4.0 Pre-Qualifying & Working with Carriers
Atex Freight Broker Training, Inc. – El Paso, Texas
Lesson 4.0 Pre-Qualifying & Working with Carriers
Overview for Lesson 4.0
Carrier Set-Up Package
Sending your set-up package
The carrier database
Carriers Calling in Response to a Posted Load
Booking the Load Part 1- When the Carrier Says “Yes”
Broker-Carrier Agreement
Carrier Confirmation
Booking the Load – Part 2 – Due Diligence
Third party resources, Safety Measurement System and carrier performance ratings (CPR)
Using “Reasonable Care” in Carrier Selection
Finding Capacity
Potential Problems
Carrier Retention
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Let’s get started …
Carrier Set-Up Package
Fax/email/upload set-up package to the carrier
- Fax/email cover sheet,
- Letter of introduction,
- Grant Letter from FMCSA,
- Broker-Carrier Agreement,
- Copy of evidence of a surety bond or trust fund,
- Billing instructions,
- Statement of position,
- Payment terms, don’t use this at first,
- Carrier info request,
- Company information,
- CARB compliant notice
Sending your set-up package – two instances
Fax, email or have a third party host these pages:
- The Set-Up Packages,
- The Broker-Carrier Agreement,
- The Carrier Load Confirmation
Broker-Carrier Agreement is sent only one time
Carrier Load Confirmation for each load
Legal obligation to “perform”
Broker will receive back the following “permanent” information:
- Initialed, signed and dated contract – Broker-Carrier Agreement,
- W-9.
- Motor carrier authority,
- Generic certificate of liability insurance,
- California CARB certification – if applicable,
- Payment terms response – if applicable
When the carrier sends their own agreement … what to do …
Three things carriers strive for:
(1) good rates,
(2) being paid on time, and
(3) getting treated fairly
The carrier database
Enter relevant data into the database
Example Carrier Database – top of page
Return to Module 2.0 for Database information
Carriers Calling in Response to a Posted Load
Is the load still available?
You will say, “I THINK it’s available – I’ll call to verify this …”
Before calling the shipper, answer any questions that the caller has.
… If you THINK the load is already “covered”
… If the load IS already covered
Start a conversation …
You’re looking for – “Yes, I want the load”.
Then, ask several questions:
(1) Where is the truck now?
(2) Is the truck empty?
- Get call-back number,
- Get contact name and DOT#,
- You need to call and check if the load is still available
Booking the Load – Part 1 – When the Carrier Says “Yes”
First, check the FMCSA website:
- Check carrier’s Authority Status,
- BIPD insurance, and
- BOC-3.
FMCSA licensing and insurance information:
Scroll down to Licensing & Insurance and click on it.
Look for three items:
- Status is “Active”
- At least $750,000 of insurance and
- A “Yes” for their BOC-3
Note: In 2011 – no requirement for cargo insurance; but … the shipper still wants you to make sure the carrier has cargo insurance.
Next,
Call the carrier back
After faxing/emailing/uploading the set-up package …
Immediately call the shipper back:
- Tell shipper “game on”,
- Tell him to send his confirmation,
- Ask if there is a pick-up number,
- Ask if there are special instructions.
Next …
Look for the carrier to return this information:
- The Broker-Carrier Agreement, properly executed,
- Copy of their carrier authority,
- W-9 form,
- Generic certificate of liability insurance,
- Evidence of CARB registration, if applicable
- Prepare the carrier confirmation
The Load Confirmation will be the last item
Note: Here’s what to do if the shipper says they don’t have or use confirmations …
Do NOT dispatch a truck until the load confirmation is properly executed and returned …
Next contact driver …
Possible additional instructions:
- Call when loaded for a “trip number”,
- Call when empty,
- Call in each morning for check-in,
- Call if there are problems, and
- Lastly, after dispatching truck, get named as “certificate holder”
Do NOT exercise too much control …
FMCSA webpage for Coercion:
Go here: >>> Coercion
Continue to build carrier database
Summary and checklist for booking a load:
- If the driver says YES,
- Ask location of the truck,
- Call the shipper, ask if the load is still available,
- If it is, send set-up package to carrier,
- Call the shipper back,
- Check FMCSA website,
- Prepare load confirmation,
- Receive carrier information, including load confirmation
- Talk directly to driver,
- Give driver instructions,
- Dispatch truck,
- Get named as certificate holder
Broker-Carrier Agreement
Look for this first …
If carrier is moving slowly.
What about generic agreements?
Understanding your broker-carrier agreement
Again, don’t be over-controlling – you might break the independent contractor relationship – a No-No …
More on this further along in “vicarious liability”
Carrier Load Confirmation (Rate Con)
Done for each load
See sample load confirmation …
Booking the Load – Part 2 – Due Diligence
- BASICs, (2) the Safety Measurement System (SMS) and (3) driver safety ratings.
Third party resources, SMS and carrier performance ratings
Here’s a link where scores and ratings are available:
>>> https://csa.fmcsa.dot.gov/about/
Each icon represents a particular behavior …
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Using “Reasonable Care” in Carrier Selection
Two separate but related issues …
- CSA scores and FMCSA’s safety fitness determination (SFD)
- What is broker’s duty?
Henry Seaton, transportation attorney:
“Regarding carrier selection, do not warrant in contracts anything more than that your retained carriers will be licensed, authorized and insured, meaning they are certified by FMCSA to operate in interstate commerce”.
The FAST Act of 2015
Currently, there are four categories of safety fitness:
The FMCSA issues safety ratings that indicate whether a carrier is –
- Satisfactory,
- Conditional,
- Unsatisfactory,
- Unrated
Broker’s duty to use reasonable care in carrier selection
Transportation attorney Henry Seaton in his recent book, “Rules of the Road: A Practical Guide to Legal Issues in Truck Transportation”
Finding Capacity
Some search ideas –
LET ME REPEAT …….
… NEVER pass up an opportunity to get set up with Owner Operators
Create a spreadsheet to track LANE activity …
- How many loads on each major lane,
- Profit margins on each major lane,
- How easy is it to find capacity on each major lane,
Potential Problems
Late pick-ups or deliveries
Long time waiting – detention
Unexpected layovers
Pre-delivery checks
No back hauls
Little or no responses
Double brokering?
Damage or missing pieces on delivery –
Driver accidents or breakdowns
Miscommunications
Carrier Retention
Rate each carrier for these four things:
- On-time pick-ups and deliveries,
- Following instructions,
- Communications, and
- Availability
Summary:
- Priority – create the set-up package,
- Two instances for sending out your package,
- Enter data into your carrier database,
- Be ready for incoming calls,
- When carrier says, YES, begin booking the load,
- Check on load availability from shipper,
- Check FMCSA website,
- After agreement and confirmation are returned,
- Dispatch the driver,
- Monitor the load,
- Potential problems,
- Carrier retention