As the president of a brokerage company that has been in business for more than 20 years, I am all in favor of raising the surety bond level to $500,000. However, unless it is mandated by the Federal government, it’s not going to do any good. Let’s face it, the industry is full of unscrupulous people who will steal from everyone they can: shippers, carriers or brokers!
Our company has a program for building long-term relationships with our carriers. We pay competitive rates. We pay our trucks weekly. And we treat our contracted carriers with respect. I hear a lot of grumbling about bad brokers. In most of these instances I am amazed at how little care has been used to check out the broker. I think that everyone needs to understand there are good and bad brokers and carriers.
I would suggest the following steps in checking out a brokerage:
1. Verify active surety bond and brokerage authority.
2. Ask for and check credit references.
-current payment (look for paying carriers within terms)
-credit rating from credit service
-years in business (less than 1 year, treat with caution)
3. If they are less than one year-old or you can’t find out much about them, ask for a 40% advance. Negotiate advance amounts before you commit to load.
4. Execute a written contract with every brokerage.
5. Confirm if they are a member of the TIA (Transportation Intermediary Association). Most reputable brokerages are.
6. If the load pays above the market, be cautious. It doesn’t matter if they are offering $4.00 per mile, if you don’t get paid the rate is zero.
It is my theory that when you begin checking the “scam-artist” out, he will run for cover. New carriers check us out every day. We encourage and appreciate their desire to do things right. This level of consideration extends to the freight they haul for us.
Don’t make yourself an easy target for those unscrupulous brokers out there trying to make the easy buck.
Mel Winstone
President of Ryan Transportation Service, Inc.
February 25, 2008 at 4:00 pm |
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Peter Quinn
April 7, 2008 at 5:56 pm |
Very good article! Thanks.
I think that the Guaranteed Payment Program (GPP) that TIA will review at their annual meeting is a start.
GPP will guarantee participants payments up to $100,000. maybe not $500,000 that most of us would like, but at least would be something to motivate the industry in increasing the surety bond level and to recognize those who voluntarily will raise the bar.
What do you think of the TIA Guaranteed Payment Program (GPP)?
May 7, 2008 at 3:00 pm |
We have a lot of respect for the T.I.A. But as someone recently pointed out, the brokerages that represent high credit risk will not participate in the program for obvious reasons. Basically we are in favor of any initiative that promotes high standards and ethics in the industry. I give the T.I.A. an “A” for effort.
February 22, 2009 at 6:56 am |
Its one of those sitaution that a broker offers a load that sounds to good to be true, then it probably is. Check, double check and triple check becuase the broker company might fall from an A credit to a F credit overnight or evenl possibly out of business. Companies need to realize even their brokers with long term relationship, with the industry such as it is, should check the company once a week. Do not let them get so far out on monies that you can not recover. Taking a hit for 20,000.00 right now can mean the end for a company. Realizing the company does not get much of the monies at all. I believe if double brokering would stop and get all the hands out of the pot then the industry might pick up and be okay. Even some of the bigger companies double broker, but there is always one that does not pay!!!!!
June 19, 2009 at 3:27 am |
which are the best brokers?