David Hendel featured in article by Freight Waves: The Postal Service is a few decades late

Culhane Meadows’ Washington, D.C. partner David Hendel was recently featured in an article by Freight Waves about chasing freight brokers as the Postal Service scrambles to slash costs.

Here are a few excerpts from the article:

The phrase “freight broker” is rather boring, I will admit it. As snoozy as those words may make you feel, these brokers are key to making sure stuff gets on trucks and across the country. 

Since deregulation wrested trucking from the control of the federal government in 1980, freight brokerages have become a trucking necessity. Every imaginable company — ranging from General Mills to Amazon to Starbucks — relies on freight brokers to place loads on trucks every day. 

One major transporter has tried to eschew freight brokers for years: the U.S. Postal Service. The Postal Service spent nearly $10 billion moving letters and boxes in fiscal year 2021. Most of that expense is on trucks, but there are also FedEx and UPS planes, trains and even ships. 

It’s not known when exactly the Postal Service started to use freight brokers, but attorney David P. Hendel only began including brokers like C.H. Robinson on his essential top 150 Postal Service contractor list in 2013. 

One reason that freight brokers have become so common is that there are way too many trucking companies for each retailer, manufacturer, farmer or whatever to form relationships with. So they turn to brokers to figure out who to work with. 

“The Postal Service is re-examining its network both long-haul and even local,” said Hendel, a partner at Culhane Meadows who specializes in government contracting work. “I think the Postal Service now views the carriage of mail as a commodity, rather than as a special service. It feels like it maybe should be taking advantage of the larger commercial marketplace.”

Implementing new contracts and other technologies could mean cost savings at the Postal Service, but it’s spooky for long-time carriers — especially because these new products aren’t always perfect. One trucking contractor told the Washington Post last year that the Postal Service’s new software has cost them $110 million and sparked hundreds of layoffs. 

However, perhaps 2021, famously the year that spot market rates shot to the moon, was a very bad year to turbocharge the usage of freight brokers. According to one analysis of public data, the Postal Service paid more than $50 million in extra trip dollars in January 2022, more than tenfold the spend from 2021 or 2020. 

But, Hendel said he believes it’s unlikely that the cost-conscious Postal Service would continue to pursue freight brokerage if it didn’t have the potential to slash costs. 

Even amid the move to modernize the Postal Service, Hendel doubts the agency would ever want to ditch its old-fashioned contract carrier model — just as UPS or FedEx hasn’t opened itself entirely up to the spot market. The risk to the mail system would be too large.

“I think that could be a dangerous thing because you don’t have the dedicated reliable providers you have today and you open yourself up to spot market issues,” Hendel said. “I don’t think the Postal Service will ever be well-served by relying exclusively on brokers — that would be a recipe for disaster.”

The complete article can be found HERE.

About Culhane MeadowsBig Law for the New Economy®
The largest woman-owned national full-service business law firm in the U.S., Culhane Meadows fields over 70 partners in eleven major markets across the country. Uniquely structured, the firm’s Disruptive Law® business model gives attorneys greater work-life flexibility while delivering outstanding, partner-level legal services to major corporations and emerging companies across industry sectors more efficiently and cost-effectively than conventional law firms. Clients enjoy exceptional and highly-efficient legal services provided exclusively by partner-level attorneys with significant experience and training from large law firms or in-house legal departments of respected corporations. U.S. News & World Report has named Culhane Meadows among the country’s “Best Law Firms” in its 2014 through 2022 rankings and many of the firm’s partners are regularly recognized in Chambers, Super Lawyers, Best Lawyers and Martindale-Hubbell Peer Reviews.

The foregoing content is for informational purposes only and should not be relied upon as legal advice. Federal, state, and local laws can change rapidly and, therefore, this content may become obsolete or outdated. Please consult with an attorney of your choice to ensure you obtain the most current and accurate counsel about your particular situation.

*Culhane Meadows is ranked by U.S. News/Best Law Firms in Technology Law, Bankruptcy/Reorganization Law, and Information Technology Law. This website and the communications herein may be considered attorney advertising. Previous results are not a guarantee of future outcome. This website is for informational purposes only and does not constitute legal advice. The information herein is not intended to create an attorney-client or similar relationship. Until you establish such a relationship and receive an engagement letter, you have not hired a Culhane Meadows attorney nor become a client of the firm. Whether you are a new or existing client of the firm, Culhane Meadows must determine that there is no conflict of interest and that it is willing and otherwise able to accept the new engagement before representing you on a new matter. Only if and after Culhane Meadows has informed you it is willing and able to accept your new matter should you send the firm any information or documents that you consider private or confidential. Such information will not be treated as private, confidential or otherwise protected from disclosure until Culhane Meadows has communicated in writing that it is willing and able to accept your new matter and provide you with legal counsel. Whether you need legal services and which lawyer or law firm you select are important decisions that should not be based on this website alone.

Accessibility Toolbar