A freight forwarder working for a freight forwarder provides an invaluable service in the sense that they match shippers who want to transport their goods with freight companies that are qualified, ready, willing and able to transport them for them. Freight forwarders and freight forwarders have access to numerous carriers and can easily obtain the right equipment for the move, which can save the shipper valuable time getting their product to market.

The services provided by a freight forwarding agency are ideal for small and medium-sized businesses that do not have a dedicated staff responsible for making transportation arrangements. In fact, depending on their shipping requirements, many companies can save large amounts of money per year by outsourcing their shipping needs to a qualified freight forwarding agency or third-party logistics company (3PL). Very large companies can also benefit from the services of a freight forwarding agency or 3PL solution provider, as the amount of goods shipped on a daily basis can exceed the capacity of their internal logistics department, causing delays. on shipping and extra costs.

Shippers who contract directly with motor carriers may inadvertently hire unauthorized, unsafe, or underinsured carriers, which can often result in unlimited liability for shippers in the event of damage, loss, or accidents resulting in serious injury. or death caused by the carrier. .

According to a New Jersey Supreme Court ruling, carriers can be held liable for the “negligent hiring” of motor carriers. Senders must now be able to demonstrate that they have performed their due diligence to the same extent that 3PLs do. It is critical that shippers hiring motor carriers understand what the courts are looking for when determining what constitutes negligent hiring. Shippers can significantly reduce these and other liability risks by hiring an experienced freight broker who has already implemented robust carrier qualification procedures.

Here are some robust carrier qualification procedures that all shippers should follow:

Check the Auto Carrier and Insurance Authority Submissions
Create a data file for each carrier you use and review it thoroughly before bidding for shipments the first time and each time you rehire that carrier. The file must contain a copy of the carrier’s operating authority and insurance filings, as well as the carrier’s safety rating with the FMCSA. Check if the authority of the motor carrier is active and the type of authority is common or by contract. Also, verify that a BOC-3 agent has been properly appointed and presented for service of the process.

Verify the Motor Carrier Safety Classifications by purchasing a copy of the Motor Carrier Safety Classification from the Department of Transportation. Carriers with “Unsatisfactory” ratings should not be used. Look at the carrier’s Safety Assessment Area (SEA) scores. An SEA rating greater than 75 is considered bad; therefore, carriers with SEA ratings greater than 75 should also not be used. If the carrier’s safety rating is Satisfactory, validate your business references, contact your insurance providers to verify that all of their policies are up-to-date and up-to-date, and obtain a signed motor carrier agreement before bidding on any cargo. If the carrier’s safety classification is conditional, obtain a copy of the report that was given to the carrier showing that their safety classification is “conditional” and the reason. You should ask the carrier what specific steps they are taking to maintain full compliance and have their rating reset to Satisfactory. If the carrier’s safety rating is “Unclassified” or “None”, check how long the carrier has been in operation. If the carrier is new or the owners recently owned or operated another trucking company, ask what happened and if the other company is still in business or not. Also, ask about the carrier’s safety-related policies and procedures, including controlled substance testing, medical exams, driver training standards, and driver compliance with hours-of-service standards for each motor carrier. Also, it’s a good idea to request references and check the carrier’s service record against those references.

Check the carrier’s liability and cargo insurance. Always speak with the carrier’s insurance provider and verify that insurance coverage is accurate and up-to-date for each and every carrier. Get a list of exclusions that are present in your insurance policies. Make sure the carrier’s name on the insurance certificate and the FMCSA operating authority are exactly the same, and make sure there is an authorized signature at the bottom of the insurance certificate. It is also good practice to verify that the truck and trailer listed on the insurance policy is the actual truck and trailer that the carrier is driving at the time of cargo pickup, and not one that is not insured.

Conduct a regular review of the carrier and protect yourself against double brokerage. Motor carrier data files must be kept up to date. New details obtained should be filed immediately, and the file should be reviewed frequently for possible changes in authority, safety ratings, and insurance policy coverage. Find out if the motor carrier also has broker authority. Some motor carriers with brokerage authority have been found to double brokerage charges with other possibly unauthorized, unsafe, and underinsured carriers to carry cargo. This can be a big problem for shippers who are unaware that their merchandise is being transported in a potentially unsafe manner; In most cases, they may not even know who is transporting their cargo.

Although there are invariably challenges when selecting motor carriers, implementing carrier qualification policies and procedures can substantially reduce your liability risk. Consider using an experienced freight forwarder who works for an established freight forwarding agency or 3PL, it can help free up a lot of resources from your business and most importantly help you avoid very costly litigation in the event of a catastrophic accident caused by a selected carrier without performing due diligence beforehand.