Bottom Line
A quick guide to working with brokers
Here are OOIDA's top 10 tips for steering you in your day-to-day business dealings with brokers.

By OOIDA staff

 

It is important to always remember that there are valuable resources available to assist you in choosing legitimate brokers to do business with. For instance, you can check the status of a broker’s authority on the FMCSA Web site www.fmcsa.dot.gov. If you do not have access to a computer, you can call either 866-637-0635 or 202-385-2423.

Additional information that can be obtained at this site is bond and trust information. Go to the insurance screen. Here you can obtain the bond company’s name and telephone number. Check the status of the bond before taking the load. If the broker’s authority is not active, don’t take the load.

Credit reporting services and tools are also available, such as RTS Credit Services, available at RTSCredit.com or 800-506-7438. By the way, at this time RTS offers five free credit checks.

OOIDA also has our very own “Check’s in the mail” report, which is available only to the Association’s members through our members-only section at www.ooida.com. As a continuing service to its members, OOIDA provides information related to companies from which OOIDA members have experienced late or nonpayment for loads hauled.

Key things to remember and check before accepting a load through a broker

  • Ask for at least three references. These should be carriers that have hauled for this broker consistently for one year. Check them.
  • Do not move until you have a signed rate confirmation.
  • Make sure the confirmation is complete with any additional charges you may incur, such as lumper fees, detention time, etc. Include a fuel surcharge to compensate for spiraling fuel costs. Once you sign and return the confirmation, it acts as your contract for that load.
  • Use caution when asked to sign a broker/carrier agreement. Avoid it if possible. If you decide to sign it, read it carefully. Make sure your position is stated. You as the carrier want no relationship between yourself and the broker. Under no circumstance is the broker acting as your agent nor are you acting as the broker’s agent. If the broker/carrier agreement does not say this, write it in, initial and date the change.
  • Make sure all information is correct on the paperwork you receive pertaining to the load. You need the correct broker name, correct bond information and so on.
  • Never wait for payment past your agreed-upon payment date. Chances are if they are not paying you on time, they are not paying any drivers on time. The bond is only $10,000; it does not take long to exhaust it.
  • Any time there is a change while you are en route that concerns your pay, get an amended confirmation before proceeding (i.e., layover, extra stops, etc.)
  • When hauling government loads, make sure you call ahead for delivery time verification.
  • Take steps to ensure that the broker is paying you the percentage that was agreed upon. It’s in Title 49 CFR 371.3 of the Federal Motor Carrier Safety Regulations. Here’s the language:

    Under Title 49 CFR 371.3 Records are to be kept by brokers.
    (a) A broker shall keep a record of each transaction. For purposes of this section, brokers may keep master lists of consignors and the address and registration number of the carrier, rather than repeating this information for each transaction. The record shall show:
    (1) The name and address of the consignor;
    (2) The name, address, and registration number of the originating motor carrier;
    (3) The bill of lading or freight bill number;
    (4) The amount of compensation received by the broker for the brokerage service performed and the name of the payer;
    (5) A description of any non-brokerage service performed in connection with each shipment or other activity, the amount of compensation received for the service, and the name of the payer; and
    (6) The amount of any freight charges collected by the broker and the date of payment to the carrier.
    (b) Brokers shall keep the records required by this section for a period of three years.
    (c) Each party to a brokered transaction has the right to review the record of the transaction required to be kept by these rules.

You can use this regulation to keep a broker honest.

Remember 371.3 (c) states that each party to a brokered transaction has the right to review the record of the transaction required to be kept by these rules.

Whether the load was flat-rated or a percentage, the regulation still gives you the right to review the record. If this rule is ignored, it is enforceable under private right of action, Federal Law 49 USC 14704 (a) and 14707. This rule will allow you to obtain a court order requiring brokers to comply with regulations.

In the event you have to go to court to get this information, private right of action also allows a court to award reasonable attorney fees, which the court can impose as part of the costs of the action.

  • Remember – you need everything in writing and keep copies of all paperwork. LL
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Aug/Sept Digital Edition