In 2021, the Truck Leasing Task Force was created in response to a Congressional mandate to combat these agreements, which frequently exploit drivers and compound industry turnover woes.

In these arrangements, a motor carrier retains ownership of the truck and leases it to a driver, often from the same carrier. Despite promises of autonomy and eventual ownership, success stories are uncommon. Instead, numerous reports detail drivers ending up owing money to the carrier at the conclusion of pay periods.

“While the purported goal of these agreements is for the driver to own the truck and become a full-fledged owner-operator at the end of the lease, the agreements rarely work out that way,” OOIDA wrote. “In the end, drivers are paid pennies on the dollar with little chance of owning the truck and zero independence. This system pushes individuals who desire a career in trucking out of the industry and further contributes to driver churn.”

OOIDA has offered several recommendations to address the issue:

• All leasing agreements should explicitly define exclusivity with the lessor.
• Leasing agreements must feature a transparent financial structure that accurately tracks lease payments’ progress.
• Lease arrangements should incorporate safeguards to prevent individuals from being coerced into signing contracts they do not fully comprehend.
• Federal agencies should establish a centralized office to ensure adherence to leasing regulations and provide oversight of lessors.

Representing small-business truckers, OOIDA highlights that many of its members, along with other drivers, have fallen victim to these predatory practices and wholeheartedly support the efforts of the task force.

“Lease-purchase agreements are nothing more than inequitable financial scams that push individuals who desire a career in trucking out of the industry and further contribute to driver churn,” OOIDA wrote. “We urge the Truck Leasing Task Force to consider the recommendations outlined in these comments as the advisory group continues their deliberations and submits their final report.”

Source: Land Line

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On Feb. 16, the FMCSA initiated a 30-day comment period to gather lease-purchase agreements. The Truck Leasing Task Force, established by Congress, has been scrutinizing the terms, conditions, and fairness of prevalent truck leasing arrangements. In order to comprehensively assess the landscape of lease-purchase agreements in the trucking industry, the FMCSA is encouraging truckers to submit their agreements for evaluation.

OOIDA has expressed concerns to the agency, asserting that a 30-day period is inadequate and urging an additional month for submission.

“We request the public comment period be extended for 30 days in order to provide the Truck Leasing Task Force as much data as possible,” OOIDA wrote. “This will give drivers and other members of the public sufficient time to collect and submit leasing information.”

Furthermore, extending the comment period by another month would allow truckers attending the Mid-America Trucking Show in Louisville, Ky., to actively participate. The Truck Leasing Task Force intends to convene its next meeting during this event later this month.

OOIDA is a supporter of the Truck Leasing Task Force and remains optimistic that insights provided by truck drivers can contribute to mitigating the predatory nature of many such agreements. Instances have been reported where truck drivers work full pay periods but end up owing money to the carrier, with the driver seldom owning the truck at the conclusion of these arrangements.

“We feel requesting information from commercial motor vehicle drivers will assist (the task force) in reviewing such leases to identify terms and conditions that may be unfair to drivers,” OOIDA wrote.

For those interested in commenting, a comprehensive list of questions and required documents from the FMCSA can be found here. Additionally, guidelines on maintaining the privacy of the information submitted are available. Commenters are advised to clearly designate any confidential commercial or financial information and mark each page accordingly.

Submissions containing confidential business information should be directed to Brian Dahlin, Chief, Regulatory Analysis Division, Office of Policy, Federal Motor Carrier Safety Administration, 1200 New Jersey Ave. S.E., Washington, DC 20590-0001.

Public comments that do not contain confidential business information will be accessible on Regulations.gov. Comments will be accepted until March 18.

Source: Land Line

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During a five-hour meeting on Jan. 18, the task force initiated an in-depth examination of contract terms that could impede owner-operators from covering maintenance costs for vehicles leased or purchased from motor carriers.

Regulators have tasked the members of the task force with investigating leasing agreements within the motor carrier industry to identify potential inequitable terms that “the frequency and quality of maintenance performed on subjected vehicles” and may adversely affect owner operators.

While the prevalence of such predatory lease-purchase agreements is yet to be established by the task force, a yearlong study by a U.S. government financial consumer group highlighted the widespread risk of truckers hastily signing agreements without a clear understanding of the incurred costs.

“Our problem is not necessarily always the language of the agreements themselves,” said Paul Cullen, an attorney and member of the task force. “The problems that occur also are with the motor carriers or the leasing companies’ failure to abide by the agreements.”

Certain lease-purchase agreements stipulate that the lease-purchaser is responsible for all repairs, maintenance, service, and upkeep, according to Jim Jefferson, Supervisor of Regulatory, Compliance, and Consumer Protection for the Owner-Operator Independent Drivers Association.

“All that responsibility falls on them to make sure that the truck is maintained,” Jefferson said.

The complexity of these agreements poses a significant challenge, especially for younger truck drivers who may lack familiarity with lease terms, expected income, potential deductions from their pay, or the inclusion of maintenance fees.

Committee members emphasize the need to differentiate between dishonest business practices and fair agreements that provide drivers with a genuine opportunity to establish their businesses.

“ATA believes that unscrupulous actors in our industry should be addressed, but painting all lease agreements as deceptive or worse is simply an inaccurate picture of industry business practices,” said Nathan Mehrens, vice president of workforce policy. “Efforts to root out deceitful lease agreements should not preclude carriers and drivers from entering into arrangements that preserve individuals’ opportunities to pursue their careers in the manner they choose.”

The task force is encouraging owner-operators and carriers to share their experiences and agreements related to maintenance challenges during a dedicated session at the Mid-America Trucking Show in late March.

Key questions the task force is seeking answers to include:

• Did you have sufficient time to read and comprehend the lease agreement?
• Were you given an opportunity to inspect the equipment covered in the agreement?
• Did you receive information about the vehicle’s history of damages?
• Was a lease-purchase your sole option?
• Were your responsibilities clear in case of a major breakdown?
• What are the primary challenges in your relationship with motor carriers?
• What aspects would you change about your relationship with your motor carrier?

“We have hit onto something very big,” said Steve Rush, task force chairman founder, and chairman of New Jersey-based Carbon Express. “No matter how you shake it out, the maintenance is critical to the safety of the highways and to the safety of everyone around a truck.”

Source: Transport Topics

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This task force will provide resources to drivers interested in leasing agreements, aiming to ensure that these contracts are as fair and equitable as possible for all parties involved before signing off on them. FMCSA is hopeful TLTF’s work will result in more secure business relationships between truckers, motor carriers, and other stakeholder entities across America’s highways.

The nine members of the Truck Leasing Task Force include:

• Tamara Brock, Brock Logistics, LLC and Lewis & Lewis Logistics, LLC (Independent Owner-Operator)
• Paul Cullen, The Cullen Law Firm, PLLC (Attorney)
• Troy Hawkins, TTOH Consulting & Logistics, LLC (Independent Owner-Operator)
• Jim Jefferson, Owner-Operator Independent Driver Association (Consumer Protection)
• Joshua Krause, OTR Leasing, LLC (Business)
• Kaitlyn Long, International Brotherhood of Teamsters (Labor Organization)
• Steve Rush, Carbon Express Inc. (Carrier)
• Lesley Tse, Animal Defense Partnership, Inc. (Attorney)
• Steve Viscelli, Ph.D., University of Pennsylvania (Economic Sociologist)

“At a time when our country needs truck drivers more than ever, we must do everything we can to support the men and women who work in this vital industry,” said U.S. Transportation Secretary Pete Buttigieg. “The Truck Leasing Task Force is taking a hard look at leasing agreements as part of our effort to ensure every truck driver in this country has good working conditions and can make a good living.”

Truck leasing is a major factor that affects the career decisions of many driver-operators in the trucking business. Unfavorable contractual terms can often lead to hazardous scenarios on roadways, as safe drivers may feel forced away from pursuing careers in this industry.

“The Truck Leasing Task Force addresses one of trucking’s great challenges. Leasing can have a major impact on people choosing trucking as their career, and protecting drivers is of the utmost importance,” said FMCSA Administrator Robin Hutcheson.  “FMCSA is committed to addressing issues that may impact the recruitment and retention of drivers in the trucking industry.”

Source: truckersnews

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