2
ontario load broker certificate
- Thread starter LADYCHAMPAGNE
- Start date
30
The requirement for a load broker to hold a load brokers certificate in Ontario has been gone for the past few years. Any list would be out-of-date by now, if one still exisited. You could try the NTBA web site for a listing of their members.
20
I have a copy but it is now 3 years out of date, as LBC requirement ended when the Truck Transportation Act was repealed in Jan 06
2
10
Trust requirement
Load brokers and CARRIERS are requried to hold funds in trust if they broker a shipment. Most people do not do this by the letter, however should the company go bankrupt, the owner can bear personal liability if the trust account doesn't contain the required funds. Keep in mind though, if the money was not received "in trust" from the customer, they probably don't really owe it to you either. That's the downside.
The broker or carrier can also contract out of this requirement with the actual carrier who moved the shipment if they agree.
Load brokers and CARRIERS are requried to hold funds in trust if they broker a shipment. Most people do not do this by the letter, however should the company go bankrupt, the owner can bear personal liability if the trust account doesn't contain the required funds. Keep in mind though, if the money was not received "in trust" from the customer, they probably don't really owe it to you either. That's the downside.
The broker or carrier can also contract out of this requirement with the actual carrier who moved the shipment if they agree.
Broker's Trust Account
I, like some other brokers don't use a trust account. My reasons ???
I usually end up paying carriers before I collect the funds from the customer. If the payment to our carriers were to come only from the trust account, then they would have to wait to get paid until I get paid, unless I make deposits into the trust from my personal funds. This of course would result in very complicated book keeping,unnecessary additional banking fees, and incredible forensic accounting and legal fees in the case of business failure, where I would be trying to avoid director's personal liability.
I just like the low cost simplicity of being ethical, and not taking more from our operating accounts than we earn, AFTER we collect from our customers, and leaving more than enough to finance all our activity for at least sixty days. Even though the surplus is ours to do with as we see fit, if I want to go on vacation, or make a large purchase and don't have sixty days operating capital available, then I just can't afford my vacation, new bike, or what have you.
I, like some other brokers don't use a trust account. My reasons ???
I usually end up paying carriers before I collect the funds from the customer. If the payment to our carriers were to come only from the trust account, then they would have to wait to get paid until I get paid, unless I make deposits into the trust from my personal funds. This of course would result in very complicated book keeping,unnecessary additional banking fees, and incredible forensic accounting and legal fees in the case of business failure, where I would be trying to avoid director's personal liability.
I just like the low cost simplicity of being ethical, and not taking more from our operating accounts than we earn, AFTER we collect from our customers, and leaving more than enough to finance all our activity for at least sixty days. Even though the surplus is ours to do with as we see fit, if I want to go on vacation, or make a large purchase and don't have sixty days operating capital available, then I just can't afford my vacation, new bike, or what have you.
10
10
Activet,
Well put !... I handle my brokerage the same way. While it's nice to have the money in the account, it's priority is definately getting the carriers paid on time. This alleviates lots of calls, if not all from people looking to collect money, not to mention its easier to pick who you are paying early, than who you can afford to pay late.
Excellent point about the funds in trust. I inquired 2 yrs ago about this and was told it was not necessary. I also attempted getting a surety bond, but did not have any luck with any of the banks or any laywers knowing how to set this up.
Well put !... I handle my brokerage the same way. While it's nice to have the money in the account, it's priority is definately getting the carriers paid on time. This alleviates lots of calls, if not all from people looking to collect money, not to mention its easier to pick who you are paying early, than who you can afford to pay late.
Excellent point about the funds in trust. I inquired 2 yrs ago about this and was told it was not necessary. I also attempted getting a surety bond, but did not have any luck with any of the banks or any laywers knowing how to set this up.
surety bond
You can get a surety bond from an insurance underwriter. Just call your insurance provider, and they should be able to help you.
Another point about insurance - contingent cargo insurance for 3pl's specifically. I used to have contingent cargo insurance to protect our customers as well as ourselves. The cost increased by about 250% 3 years ago and I declined renewal. Not just because of pricing but the restrictive covenants contained within the new policy precluded just about any scenario whereby a claim could be advanced. I could not even tell our customers of it's existence - that is, not to be able to use it as a selling point. So, the decision was made to self insure.
You can get a surety bond from an insurance underwriter. Just call your insurance provider, and they should be able to help you.
Another point about insurance - contingent cargo insurance for 3pl's specifically. I used to have contingent cargo insurance to protect our customers as well as ourselves. The cost increased by about 250% 3 years ago and I declined renewal. Not just because of pricing but the restrictive covenants contained within the new policy precluded just about any scenario whereby a claim could be advanced. I could not even tell our customers of it's existence - that is, not to be able to use it as a selling point. So, the decision was made to self insure.
30
I used to maintain a contingency cargo policy as well, until like yourself, our premium became prohibitive. We now employ a strict policy of ensuring all of the carriers we use have bona fide insurance and we request to be added as an additional named insured on their policies. In most cases, any claim we have experienced to date has been rather small, usually less than either the contingency deductible or the deductible of the carriers cargo policy. This however is what causes us the most grief. The $500.00 - $1000.00 claims that some carriers refuse to mitigate. I quess that as long as the cost of these claims is less than the premium of a contingency policy, we're ahead in the game. My concern however is that as the economy gets tighter, some carriers may become less and less inclined to assume their responsibility in this type of smaller freight claim.
