, and that's it, and you're done. So there's options in these lease agreements where sometimes you can purchase a truck at the end. There's sometimes you don't, and you just basically give it back like you lease a car. But they're relationships that are designed to do one specific thing, which is to reduce risk for the actual motor carrier. Matthew Leffler: They do not want you to be a w 2. They make you think that you don't wanna be a w 2 either, and they classify you in a certain way, and then you have this relationship. And if it doesn't go well, you get fired and you have no recourse. There's no unemployment for an independent contractor. There's no, workers' compensation for an independent contractor. And then if you look at our industry as a whole, we vilify regulations minimum and have the ability to throw you away when they're done with you. And that's really what the lease agreements are designed to do. Now they are certainly a good path to to get to a place where you can own your own truck and have your own business, but it comes at a cost, and very few people truly understand what that cost is. Jared Flinn: Yeah. You said it right in the beginning, but I think number 1, it's a way for someone without cash to say, hey, we're gonna we're gonna pay for this $150, 200,000 rig truck for you to drive. You're gonna make payments back to us. But if you don't like it or wanna stop anytime, you know, you basically made all these payments, but we own the truck at the end of Matthew Leffler: the day. And sometimes those contracts will even prohibit you from taking loads from competitors of the motor carrier. Now there are cases when if, like, you own your truck already, you can lease your truck to a motor carrier, and you can drive as a contractor for the motor carrier that you leased your truck to. So there are these these ways that that there is flexibility in these relationships. But some companies have put it put in prohibition, say, you're an independent contractor. Absolutely. But you can't work with this company or this company or this company. And simply by doing that, you have made that person into an employee, and you don't know that until that person sues you. Matthew Leffler: And they win. And then you go, oh, my gosh. What was I thinking? And that's one of the big risk factors that big enterprise motor carriers have when they put in covenants or restrictions on who you can work for. If you're borrowing the truck from them, they certainly can do that. But if again, like, it's a very strange relationship of being a creditor to your employee, essentially. Jared Flinn: Yeah. Well, as we're we're recording this, this is gonna be released later, though, but there's just a new law that went into effect. Right? Isn't that I mean, the one that that happened today with the independent contractor, is there does that have anything to do, or will it impact this at all? Matthew Leffler: So the Department of Labor put out a rule not too long ago, and that's, I think, what you might be referring to. It has to do with this thing called the economic realities test. So this is, and I'm there's a lot in this space. What I'll be very quick to say is I'm not giving anybody legal advice. I'm not offering legal services. Don't take legal advice from a podcast. But the way that we think about a contractor or an employee is different than many people expect. Most people think of a contractor and a hiring entity as those both those parties agree to it, and that's all that matters. Matthew Leffler: That's not the case. That is not the case at all. I like to use the example of, the dwarf planet Pluto. For the people who are listening in, Pluto used to be a planet. When I was a kid, Pluto was a planet. Yeah. And then it's strange. And we're like, why did it change? They changed the test. Matthew Leffler: The test for becoming a planet was a couple of things. One was a thing called hydrostatic equilibrium, a sphere, like the object had to be a sphere, and it had to clear its orbital path. And what that means is other debris can't be around it. It has to knock the debris away. Pluto has a moon called Charon or Charon, and it's, you know, almost the same size. So that definition changed what a planet meant. That is exactly how it works with the law as it relates to contractors. So the big boogeyman that everyone's been thinking about is California's AB 5. Matthew Leffler: AB 5 is the presumption that anybody is an employee, and it's up to the business to prove they're a contractor. And they have a 3 pronged test. And if you fail any prong of the test, oh, you're an employee. That's why so many motor cares have been so scared about going into California because their people, by magical power of crossing a border, become employees as opposed to contractors. And what does that mean for a business? What it means for a business, if you misclassify, number 1, that litigation can be anywhere from 20 to $50,000 a month. A month. There is no insurance policy you can buy that allows the insurance company to pay on your behalf. That is all out of your pocket. Matthew Leffler: That's what you're giving away. And when you put those two things together, the fact that it's uninsured, it's very expensive. And they also have a thing called fee shifting, which means if the person suing wins, you have to pay their fees. So it is what we call bet the farm litigation. You lose that, you might go out of business. On the other side is another test. That's called the economic realities test. It is a 6 pronged test with a 7th additional prong. Matthew Leffler: We're not gonna go out all the prongs. But suffice it to say, in the economic realities test, if you're making lease payments, we say that looks like a business. So we are more apt in that method to say an independent contractor remains a contractor. But the important thing to note on both of these tests is it's not about what you think you are. We don't care what you think you are. We say, what are the facts of the relationship, and how do those facts of the relationship apply to the test we use? The economic realities test has been the predominant test for for classification in the federal system for decades. It is not a new test. And when that test became the official policy of the Department of Labor not too long ago, some people were like, this is the end of the world. Matthew Leffler: But every lawyer that I know who practices in employment litigation was like, this is nothing. This is nothing special. People getting upset should just kind of be quiet because they don't know what they're talking about. But that's the those are the the biggest, like, things that are happening with the classification of workers. There's a lot of gig company stuff we can get into, but that's what's really at stake with these tests. And the Department of Labor's newest test is the old test. So the king is dead. Long live the king. Jared Flinn: So just to circle back because I always wanna kinda get a takeaway, our practical, outlook. If we do have a carrier listening to this or potentially he's looking at getting into a lease agreement, What should they do before signing the dotted line? Matthew Leffler: I would say you should always get a counsel. A lawyer will give you an initial consultation for free, usually 30 minutes to an hour. But to look at a standard lease agreement like you've outlined, people see every day, that's probably an hour charge. That might be $500, maybe $1,000 at the most. You we all understand the value of preventatively maintaining your truck. Like, we know why it's important to change the oil and inspect it for for any wear and tear that might be when it might result in an unplanned event. You do the same thing with your contracts. So if you don't have a lawyer that's already you've already worked with, you can go to your your county you live in in the Chamber of Commerce. Matthew Leffler: Every county has a bar association. Lawyers are very busy. We all it's all a CAC business. But generally speaking, that's the the first thing to do. Now what I also would caution anybody is if you really wanna get into the, you know, trucking industry and there's a lot of good reasons to do it and also a lot of bad reasons to do it. There's nothing wrong with being a company driver. To take on a piece of equipment that's owned by somebody else, that's maintained by the fleet, and your job is to be a professional driver. And you get good at driving. Matthew Leffler: Then you can figure out, do I want to be in substantial debt to become a business owner? The the biggest challenge with being an owner operator, and we talked about this before we went live, there's no money in this business. Not right now. There's not. And you need to have like, even if you're at least on driver, you need to have maintenance account. Maybe 15¢ or or 10¢ at least per mile to be pulled out of your money, cost to a bank account only for maintenance. And if you don't do that, you are setting yourself up to fail. So it's very important to really understand what are table stakes and what can you get away with and still get to practice the craft of being a driver. So that was my advice typically. Matthew Leffler: I I very skeptical of leasing on to a motor carrier. Knowing how the relationships work, knowing how the programs are designed, it's if you can be a company driver, that's basically the same thing as being leased on. And if you like it, you keep doing it. If you don't, you'll do something different. Jared Flinn: Yeah. Love it. Well, before I Jared Flinn: let you go, there's a Jared Flinn: couple, things going on right now in the industry that you'd kinda brought up, and I wanna kinda bring these out because I think these are pretty interesting. Talk about the the Warner lawsuit going on right now in Texas. Matthew Leffler: This is the very most important litigation in the industry right now is happening in Texas. The story is horrifying, but no one is disputing the facts. A driver for Werner was operating a truck and trailer with a safety driver trainer in the back of sleep in a bad weather situation. It was snowing. The driver was going 10 miles an hour slower than the posted speed limit. Another vehicle, pickup truck, in the opposite direction across a 10 yard median hits a patch of black ice, spins out, crosses the center line, and collides with the Werner truck head on. 1 child dies, and one child receives critical injuries to their brain. And the question we ask is, who's liable? Who's at fault? Now most of the viewers and listeners would probably think, well, it sounds like the driver for Werner was going under the posted speed limit. Matthew Leffler: They never lost control of the asset. They were well maintained assets. And how in the world could Werner be held responsible? Tyler Allison: Well, Matthew Leffler: here it happened. The driver for the pickup truck was found to be 16% at fault. That's the person who lost control, driving too fast for conditions, and crossed the center line. The driver for Werner the driver for Werner was held to be 14% responsible, 14. That leaves 70%. Werner was found liable for 70% of that. Now in every jurisdiction across the country, for the most part, we follow a thing called joint and several liability, which means if one of you is responsible or all of you have some responsibility, one person will be held accountable for all of it. Werner was found to be liable to the tune of $90,000,000. Matthew Leffler: They appealed that to the appellate court, and the appellate court said, no. You're still you're still at fault. That became a judgment with interest of a $130,000,000. Now it's on appeal to the Texas Supreme Court. And I can tell by looking at you, it's like, what are you how is this possible? We're all asking that same question. Werner is self insured for the first $10,000,000. Above that, it's all an umbrella policy. Jared Flinn: Yep. Matthew Leffler: But it could be any driver on that highway who is not doing anything illegal, anything dangerous, and could be found liable for that kind of catastrophic injury. That is bonkers. That is not fair. That is not justice, but that is where we find ourselves because everybody's underinsured. And if you see the big old 53 foot trailer with a big old decal on it, you know they probably have the money. And that case is going on right now. We don't know the answer to it. We don't we don't know what's gonna happen, but it's something that we should all be aware of. Jared Flinn: Yeah. I I guess my my only feedback to that is horrible. I mean, I it's just horrific. You can't even imagine, I mean, any kind of fatality like that, and especially a child. I have children. I think I saw that you have children and your father. But and I mean, just it's hard to fathom like that. But at the same time, like, was enough enough? I mean, like, he didn't even cross the lane. Jared Flinn: And then we don't need to go into the details of the case, but I don't even see how there was even liability at all. Like, I think I read that case because it happened several years ago Yeah. And I haven't seen the latest on it. But, like, yeah, there was something along, like, they the driver shouldn't have been driving in rain or something like that. Like, the truck driver Matthew Leffler: The the story the the real story is actually a lot of young drivers would know this. Many motor carriers take an approach where training a driver is an exercise in team driving. And so if you're running a program that appears to be training but in reality is team driving, what the litigators are gonna look at you and go they're gonna say, that's the pattern and practice of your company. It doesn't matter that this guy had a bad day. You guys know this is dangerous. You know that it so because this driver who was for Werner had only been driving for 7 days. 7 days. Never trained to drive in snow, but, again, he didn't lose control. Matthew Leffler: He never went above the posted speed limit. But this is the nebulous world we live in. So when we're all asking ourselves, why are our insurance rates so high? It's because of verdicts like that. Because how in the world would any insurance company mitigate that risk if you can't predict what other people do? It's bananas. It's absolutely bananas. Jared Flinn: Yeah. That's crazy. The other one I wanted to talk about was, talk about brokers being liable if a driver is in a wreck. Matthew Leffler: Yes. So this is another really important issue we have in the supply chain. So there's this act, we call f 4 a, but it's a it's a regulation about brokers. And brokers are responsible for, route price and service. That's what they that's what they agree to do. But sometimes, a broker hires somebody who's just dangerous as a motor carrier. And if you don't vet the carrier enough and that carrier has some catastrophic thing happen, can you, the broker, be held responsible? And the answer is, it depends. In a case in the 9th Circuit Court of Appeals, that's California, Washington, and Oregon, there was a case called c h Robinson v Miller or Robinson versus Miller versus c h Robinson. Matthew Leffler: And in that case, very similar to the to the Texas case, driver loses control, kills somebody. They sue the driver. His insurance is $750,000, which is the minimum required by the law, and they went after the broker. It's a broker. You should've known. This guy was dangerous. And they went to the the 9th circuit, and the 9th circuit said, you, the broker, can be held responsible for not hiring the right driver. And that's okay. Matthew Leffler: That's interesting. The exact same set of facts happened in Illinois in the 7th Circuit Court of Appeals. That's Illinois, Indiana, Wisconsin. And same thing, Global Trans versus Yi is the case. And someone dies, some cashback thing happens, you sue the broker. And in the in the 7th Circuit, the court says, no. You can't hold the broker responsible. All the broker did was find the load and then gave it to the driver. Matthew Leffler: The driver is the one who made the mistake. It's not the broker's fault. And in that case, the broker was found not to be liable. So both of those cases got appealed to the the United States Supreme Court. We call that SCOTUS. And SCOTUS was like, no. We don't care. That's not a big enough issue. Matthew Leffler: Because in the Supreme Court of United States, they don't have to take a case. It's just discretionary. So right now in this country, you have different circuits that say you could or could not be held responsible. So imagine that same Werner case, but instead of it's Werner, it's a small motor carrier and a big broker. Same thing can happen. $100,000,000 right on your doorstep. So if you're a broker and you're not following nuclear verdicts, you're making a very big mistake. Jared Flinn: Wow. Yeah. Scary. The the last one before I let you go, Matt, I want you to kinda give your take on, you know, double broking has been huge, past couple years, and, different companies are taking different measures. We are at bulk loads to try to prevent, any double broken activities. But what's and, like, give us kind of your high level view on this and how this is kind of moving along and maybe potentially how this will shake out. Matthew Leffler: Yeah. I I I my my opinion on double brokering is a little bit less exciting than most people. We're governed by the FMCSA, the Federal Motor Care Safety Administration. Safety is the is the thing. It's not about fraud prevention. It's not about double brokering. So the regulators really don't take a strong stance on this opinion of double brokering. It goes back to the simple thing about a business is know who you're doing business with. Matthew Leffler: Whether it's a motor carrier or it's a shipper or it's a broker, you wanna have relationships. If you're a broker and you're just going for the cheapest rate you can find, yeah, there's gonna be problems. The technology that's out here today, I think of things like Carrier Assure or Highway or a whole bunch of other things. It's it's to really spend the time. Make the phone call. Listen to their voice. Ask them for the the truck number, the driver's cell phone number. Like, there's more you can do internally than to look at the regulators and say, regulators, we need you to step up. Matthew Leffler: I, generally speaking, do not want more regulation. There are certain things I'd love to see more regulation around. But for the double brokering space, it it becomes an exercise of being more mindful of who you work with. And if you do find yourself on the other side of a double brokering thing, report the fraud. FBI is actively trying to go after double brokers. But the challenge is you noticed too. These people who are committing these crimes are on the other side of the planet. Jared Flinn: That's right. Matthew Leffler: There's nothing you can do. Like, we have incentivized companies to do business offshore. That's how manufacturing work, and that's how brokering work today. So the the reality is I I think you have to make a process, stick to the process. And if someone tells you not to stick to the process, stick to the process. That's all you gotta do. And, hopefully, that's enough. But we're still always in in these bad markets, you will always find criminality involved in way very sophisticated ways. Jared Flinn: I could be wrong, but I think too that happened more when we had a high level of loads. I mean, shippers are at the mercy, hire whoever, just get them moved, you know, tight side supply chains. Now we're at a level real low. So, I mean, I think people are taking measures, but I I don't know. Or at least I haven't heard, as much activity as we did, especially last summer and some of the prior months when it was busy. So Yeah. Matthew Leffler: I mean, cargoes have to still minor compared to retail theft. Like, the amount of shrink that retailers feel every single year is substantially more than what happens when a trailer gets broken into or moved to some other place. Like, theft has always been a part of this business since the business began. So if you're a brokerage, the things I always recommend, talk to your insurance adjusters, talk to your insurers to make sure you have the best in class practices. The insurance companies know how to mitigate these things, and they're happy to help you because they don't wanna pay claims either. So there's incentives for, you know, those stakeholders to help you. But, really, it's it's about knowing your carrier base, and it's about knowing who you're working with. Jared Flinn: Yeah. Man, I've thoroughly enjoyed this, man. I only wish I would have known you earlier. I probably would have been hitting you up for more of these, and I'm sure maybe we'll be doing more. You're active on social media. You put out a lot of awesome content. Where do people find you? Matthew Leffler: You can find me in a couple different places. LinkedIn is probably the most prolific. T t y is the abbreviation for the word attorney. And I'm kind of all around. I have a podcast called Pleading Conversations. So if people are looking for information about supply chain, law, compliance, or trailers, you can reach out. Jared Flinn: Awesome, Matt. Thanks for oh, I was gonna Jared Flinn: ask you. Are you gonna be at, upcoming Matt's? Matthew Leffler: No. I will not be there. I did manifest. I did the American Trucking Association Technology Maintenance Council, and I am still trying to recover from whatever bug I picked up. So I am I'm done for travel. Are you guys gonna be out there? Jared Flinn: Yeah. We are. We're, we're super excited and looking forward to it. It's, it's a a sea of owner operators. It's an awesome place Matthew Leffler: to be. Jared Flinn: Yeah. I always I joke. I tell, when I leave the house, I tell my wife, I'm like, I'm going to be with my people, like thousands. Matthew Leffler: So Let me ask you this. At what point in your career did you realize that you can't get out of supply chain? Jared Flinn: Oh, I might have to think about that a little bit. But, I I for me, it was just in my in my mid twenties. I fell into it and and just fell in love with it, quite frankly. And I I guess for me, it was really seeing, I come from small, humble beginnings, but really seeing people struggle day to day. And I thought, man, if I could make a difference in the lives of these, we could have a greater impact for this industry. So, that's, that's what fuels my fire every day. So, man but I appreciate you asking. Tyler Allison: So Thank Matthew Leffler: you for having the program. Anytime you just wanna talk about things like noncompetition agreements or other nonsensical things in this business, I love it. I love the lawn. I love helping people understand it. Jared Flinn: Cool. Matt, thanks again for coming on. Matthew Leffler: Thank you, sir. Jared Flinn: Tyler, I like how Matt talked about deregulation. We always hear it from the old timers Tyler Allison: Yeah. Jared Flinn: About how deregulation changed. But Matt really broke it down on how deregulation set forth how the trucking industry runs today. And I thought it was fascinating. I never heard until Matt talked about how Jimmy Carter pushed for deregulation to save $8,000,000,000 in transportation costs. And if you think about it, that $8,000,000,000, according to him, has come off the backs of trucking and trucking professionals. Yeah. Tyler Allison: Yeah. He's had he had a few different phrases in there too that to kinda describe that. But, yeah, it's sad. Jared Flinn: I mean, I laugh, but it's it's actually very sad. Tyler Allison: Yeah. Yeah. It really is. Yeah. And it just shows, I mean, what this industry, I mean, stands for today. But Matthew really brought a lot of knowledge to the show, so I'm glad he was came on. He's been on, like, What the Truck and Freightwaves and a couple different He's Jared Flinn: super connected with them. Yeah. He, and I guess I'll say this. I think there's some stuff in this podcast that'll get people fired up, but, man, you have to be knowledgeable. You have to know where you came from, why things are a good day, and how to make those. And I really wanna shed some light on that to really talk about, owner operators, independence, and how that works today. And I think things can be changed, and I don't think this is a one size fits all. I don't think everybody's in this bucket, but we do see more and more of this today. Jared Flinn: Yep. And we wanna bring that to the light and see how we can make it better for trucking companies. Our heart and passion is for the small guys. It will always be that way. We wanna help everybody in this industry, but we all come from humble small roots, and that's what we wanna do, to the industry. Yeah. Tyler Allison: That's a good point. Jared Flinn: So cool. Well, before we close out of here and thank you, Matt, by the way, for coming on the show. Our conference is coming right up. Tyler Allison: We got Jared Flinn: Matt's behind us, so we are focused laser focused on the Bolt Freight Conference. If you haven't got your tickets yet, make sure and get them. Again, you're not gonna wanna miss this. We're getting pretty close. I mean, we're I mean, as far as getting sold out on Tyler Allison: today. Jared Flinn: So Yeah. Tyler Allison: So, yeah, get your tickets today. Bookfreightconference.com. You can you can buy them right there. Right now, we're nailing down all the panel topics and, you know, who's gonna be speaking and stuff, and then we've got some really good stuff going on. So I'm excited for it. There will be a couple stressful weeks leading up, but it'll be a lot of fun. It'll be great. And I think, there's gonna be a lot of value given at this conference. Jared Flinn: I think a lot I've had people ask about, like, they've looked at the agenda, and you can go to the bookfreightconference.com and check that out. And this year, we're really not focusing it on, you know, bigs name speakers or anything like that because that's what we don't we don't want people to come into that. We want people to come in number 1 to network Yeah. With others in the industry. And even if that's your number one purpose or that's the only thing accomplished, I think that's gonna be huge value for your business. And then number 2, discussion panels is what we're really focused on because we want interacting. When people you know, last year, we had some speakers and they were all great, but I noticed some people were tuning out. They were looking on their phones. Jared Flinn: But, man, if you got a good panel up there that's asking questions, got audience interactive, That's what's really gonna move the needle. That's where we're gonna get a lot of good insight and hopefully bring take away things that we can benefit our Tyler Allison: Get your tickets. Bulkfreightconference.com. We'll also link it in the description below. Jared Flinn: Yeah. And if you have any questions about accommodations, where to stay, what else to do, if you wanna bring your family there, we can help you call us, email us, and we can we can set you up. We talked to quite a few people at Matt's that were coming, and they were, some were bringing their families as well. And, I think that's just a perfect thing to kill 2 birds with 1 stone. Yeah. Exactly. Awesome. Also permitting. Jared Flinn: We wanna keep bringing that up. That's kind of our new venture we'd launched out. It has been rocking and rolling. Yeah. Tanner is, I guess I'm just impressed with the plethora of people coming through, but I didn't realize how big of a need that was. So, yeah, we started bulk permitting, which it's a full permitting shop, so we do brand new authorities, quarterly filings of IFTA's, your heavy duty tax, anything compliance regulatory wise, DMV, FMCSA, all that stuff. Again, I'll say over and over, I don't like doing I don't do it for my own personal self. I I even here at BullClothes, we I have people that do that for me. Jared Flinn: I cannot stand it, and and I know there's a lot of other people out there the same. So contact us. What's the best way? Tyler Allison: If you just call in, you can call in 800-518-9240, or you can email support at bulkloads.com. You can also go to the permitting tab on the website and submit a form there. If does or come due April 30th, Q1, IFTA's. So if you don't wanna do it, if you think it's headache like we do, let us know. We'll handle all that. One thing I gotta say is, like, you gotta you gotta factor in how much your time is worth to. Mhmm. And whenever you're, if you're doing them yourself and, you know, it's taking time away from your truck and you're having to do them at night, look into having us do them for you. Tyler Allison: We'd love to take it out for you. So, yeah, check us out. I think the way Jared Flinn: I look at it, a lot of the things that I subcontract out or have people do for me, I replace that with things that I'm doing to grow myself. So it's not like I'm taking stuff off the plate just because I don't like it and I can relax. But when I have people do these tasks that I don't like to do, number 1, I'm realizing it's not my skill set. But number 2, it's allowing me to focus on the things that I really love to do and what really can help grow Tyler Allison: Yeah. Jared Flinn: Our business and my Yep. So awesome. So, the last last thing I'm gonna leave you with before we close out, it's a little bit of a story, but I, I was at church last Sunday. My wife and I, we serve on the welcome team. So when people are coming up, to church, whether it's new visitors Yep. Returning guests. And we, actually, one of the serve pastors came up, and we're gonna start he wanted us to start doing prayers for people as they leave because some people, they don't like going up to the altar call and all that. And, again, this is a little bit out of my comfort zone. Jared Flinn: But what I thought was interesting, he told me this that statistics show that 1 in every 15 people you meet are in a crisis. Tyler Allison: Like, in Jared Flinn: a deep crisis, whether they're going through something divorce, child, parent, disease, name it. But, like Wow. I thought that was staggering. So just think about that, like, when you interact today with someone, one out of every 15 people that you're gonna meet today, you know, whether it's someone at the coffee shop, the truck stop, the grain elevator, Wherever you're going, there's gonna be through a crisis or you're interacting on the phone with. Yeah. Out of all the phone calls, you're talking 1 in 15. So put that in perspective. And I guess one favor I would ask for you is don't be afraid to ask someone if you can pray for them. Tyler Allison: Yeah. Jared Flinn: Don't be afraid when you're out there on the road, 1 of our 15 people say, is there something I can pray for you with? It was when I was at the truck show last week, there was a certain gentleman that came out to me. He's just a company driver. His company uses our website and loves our podcast, but he said at the end of it I never get this, but he said, Jared, is there something I can pray for you about? And I'm like, let me think about that. Yeah. Actually, I like that, and there are some prayers that I'd, might ask him to pray. So my goal for you or my you know, one request I would ask for you to listen to the show today and this week, man, write it down on a piece of paper, put it as a reminder on your phone, but just ask what out of 15 people if there's something you can do to pray for them. Tyler Allison: Yeah. Yeah. That's a really good point. And just to remind you guys, we do have a prayer line here at bulk loads. If you just email us prayer at bulk loads.com, we'd love to see your prayer request. And we have a team here who wants to pray for you. So if you are one of those 15 people out there, definitely, let us know, and, you know, we will pray for you. We believe, you know, that we have a big God out there who answers prayers. Tyler Allison: So let us do that for you. Jared Flinn: Be the light out there in this dark, dark world. Yep. So awesome. Well, I'll close this in prayer. Father God, we thank you for this day, Lord. We thank you for every person that we get to interact with, that we see whether it's through phone calls or interacting on a business front, with these people who visit at the stores or, truck stops, all those places, Lord. But, Lord, we just pray today that we can be a blessing for those out there, Lord, that we can be the light for those that are out there hurting. We know that there are a lot of people, that are struggling and going through pain. Jared Flinn: So, Lord, we, we pray over them, Lord. But more importantly, we pray that you move us, your holy spirit in us that we can, be a light and help those out there, in this world. So in your heavenly and precious name, amen. Thank you for listening to the Bulk Loads podcast. Please share this with people, that, don't know about us. We would love that share. You can share it through almost any medium that you listen to, whether it's YouTube, Apple, Spotify, all that. Usually, there's a quick share button. Jared Flinn: So, man, do us a favor and do that. Thank you very much, and God bless.