| It’s always been important for shippers to vet the carriers and brokers that haul for them. But these days, it’s absolutely crucial that shippers qualify their providers.
Historically, when engaging with a new carrier or broker, shippers only had to check three things: FMCSA licensure, insurance and a W-9.
These are still important safeguards. But savvy shippers take it a few steps further to protect their freight.
Life used to be simpler. Have you seen pictures of old car seats for babies and children? Kids used to get plopped into a contraption resembling something between a lawn chair and a bucket. These days, parents take extra precautions, like paying top dollar for the latest safety technology and getting their car seats inspected by professionals because that’s how we protect precious cargo.
Here are six ways shippers can qualify brokers and carriers:
1. Check their operating authority. It’s no longer enough to simply have an active MC number. Shippers also need to consider how long the brokers have been in business. The end carriers who actually haul the freight have their own set of standards when qualifying the brokers they haul for. You don’t want your freight to be overlooked in the open marketplace because the broker is new and the carriers aren’t willing to haul for them. Carriers want to haul for brokers who are well-established with a solid reputation and credit. That’s why we say Happy Carrier = Happy Customer. Carriers will pass on shippers loads, due in no part to the shipper, but because they don’t want to work with broker the shipper has hired.
Beyond ensuring the broker or carrier has operating authority and is well-established, shippers should also consider capacity. How many trucks do they have? Check their FMCSA registration. If they only have one truck listed but they’re promising you ten loads a week, that might be a sign that they intend to broker the rest. If you’re looking for a provider to serve as both hauler and broker, make sure the company has the appropriate designations.
2. Insurance. Shippers should work with their insurance companies and stakeholders to determine the appropriate coverage requirements to meet the demand of their providers and suppliers, including their motor carriers and brokers.
3. W-9. Some things never change– we still need to work together to stay in compliance with Uncle Sam.
4. Monitor their Credit/Financial Position. In the past, if a broker owed a carrier money, the carriers often tried– and sometimes succeeded, through litigation– to collect payment from the shipper. This meant the shipper– who had already paid the carrier– paid twice. To avoid this financial drain, shippers should monitor their brokers’ credit scores. Ask a broker or carrier for a Letter of Credit in the shipper’s name in order to protect yourself. This ensures the shipper has access to the funds in the event that you discover the carriers haven’t been paid. Shippers can also request that brokers provide proof of payment to the carrier.
5. Check their Google Reviews. Do people like working with this broker? Solid partnerships in the marketplace are crucial to a shipper’s success. Happy carrier = happy shipper. Don’t be afraid to check a broker’s references and determine whether they have experience working with customers similar to your company.
6. Interview them. After you’ve made sure all your bases are covered in terms of licensing, capacity, reputation and financials, don’t be afraid to ask a prospective broker or carrier what’s unique about them. What value are they adding by way of systems, reporting and data? Are they well-known for their exceptional customer service?
Like navigating the evolving world of infant car seats, this may seem like a lot of hoops to jump through. Taking these precautions, though, ensures you’re doing everything within your power to protect your company– and your cargo. |
