Industry Question

[artmax]

I came across a story from a shipper; want to see what would be the correct sequence of actions.

The shipper booked a truck from a supposedly decent and large brokerage. The truck arrived and it was what was anticipated; so far so good. The truck crashed (thankfully no one was hurt) but the entire load was deemed totaled. The towing company decided to charge 60k for clean-up and recovery. It turned out that the trucking company had no insurance. Brokerage instantly said that it was not their issue and backed out of the whole agreement. The towing company started going after the shipper for the clean-up & recovery charges.

The shipper wants to sue the brokerage which in turn says to talk to the trucking company; which I would assume has dissolved. Is the shipper on the hook here? Is the brokerage for lack of due-dillegence? Or is the trucker?

 

[Igor Galanter]

All of the above..
Part of a pre - trip is checking all truck and trailer relaited documents including Driver Licence and a Pink Slip ( B/w copy).
No incurance - no go..

So is all other..

Although, I doubt that "large" brokerage can skip that checking..
Usually, software reminding automatically...

 

[misto27]

Being in the industry for a while, mostly brokerage side - one of the most important thing, being a broker, is to not only have a copy of the insurance of the driver, but have a copy with my brokerage company as Additional insured AND certificate holder. THEN have our own insurances. This. Is. Critical. Only having a blank copy of the carrier insurances is not valid.

I would be very curious as to see who's the decent and large broker here....

Was the shipper the actual bill to customer who's paying the broker?

This will probably takes a looonnnggg time to settle / close...

 

[tasuinam]

Being in the industry for a while, mostly brokerage side - one of the most important thing, being a broker, is to not only have a copy of the insurance of the driver, but have a copy with my brokerage company as Additional insured AND certificate holder. THEN have our own insurances. This. Is. Critical. Only having a blank copy of the carrier insurances is not valid.

I would be very curious as to see who's the decent and large broker here....

Was the shipper the actual bill to customer who's paying the broker?

This will probably takes a looonnnggg time to settle / close...

As a carrier we have all our tractors listed on the COI with VIN numbers and the trailers are listed as covered - so when we pick a load and provide the truck # its up to the shipper to confirm it is listed... I do not understand how people get loads without proper insurance

 

[Shakey]

The broker in dreaming in technicolour if they think they're off the hook. They certainly do not have a good risk management team if their insurance is not already involved. .

 

[Freight Broker]

Broker is on the hook for it as much or more so than the shipper is. and a COI means nothing and certainly does not mean the carrier is insured. A COI is nothing more than a feel good document. The real deal is in the insurance policy and in the fine print under the heading EXCLUSIONS. Often exclusions are sweeping, and for all intents and purposes leave you without any coverage.. been there does that. Had one recently that doesn't cover damage, theft or losses of any kind.. although the COI looked neatly typed up and professional. If you really want to cover your backside.. ask for the carrier's policy and take the time to read it. That will really slow up your carrier "on boarding" as they now call it.. but will save you big dollars in the long run. Perhaps in this case the broker got the carrier's COI and figured him to be good to go.. big mistake.

 

[Shakey]

Broker is on the hook for it as much or more so than the shipper is. and a COI means nothing and certainly does not mean the carrier is insured. A COI is nothing more than a feel good document. The real deal is in the insurance policy and in the fine print under the heading EXCLUSIONS. Often exclusions are sweeping, and for all intents and purposes leave you without any coverage.. been there does that. Had one recently that doesn't cover damage, theft or losses of any kind.. although the COI looked neatly typed up and professional. If you really want to cover your backside.. ask for the carrier's policy and take the time to read it. That will really slow up your carrier "on boarding" as they now call it.. but will save you big dollars in the long run. Perhaps in this case the broker got the carrier's COI and figured him to be good to go.. big mistake.

had to pay Bacardi 75K due to someone not following our protocol on dispatching our alcohol loads to carriers. Carrier claimed they were covered for alcohol on their insurance, but answered no hauling alcohol on the list of commodities they supplied broker/insurance so claim denied. We had 100k deductible

 

[Freight Broker]

Ouch.. I feel the pain.. and I mean that literally.. I've had something similar happen to me..

 

[Jim L]

I came across a story from a shipper; want to see what would be the correct sequence of actions.

The shipper booked a truck from a supposedly decent and large brokerage. The truck arrived and it was what was anticipated; so far so good. The truck crashed (thankfully no one was hurt) but the entire load was deemed totaled. The towing company decided to charge 60k for clean-up and recovery. It turned out that the trucking company had no insurance. Brokerage instantly said that it was not their issue and backed out of the whole agreement. The towing company started going after the shipper for the clean-up & recovery charges.

The shipper wants to sue the brokerage which in turn says to talk to the trucking company; which I would assume has dissolved. Is the shipper on the hook here? Is the brokerage for lack of due-dillegence? Or is the trucker?

The tow company's only recourse is the trucking company and the physical items they have in their possession. The tow company did not have any agreement or prior arrangement with the shipper and had no clue who the shipper was until the work was completed. No doubt the towing company hauled the truck and contents to their facility and is waiting for some resolution. They probably hope to contact the shipper to see if the goods were worth any value to the shipper.

The shipper can sue the brokerage for the loss because they entered into an agreement with the broker who then acted on the instructions and provided the truck. The court will be used to identify where the due diligence failed. What did the broker promise for deliverables? Whose responsibility is it to ensure compliance of insurance? Is there a broker/customer agreement? Was this the first time they used the broker or is there a long history of this type of service. Remember, a broker is just an agent for the shipper in this case. The shipper hired the services of a broker but if the services are not spelled out in a contract then it will be very hard to prove they failed to provide the service and at what cost to the shipper. I recommend to get the plate of the truck and the owner of the truck and include them as well in the claim. Someone here misrepresented themselves and quite likely more than one entity. Let the court decide who has the bigger responsibility. Unfortunately it may end up being the party with no money and you're still out of luck.

How much money for goods and freight is involved here?

 

[LrgCar]

Well, that is why all brokers and even carriers that broker should have contingency insurance, it covers your rear end when a carrier doesn't have sufficient insurance and is something most big box shippers are looking for when you onboard. It must have been a new basement broker. no offense to those who started from home but no one in their right mind would operate a business with no insurance for things like these as these cases are more common than they seem.

 

[misto27]

Also depends on the BOL if there is any declared value. If not, most like will got down at 2$/lbs so...

 

[NotForHire]

All of the above..
Part of a pre - trip is checking all truck and trailer relaited documents including Driver Licence and a Pink Slip ( B/w copy).
No incurance - no go..

So is all other..

Although, I doubt that "large" brokerage can skip that checking..
Usually, software reminding automatically...

Yes but depending on how badly they needed to cover the load - they could have bent some rules to make it ship

 

[NotForHire]

Yes but depending on how badly they needed to cover the load - they could have bent some rules to make it ship

That would be negligence on brokers part - if they would have chosen a carrier with insurance this wouldn't
be the case. Broker is an extension or agent of the shipper. Broker has to be acting in the best interest of the customer 100% of the time before his interest in the margin on the load.

 

[Michael Ludwig]

Oh, come on !!!
This one clearly lays at the shipper's feet ... "Let's go out and hire the cheapest broker we can find to source us the cheapest trucks he can find, and we won't bother to learn a single f'ing thing about the logistics processes that make up one-third of our total cost structure". <I feel a Forrest Gump quote should go here>
Everyone knows damn well what's happened here. When the bullets started to fly everyone that could cut & run did so.
The broker in this case isn't a load broker, he's a load pimp. A 46 year old basement dweller that hollers up the stairs "Mom, bring me down a Coke and a couple Twinkies.".
A carrier with no insurance? How does that happen? That's not a common carrier. That's a common criminal.
A shipper with a complete lack of knowledge on the fundamentals of their own supply chain? That's easy pickin's.

Who's on the hook ??? That's easy. The shipper.
Why? Simply because he's the last man standing.

 

[TRKINSURE]

As a carrier we have all our tractors listed on the COI with VIN numbers and the trailers are listed as covered - so when we pick a load and provide the truck # its up to the shipper to confirm it is listed... I do not understand how people get loads without proper insurance

Best practice right here. As a broker - this should be something you demand of your carriers. I have seen multiple losses on brokerage insruance because;
A) vehicle wasn’t disclosed - not covered
B) Driver wasn’t disclosed - not covered

The tow company's only recourse is the trucking company and the physical items they have in their possession. The tow company did not have any agreement or prior arrangement with the shipper and had no clue who the shipper was until the work was completed. No doubt the towing company hauled the truck and contents to their facility and is waiting for some resolution. They probably hope to contact the shipper to see if the goods were worth any value to the shipper.

The shipper can sue the brokerage for the loss because they entered into an agreement with the broker who then acted on the instructions and provided the truck. The court will be used to identify where the due diligence failed. What did the broker promise for deliverables? Whose responsibility is it to ensure compliance of insurance? Is there a broker/customer agreement? Was this the first time they used the broker or is there a long history of this type of service. Remember, a broker is just an agent for the shipper in this case. The shipper hired the services of a broker but if the services are not spelled out in a contract then it will be very hard to prove they failed to provide the service and at what cost to the shipper. I recommend to get the plate of the truck and the owner of the truck and include them as well in the claim. Someone here misrepresented themselves and quite likely more than one entity. Let the court decide who has the bigger responsibility. Unfortunately it may end up being the party with no money and you're still out of luck.

How much money for goods and freight is involved here?

How about the insurance brokerage who knowingly falsified a document (insurance fraud)? Surely the broker received the COI from a brokerages office rather than the client direct?

 

[TRKINSURE]

Oh, come on !!!
This one clearly lays at the shipper's feet ... "Let's go out and hire the cheapest broker we can find to source us the cheapest trucks he can find, and we won't bother to learn a single f'ing thing about the logistics processes that make up one-third of our total cost structure". <I feel a Forrest Gump quote should go here>
Everyone knows damn well what's happened here. When the bullets started to fly everyone that could cut & run did so.
The broker in this case isn't a load broker, he's a load pimp. A 46 year old basement dweller that hollers up the stairs "Mom, bring me down a Coke and a couple Twinkies.".
A carrier with no insurance? How does that happen? That's not a common carrier. That's a common criminal.
A shipper with a complete lack of knowledge on the fundamentals of their own supply chain? That's easy pickin's.

Who's on the hook ??? That's easy. The shipper.
Why? Simply because he's the last man standing.

I agree with all of this. Except the towing bill. That’s on the carrier themselves. I don’t think the towing company has a right to go through the supply chain to collect.
That said, towing companies have their own way of handling business which seems pretty effective.

 

[Freight Broker]

It's not that the carriers don't have any insurance.. that's very rare.. much more common is when carrier has an exclusion in their policy.. effectively rendering them without insurance. Unless the broker works off a park bench and has no assets, it's the broker's problem. I've had similar situations, and the larger shippers have legal departments that have a way of compelling the broker to pay/fix the issue to their satisfaction. In the end its about how much justice one can afford.. Last year I had a load stolen.. although I was as much the victim as the carrier and the driver, my customer.. the nice people who feed me and my family, seemed rather unsympathetic.. in fact they put me on to their customer (technically the owner of the stolen goods) who were not only unsympathetic.. they were brutal.. (website says they're gentle Christians.. but in real life they're over the top hyper aggressive with their lawyers already lined up against me).. So I paid the 32 K claim out of pocket (how's that for a basement broker) and successfully sued the carrier.. Do you believe that a shipper like Ford or GM etc will lay down and take the loss? NOPE. In my case, had I not paid the claim and allowed this to drag out they would have litigated me into a parallel universe, and that's of course after losing the account.

 

[Michael Ludwig]

You're talking about a legit load broker. You can pretty much bet the broker in this case isn't legit. I can think of a few brokers that are "big" but far from legit.
Gentle Christians ... Hahaha ... you ever meet a Gentle Christian's lawyer? S/he's usually a Gentle Christian too, but their religion has absolutely nothing to do with their chosen career path ... LOL
Church is on Sunday. Lawyers don't work on Sundays

 

[Freight Broker]

Best practice right here. As a broker - this should be something you demand of your carriers. I have seen multiple losses on brokerage insruance because;
A) vehicle wasn’t disclosed - not covered
B) Driver wasn’t disclosed - not covered


How about the insurance brokerage who knowingly falsified a document (insurance fraud)? Surely the broker received the COI from a brokerages office rather than the client direct?

The COI doesn't list the fine print and the exclusions.. and those two are what cause all the trouble. I've gone one step further.. I ask for the a copy of the carrier's insurance policy.. the whole thing. Some won't give it to me which ends it right there.. others are more forthcoming.. I take the time to read it.. I've read enough of them now to ferret out the problem areas pretty quickly. A few of them have exclusions which pretty much render the entire policy worthless. Others.. well.. if you're interested in a career as a stand up comedian.. offer enough material for an entire year of laughs..

 

[Rob]

You're talking about a legit load broker. You can pretty much bet the broker in this case isn't legit. I can think of a few brokers that are "big" but far from legit.
Gentle Christians ... Hahaha ... you ever meet a Gentle Christian's lawyer? S/he's usually a Gentle Christian too, but their religion has absolutely nothing to do with their chosen career path ... LOL
Church is on Sunday. Lawyers don't work on Sundays

Christians will pray for you Sunday and prey on you the rest of the week.