A Poll: Should commercial carriers be allowed access to Facility Insurance?

[Michael Ludwig]

One more thought ... In light of the Montgomery decision in the U.S., are you, as a load broker, content with taking on a carrier that is Facility Insured, knowing full well that the voluntary insurance market has deemed that carrier to be too risky to insure?

BTW ... there has to be more than 18 people that have an opinion on this subject. You don't need to publish the opinion ... just vote your conscience.

 

[JACKBURTON]

as a load broker, content with taking on a carrier that is Facility Insured, knowing full well that the voluntary insurance market has deemed that carrier to be too risky to insure?

If they offer a sweet rate? loollll. Some brokers will never learn.

 

[Nawk]

One more thought ... In light of the Montgomery decision in the U.S., are you, as a load broker, content with taking on a carrier that is Facility Insured, knowing full well that the voluntary insurance market has deemed that carrier to be too risky to insure?

As a guy that works for a company that is both a sizeable carrier and a broker...

The Montgomery case has only changed one part of our carrier vetting... we're more careful about documenting things and how often carriers are reviewed. We've always been cautious and properly vetted who we give freight to.

With respect to Facility insurance... well, that's (in most cases) the end of the road isn't it?

If an insurer deems a company too risky to insure... surely, there's a trail of documented violations that lead to that decision. As a freight broker... if you look at any data at all when onboarding or reviewing a carrier... the signals are there.

OOS violations tell the story of who a carrier is, the type of drivers they hire, how they maintain their equipment and how they operate.

 

[loaders]

Without a doubt, risk management has taken on an even greater role in the day to day activities of most load brokers. In the “olden days” one’s biggest concern was pretty much confined to whether the customer was going to pay the freight bill. After the de-regulation of the trucking industry, the marketplace exploded with hundreds of new entrants, and the concern then was trying to separate the professional operators from the fly by nights.
Today, the risks to your business are greater than ever. Fraudulent carriers. Carriers operating on shoestring budgets and ignoring maintenance, hours of service, and other rules and regulations. Back soliciting your clients, double/triple brokering your freight. The days of simply ensuring your suppliers had an insurance policy and proper operating authority are long past. A carrier with auto insurance issued by the Facility Association should be regarded as a “red flag” when vetting a new supplier, along with out of province phone lines and addresses, operating from a residential area, a lack of credible credit references, poor or out of service Safer scores, bad CVOR scores….the list has almost become endless!

 

[Jim L]

Without a doubt, risk management has taken on an even greater role in the day to day activities of most load brokers. In the “olden days” one’s biggest concern was pretty much confined to whether the customer was going to pay the freight bill. After the de-regulation of the trucking industry, the marketplace exploded with hundreds of new entrants, and the concern then was trying to separate the professional operators from the fly by nights.
Today, the risks to your business are greater than ever. Fraudulent carriers. Carriers operating on shoestring budgets and ignoring maintenance, hours of service, and other rules and regulations. Back soliciting your clients, double/triple brokering your freight. The days of simply ensuring your suppliers had an insurance policy and proper operating authority are long past. A carrier with auto insurance issued by the Facility Association should be regarded as a “red flag” when vetting a new supplier, along with out of province phone lines and addresses, operating from a residential area, a lack of credible credit references, poor or out of service Safer scores, bad CVOR scores….the list has almost become endless!

Yes, but until the person paying the freight (BFO) to either the broker or the carrier realizes the same pain there will be no change.
That is the problem here, the BFO is not getting burned enough. Until that guy says, enough is enough, I'm getting a better broker/carrier and I'm changing my vetting process, the money is still out there. The cycle has to repeat itself a couple times until the BFO gets serious. Eventually the 'follow the money' principal will make it down to the BFO and they will get implicated for not vetting the proper brokerage or carrier and they will change their ways. I'm surprised that Amazon hasn't been named yet (at least to my knowledge)

I have one 4PL that gives me freight. I compete on lanes with some fairly sh*&t* carriers. The 4PL ran me through the wringer to confirm my scores, insurance, equipment age etc but once in the system I questioned about how those carriers with conditional CVOR and 40%+ OOS scores on their SMS are competing with me and the answer was, 'Upstairs decision'. Hopefully 'Upstairs' sees the Montgomery issue and decides that the 4PL is worth it to ditch those other carriers so I don't compete with them.

 

[loaders]

Like yourself JimL, we have seen this scenario, again and again and again. Whether it is the traffic department of a large multinational corporation or a “transportation consulting” firm, they all sing the same song about corporate responsibility, only hiring ethical suppliers, ensuring everyone can meet or exceed their KPIs, etc., etc. However, when it comes time to award the lanes, all of that seems to go right out the window and the lowest bidder gets the freight. Never, have I seen anyone other than the party with the lowest rate get the business in these situations. It has been my business plan since inception, that we always try to have a client list comprised of many, many smaller or mid sized customers, as opposed to a handful of large ones. Lose one or two and it won’t kill you. Plus the level of loyalty shown by large customers is usually low and they will leave you for $50.00.