As a transportation industry freight broker, it’s crucial to properly vet your motor carriers. At PFA Transportation Insurance & Surety Services, we have a dedicated Claims Department that has firsthand knowledge of the pitfalls associated with hiring motor carriers without appropriate vetting. This includes claims where carrier lacks proper authority or sufficient insurance.
Failing to conduct due diligence before tendering a load can expose your business to liabilities that could have been avoided. Negligent hiring or entrustment claims can hold you responsible for damages caused by a carrier you hired. To mitigate these risks, we recommend that freight brokers develop and maintain carrier qualification procedures and document them thoroughly.
Before tendering freight to a carrier, we strongly encourage you to take the following steps:
By following these best practices, you can protect your business from costly liabilities and ensure that you are conducting business with reputable and qualified motor carriers.
NOTE: Be aware that there are fictitious COIs being passed around within the transportation industry. These fake COIs usually contain an altered phone number and/or email address. If the email address for the insurance agency ends with @gmail.com – this should be a red flag. Be sure to Google the insurance agency in order to verify the correct phone and email and speak to the insurance agent directly. Do not rely on information regarding the motor carrier’s insurance that is posted on a load board. This does not relieve the freight brokerage’s obligation to verify all information to ensure it is accurate and up to date (and not fictitious).
Minimum due diligence should include:
However, checking that the motor carrier does not have an “unsatisfactory” safety rating may not be enough these days given the number of recent court rulings from around the country. Therefore, it is highly recommended to seek the advice of a transportation expert to better protect yourself and your company. As the saying goes, “better safe than sorry”!
A white paper jointly published in 2016 by the Transportation Intermediaries Association (the “TIA”) and the Canadian International Freight Forwarders Association (the “CIFFA”), entitled “Doing Business as a Freight Broker in Canada,” lists the following suggestions to vet a carrier:
The Doing Business Paper also provides a helpful non-exhaustive list of considerations when working with new motor carriers:
The TIA makes these additional suggestions in its resource material titled “Carrier Selection Framework”: