If you’re a shipper wondering what steps a freight brokerage will take to support compliant and efficient transportation operations, we don’t blame you. Without understanding the steps that can be taken to promote safety in the trucking industry, you may be left feeling uneasy about trusting a third party with your freight.
Throughout our years in this industry, here at ATS, we’ve developed carrier onboarding and compliance review processes to support our brokerage operations.
In this blog, we’ll outline the steps that every good freight brokerage should take to promote safety in their organization and to do their part to support responsible transportation practices.
A good freight brokerage is in safety mode from the moment it turns the lights on in the morning until well after its customers have gone to sleep. For these brokerages, maintaining consistent carrier onboarding standards is an operational priority.
To encourage the transportation of your freight in a consistent and compliant manner, a freight brokerage must have a systematic culture of safety. By this, I mean that from the corner offices to the front desk, compliance standards should be consistently applied throughout the organization of a freight brokerage ecosystem.
A freight brokerage’s commitment to operational compliance can be a large selling point of their partnership. If done correctly, a freight brokerage with a practicing culture of safety will, in the long run, be able to translate this into extra savings for their clients.
But how can you determine if a freight brokerage has an active culture of safety?
Here are some questions to ask your potential provider to help you more clearly determine whether their safety standards are truly up to par:
Questioning your freight brokerage about its safety practices will go a long way toward determining whether it’s the right fit for you.
A huge indicator of a freight brokerage’s dedication to safety is found by examining its carrier vetting process. Carrier qualification is an important part of transportation planning.
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Just like any other form of business, quality control is a stepping stone to success. As such, the brokerages with established carrier onboarding standards work tirelessly to whittle down the number of carriers they work with. These brokerages always prioritize quality over quantity in the creation of their carrier network.
Through its carrier onboarding and selection process, a good freight brokerage can reduce operational disruptions that non-reputable carriers tend to create. This process is complex, and the right freight brokerage will maintain operational consistency when selecting a carrier.
The following tools may support carrier review and operational consistency.
This agreement is required to be signed, sealed, and dated before a freight broker assigns freight of any kind. The Broker-Carrier Agreement is an exercise in the communication of expectations between a brokerage and their partner carrier.
These agreements are designed to hold each party accountable. Questions like “Who’s responsible for making sure the carrier has all the tools they need to safely deliver a load?” and “When/how much will the carrier be paid?” are answered.
Additionally, these agreements serve as a method to communicate the limits of liability on each side.
By having a clear understanding of, and a contract outlining, the expectations on both sides, clear operational expectations are established between parties.
The automated systems available to review carrier eligibility and compliance-related information of a freight brokerage’s carrier network should be utilized. When they are used correctly, these technologies can result in the greater operational consistency.
Great freight brokerages will put automated systems in place that flag carriers that may not meet internal onboarding requirements. These systems are refreshed at regularly scheduled intervals, providing the most up-to-date data available for a brokerage to work with.
Human beings, when left to their own devices, are prone to error. Things slip by unchecked when stimuli are overloaded and plates are overflowing. Good freight brokerages understand this and employ systems to prevent such errors. These automation technologies create a system of checks and balances to prevent these human-related errors.
A carrier’s active authority is its ability to be “for hire.” This ability is dictated by several different criteria that must be met. Using automated systems, a freight brokerage can review whether carriers have provided documentation associated with onboarding requirements.
When these stipulations are not met, the freight brokerage must notify each carrier that they don’t have the required operating authority documentation on file. In these instances, freight brokerages sideline the carriers without active authority until their situation is amended.
These industry benchmarks that must be hit for a carrier’s active authority to be approved, include but are not limited to:
Sometimes a carrier’s authority is lost after they have already begun the process of hauling a load. In these instances, an automated email notification is sent to all stakeholders. This email is sent to make sure that everyone is on the same page.
This may happen if the carrier has failed to submit proof of insurance to the Federal Motor Carrier Safety Association. Frequently, brokerages may have to notify the carrier of their loss of authority. A good freight broker will then work to find a new carrier for its customers' freight.
Although this may result in a delay in the delivery of a shipper’s freight, a brokerage may elect to pause use of a carrier pending updated documentation.
A common limitation used in a freight brokerage’s carrier onboarding practices is an automated 90-day authority restriction.
Often, the trucking partners that freight brokerages contract are known as owner operators. These carriers are individuals who either own or lease their trucks. As such, these independent truck drivers operate their own carrier business. Because of their small size and low overhead, these carriers can enter the transportation market with relative ease.
Using this tool as a filter, a freight brokerage may not work with any carrier that has been operating in the market for less than 90 days (as an example of a policy a broker may have). It is not until the 91st day that these systems will allow their brokerage to view these carriers as a viable option.
A freight brokerage’s automated 90-day authority restriction may help identify certain operational or compliance risks. Activities such as “double brokering” and “holding a load hostage” are avoided using these systems.
Just like you wouldn’t buy a car without seatbelts, a freight brokerage with established onboarding standards may establish internal guidelines regarding publicly available carrier information. This is where the automated dispatch restriction for safety ratings comes into play.
A safety rating in the trucking industry is measured based on a carrier’s administrative adherence to all laws and guidelines.
Carriers are audited for these guidelines by the Federal Motor Carrier Safety Association (FMCSA). The FMCSA is a government organization that monitors the trucking industry as a whole.
Following the FMCSA’s audit — occurring within 12 months of their introduction to the market — carriers are given a safety rating.
These ratings are categorized as follows:
None: The rating given to a carrier who has not yet been audited by the FMCSA. This rating is considered to be admissible, and carriers with this rating are widely accepted by reputable brokerages.
Satisfactory: This rating is given to a carrier who either meets or exceeds the FMCSA’s guidelines for administrative safety practices.
Conditional: A rating that is given when most of the FMCSA’s safety guidelines are met.
Unsatisfactory: This rating is applied to a company who — following its audit — is found to have a large number of deficiencies.
Generally, freight brokerages will work with carriers who grade “conditional” and above. Some brokerages may only do business with carriers that have a safety rating of “none” or “satisfactory” based on their internal onboarding preferences and operational standards.
3rd party reporting systems are another excellent tool used in the freight brokerage carrier vetting process. These third-party systems help brokerages by providing a record of carrier histories for them to check on.
By using third-party systems such as TIAWatchDog, Carrier 411 or Freight Guard, a freight brokerage can check in on a prospective carrier's history in the industry. Doing so allows brokerages to “no-load” any carrier with a history of the fraud activities mentioned above (double brokering, holding loads hostage, etc.).
Freight brokerages can integrate the use of these 3rd party systems directly into their regularly scheduled safety automation processes. This allows brokerages to support ongoing carrier review processes using available third-party information.
The value a shipper gains, when they partner with a brokerage that puts safety first, can be categorized in two ways:
Working with a freight brokerage that maintains carrier onboarding processes, who isn’t afraid to turn down a shipment they cannot handle, and who works with carriers that meet its onboarding requirements, will pay off in the end.
When you choose to partner with one of these brokerages you can rest assured that your shipment is being managed through established operational processes.
In the business world, nothing is more valuable to a company than its reputation. Maintaining a good reputation is integral to finding success. That said, the partnerships you enter and the company you keep directly correlated to the way you are perceived.
If integrity in your industry and operational reliability are important to your organization, choose your partnerships wisely. By partnering with a brokerage that maintains structured carrier onboarding practices you will be protecting not only your cargo and the people involved in its transportation but the reputation of your company.
To a good freight brokerage, consistent operational processes are critical.
Choose a transportation partner with consistent carrier onboarding practices and transparent operational processes.
Look beyond your bottom line. Safety, like success, comes at a price. You will find that the price you pay by using an unsafe brokerage extends well beyond your balance sheet. When selecting a partner, ask about their safety practices.
If you would like to learn more about the transportation industry, check out a few more of our blogs. As always, please remember that we are here to help you with any questions/concerns you may have.