Thorough Broker Due Diligence Saves Money in the End

It's 5PM, the boss just dropped a "Must Go Today" truckload shipment order on you. You call all the broker's and trucking companies you work and not one has an available truck for you. What do you do? Most traffic managers are turning to the Internet to broaden their trucking company and freight broker relationships. By simply searching "trucking companies" or "freight broker's", hundreds turn up on Google, Yahoo, and Bing search engines. Not a bad idea, really at face value seems like a very intelligent and astute thing to do; however what you don't know is who is on the other line.

For every big time brokerage house there are probably a hundred small time companies ran out of garages or spare rooms in someones home. While that in its self doesn't predicate a problem, the point is that with so many companies operating out there, how do you know how to select one when your back is against the wall?

First, always check with the DOT, they monitor both motor carriers as well as freight brokers. To research a broker you will need the broker's name and the state of operation. Knowing that, click the "Operating and Authority" link under the Company Safety Records subheading on the following website: http://www.fmcsa.dot.gov/safety-security/safety-security.htm - Click through the security warning, once that is done you will see in the top right corner a drop down box, select "Carrier Search" and enter the information you know. There could be hundreds of companies with the same name, so the more you know about the company you are researching the less time you would spend reading information about a company that is 2000 miles away in a basement in Maine. Upon finding your broker, you will be able to find out three very important pieces of information: 1) the broker's insurance company, 2) the broker's bond company, and 3) the date the broker went into business.

One of the first things to check on about a broker is whether or not their Surety Bond still active, a broker without an active bond is a very risky and illegal broker to associate your company. While the bond is in effect the brokerage company can tender freight on your behalf to motor carriers for an agreed rate, often times the agreed rate is cheaper than your rate! When a broker loses his bond, they are putting your freight in jeopardy. If a carrier were to find out that a bond was no longer in effect the trucker could stop with the load, causing delays to your customer and even returning it to your yard. After you make sure the broker keeps their bond active, check to see if they are paying their bills, if not most trucking firms do inquiries into the bond in hopes of recovery of their transporting of cargo if a broker hasn't paid in 45-60 days. A broker falling behind on their payments to motor carriers is a very good indicator of financial problems. While the brokers credit is not your problem, your load tendered to a flatbed carrier for instance who refuses to deliver the load until they get paid is your problem - like it or not! So make sure the bond is Active and has no inquiries against it.

So you have checked out their authority, checked out the date the company was created... so, now what? You check to see how serious this broker is and if they have a DUNS number. Most reputable companies that are established have a DUNS number, this number provides you the peace of mind about the credibility of the broker. Dun and Bradstreet have been providing business decision makers with insightful information on companies to as Dun and Bradstreet state : "Decide with Confidence". With over 160 years of history, a DUNS number is a big step for most small companies as it provides fairly detailed information about the company. A surprising fact about the DUNS number is that 77% of the active United States database includes companies with 10 or fewer employees. Most small brokerage companies fall into this category. Merely having a DUNS number doesn't ensure long term success, however it allows a glimpse of the overall stability of the brokerage firm and this allows you to focus on your core competency and not spend hours digging up information about a small time brokerage company.

Knowing the broker's insurance company will enable you to double check the status of the insurance Certificate you received when the broker set you up as a customer. With no knowledge of this broker, who's to say they aren't running a scam? Read enough Transport Topic's and you will hear about hostage situations, where brokers refuse to deliver loads until customer pays for the truckload freight charges. Even then, the freight is just thrown away or pilfered with no sign of the motor carrier who is potentially in on the scam with the broker. Anyone with a bottle of white out can recreate the Certificate Holder form in a matter of minutes. Don't take everything that is faxed to you from a freight broker or carrier for face value - call up the insurance agent on the certificate and verify the accuracy, limits and effective dates. You wouldn't trust your own car to someone you never met, so why would you trust your companies full truckload shipments?

Doing research is critical to being successful in the challenging times we now operate under. While we all feel like we have super hectic schedules, take time to slow down and don't overlook the small things. If you only focus on the big problems; the little ones will multiply and sink you. Spending a few minutes researching on the internet the bond company, date of inception, DUNS number and calling to verify insurance and bond status will in the end save you a lot of heartache and stress.

Looking to avoid the stress of finding a broker? Please contact Integrated Transport Logistics at dispatch@integratedtransport.com to receive a no commitment hassle free rate quote. With over 11 years of history as well as equipped with a DUNS number, Integrated Transport Logistics can move anything that will fit on a trailer, extra large/overweight INCLUDED!