{"id":2540,"date":"2020-11-03T19:21:50","date_gmt":"2020-11-03T19:21:50","guid":{"rendered":"https:\/\/quicktransportsolutions.com\/blog\/?p=2540"},"modified":"2020-11-03T19:21:52","modified_gmt":"2020-11-03T19:21:52","slug":"a-look-at-trucking-from-the-brokers-perspective","status":"publish","type":"post","link":"https:\/\/quicktransportsolutions.com\/blog\/a-look-at-trucking-from-the-brokers-perspective\/","title":{"rendered":"A Look at Trucking from the Broker\u2019s Perspective"},"content":{"rendered":"\n

We talk a lot about trucking companies, but they aren\u2019t the only players in the supply chain. Critical to ensuring goods get to where they go include brokers. But who are these brokers and what do they do? There is a lot of information out there, so it is time to learn more about a freight broker. If you plan on starting your own trucking company, you will need to know how to work with them. <\/p>\n\n\n\n

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Freight brokers hold an important role in the transportation\nsector. They are the middlemen that help get cargos shipped and optimized in\ndifferent ways. When it comes to bringing shippers and carriers together,\nfreight brokers play an indispensable role. So, let\u2019s take a look at some of\nthe myths and realities of the freight broker profession. <\/p>\n\n\n\n

Freight Broker Myths<\/strong><\/p>\n\n\n\n

First, some think that freight brokers and freight forwarders\nare the same thing. In fact, they are two distinctly separate professions\nwithin the transportation sector. Freight brokers act as a missing link between\nthose who have goods to ship and transportation companies who can ship them. On\nthe flipside, freight forwarders are fully in charge of the goods they are in\npossession of. Freight forwarders act on behalf of the cargo through the entire\nshipping process. <\/p>\n\n\n\n

Another myth that seems to have legs is that anyone can\nbecome an online freight broker. Here at QuickTSI, we can tell you it isn\u2019t as\neasy as that. Sure, it is possible to start a freight brokerage without any\ntraining or a ton of up-front capital, but that doesn\u2019t mean it is easy. There\nare freight brokering schools out there that provide top-notch training\nmaterials. While you may have to put some time and investment into your\ntraining, you will be ready to run your own freight brokerage.<\/p>\n\n\n\n

Speaking of investment, some think that it costs upwards of\n$75,000 to get a freight broker license. Why? Because the FMCSA has a criterion\nthat says that. Still, that does not mean it is the only way to get your\nfreight brokerage license. Enterprising freight brokers can utilize a freight\nbroker surety bond. Now, you will have to pay a small premium, but that premium\nis based on your business and personal finances. The form you are required to\nfill out during this process is called a BMC-84.<\/p>\n\n\n\n

Pay Attention to Licenses and Goods<\/strong><\/p>\n\n\n\n

Here is another one to consider: Freight brokers cannot get\na bond with bad credit. In fact, there are bad credit surety bond programs\nspecifically created for those who have bad or poor credit. Sure, you will have\nto pay a higher interest rate, but it will still be below 10%. The surety bond\nprovider will have a holistic look at your record to ensure you are not a risk.\n<\/p>\n\n\n\n

A dangerous myth is the one that you can operate as a\nfreight broker without a license. Remember, you must always get permitting\nauthority from the FMCSA before you begin working as a broker. The name of the\nlicense if the Property Broker Registration and all freight brokers must have\none. It is against the law to operate as a freight broker without proper\nlicensing. <\/p>\n\n\n\n

Also remember that freight brokers do not take possession of\ntheir clients\u2019 goods. In fact, most freight brokers never see the cargo they\ncoordinate. They organize the transportation of the goods, but they are not\nphysically present anywhere in the process. There are some situations where\nasset brokers may take possession of the cargo for a period, but that is atypical\nof most situations. <\/p>\n\n\n\n

A final thing to remember when it comes to money, assets and\nlicenses is that freight brokers without assets still have access to a vast\ncarrier network. Even for brokers who have no trucks of their own, they have a\nvast network of connections they can draw upon. <\/p>\n\n\n\n

Safety is one of the main reasons freight brokers need to\nhave lots of knowledge and training. Why? Because fleets themselves are not the\nonly interested parties when an accident happens. Brokers and third-party\nlogistics companies can get wrapped up in lawsuits. So, how do freight brokers\nknow they are working with a responsible party?<\/p>\n\n\n\n

Safety Across the Board<\/strong><\/p>\n\n\n\n

The fact is all companies working in the transportation\nspace must ensure they are always operating safely. It must be safety across\nthe board. There are industry advocacy organizations that are concerned about\nthis very thing. Freight broker and third-party liability is real. The\nTransportation Intermediaries Association (TIA) asserts that nuclear verdicts\nspecifically are a problem. <\/p>\n\n\n\n

Not only do motor carriers suffer huge damages, but plaintiff\u2019s attorneys also go after freight brokers when an independent contractor<\/a> hire becomes negligent. If the freight broker \u201cshould have known\u201d the carrier was possibly unsafe, they can be targeted in court. As a result, brokers are subject to huge liability risk in negligent selection and vicarious lawsuits. <\/p>\n\n\n\n

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And if you think it can\u2019t happen, think again. It happened\nin 2012, in the state of Oregon, where a jury awarded millions to the family of\na man killed in a commercial motor vehicle accident. And while that example may\nhave been the first case of punitive damages against a transportation broker,\nit most certainly will not be the last. <\/p>\n\n\n\n

In that case, the plaintiff\u2019s attorneys were successful in\narguing that the logistics firm did not conduct due diligence when it hired a\ntrucking company to haul goods for Nestle Waters of North America. The problem\nhere was that the motor carrier the logistics provider hired was operating\nwithout insurance or operating authority. The load should not have been\nbrokered to them. <\/p>\n\n\n\n

In the case, the attorneys came out stating that there is\nnot enough government oversight of the transportation broker industry. They\nstated that with no regulatory watchdog keeping an eye on the job brokers are\ndoing, so they said it was up to the courts in this case. <\/p>\n\n\n\n

Setting a Standard for Brokers<\/strong><\/p>\n\n\n\n

So, what is happening now? Currently, the TIA is making a\nbig push to get the government to get involved. They want to have a standard\nset so that brokers can check a carrier\u2019s safety record before bringing them on\nto handle freight. <\/p>\n\n\n\n

As a result, Congress has been working on the Motor Carrier\nSafety Selection standard. The bill was introduced\nin July<\/a> in the U.S. House. It would require freight brokers to check\ncertain data points before hiring anyone on for a load. With no current\nstandard in place, it is unclear how a new standard would look and what\ninterested parties should expect. <\/p>\n\n\n\n

The bill would require anyone brokering a load to ensure the\ncarrier they broker on behalf of their customer:<\/p>\n\n\n\n