September 21, 2016
7 Key Considerations When Choosing A Trucking Freight Brokerage
According to the American Trucking Associations (ATA), the trucking industry delivers 70% (9.2 billion tons) of all the freight delivered to businesses and individuals across the US. To achieve this goal, the trucking industry relies on more than 3 million drivers and almost 3 million heavy-duty class-8 trucks that consume over 37 billion gallons of diesel annually. In addition, truckers rely on brokers to fill their vehicles with freight, especially during so-called “empty legs.” However, selecting a freight brokerage out of the thousands operating in America can be difficult. With that in mind, here are seven key considerations when choosing a trucking freight brokerage:
Operating Authority (MC number)
The Federal Motor Carrier Safety Administration (FMCSA) requires businesses that arrange transport of federally regulated commodities to have interstate “Operating Authority” or MC number. Operating Authority is important because it determines not only the type/nature of operations a cargo brokerage can run, but also the services it can offer. For example, a brokerage could have the authority to arrange for transport of all types of freight other than hazardous materials. More importantly, the MC number determines the type and level of insurance coverage that a brokerage must have.
Besides Operating Authority, a freight brokerage should have a valid license from the FMCSA. This is particularly important because, to obtain this license, a freight brokerage company must prove that it understands FMCSA’s commercial trucking and safety regulations. For instance, the FMCSA has the responsibility of ensuring that truckers comply with the Federal Motor Carrier Safety Regulations (FMCSR) regulations when transporting hazardous materials. As such, a licensed broker would have in-depth knowledge of these regulations and would be able to link you up with a suitable carrier.
All business entities categorized as cargo brokerages or freight forwarders must comply with the FMCSA’s insurance requirements. To start with, every freight broker must have a surety bond worth $75,000. In addition, brokerages that arrange transport of household goods must have cargo insurance of $5,000 per vehicle and $10,000 per occurrence. Freight forwarders should also have public liability coverage that encompasses bodily injury, property damage, and environmental restoration. However, the FMCSA says cargo brokerages can request public liability coverage waiver, which means this coverage is optional. It is important to note that you can verify the insurance, Operating Authority, and license status of a freight brokerage via the FMCSA’s QCMobile app that you can download from Apple’s iTunes App Store as well as Android’s Google Play Store.
Look for a brokerage that refers cargo to trucking companies that comply with environmental protection standards/regulations set by organizations including the Environmental Protection Agency’s (EPA) Office of Transportation. A good example is the EPA’s National Clean Diesel Campaign (NCDC) that is focused on reducing pollutants associated with diesel engine exhaust. These pollutants cause respiratory problems like asthma and pollute the environment as well.On its part, the NCDC program offers grants and rebates that are legally approved by the Diesel Emissions Reduction Act (DERA). It is also wise to choose a brokerage that has adopted the EPA’s SmartWay program, which is designed to improve the sustainability of supply chains via initiatives like benchmarking.
Go for a freight brokerage that has solid reputation. To find out more about the reputation of a company, start by checking the rating of the brokerage on the Better Business Bureau (BBB) website. While at it, also check reviews published by past clients on business review sites such as Yelp. You should also search for posts related to the brokerage on social networking sites including Facebook, Twitter and LinkedIn.
Choose a cargo forwarding company that has been transporting freight for several years. This is because freight transport is a complex operation that may involve multiple third parties, crossing state borders, and processing damaged cargo claims. Furthermore, unforeseen weather changes could disrupt transport schedules and inconvenience cargo owners greatly. Luckily, a company that has been in operation for years can easily resolve such challenges whenever they arise.
The standard practice is to shop around and compare freight transport quotes from several trucking freight brokerages. This is important because freight brokerage costs generally vary depending on distance (from pickup to drop off location), cargo weight, truck size, as well as accessibility of both pickup and drop off locations.
When shopping for a trucking freight brokerage, factors that you should evaluate carefully include cost, FMCSA license, insurance coverage, Operating Authority, experience, reputation, and compliance with environmental protection regulations/standards.