Fighting Fraud in Transportation: What your broker may not be telling you
The Bad Seeds
It happens in every industry, logistics is not isolated from fraudulent activity. In fact, you could say that freight brokerages have quite a reputation when it comes to misbehavior. It happens when a bad seed gets the idea to set up a phone and a computer to begin accepting freight from poor unsuspecting manufacturers with the intent to scam everyone involved. Let's call this imaginary freight broker B.S.B. for Bad Seed Brokerage. They've set up shop and begin soliciting business from manufacturers, retailers, and other shippers whose ears perk at B.S.B.'s promises. Guaranteed availability? You can beat my current provider's price by 10%? Sounds great!
Bam! Hook, line, and sinker. B.S.B. has their first load. Next, they arrange a poor unsuspecting trucker to haul the load. His ear perks to B.S.B.'s promises, too. Guaranteed quick pay? You can increase my take home by 10%? You can get me this load every week? Bam! You've got yourself a truck!
Who Ends Up Paying?
Did you ever hear the expression when rolling with pigs in the mud, you both get dirty and the only one that had any fun was the pig? It's kind of like that when you deal with B.S.B., they're the pigs that laugh all the way to the bank as they cash their check from the shipper, skipping out on the trucker's bill. They'll get a new phone number and set up shop again, pulling scam after scam until they're caught.
The trucker has two choices, and both options cost him time, headache, and potential lost wages.
1. They can submit their invoice to the shipper and insist on payment, and the shipper is then forced to pay twice for the same shipment. Bet that 10% savings doesn't look so great now, does it?
2. They can file against B.S.B.'s Surety Bond. That's a little like an insurance policy for those who work with freight brokerages. It's required by law by the FMCSA in order to legally operate as a transportation broker, and helps to fight fraud in our industry. The carrier can file a claim against the bond in order to receive their settlement. Only $10,000 is required by law, but if New Hampshire Rep. Frank Guinta gets his way, it will be increased to $100,000 by the proposed bill H.R. 2357: Fighting Fraud in Transportation Act of 2011. Trinity holds a $250,000 Surety Bond just to remove any shadow of doubt about the type of company we are. We represent honesty and ethics in the workplace and in our dealings with our shippers and contracted carriers. Trinity wanted to set our business apart from the bad seeds out there, and we demonstrated it by investing in $240,000 more than what was required of us by law.
Trinity is a 5 Diamond Broker, the highest rating possible.
Our MC# is 205157
Trinity started out as a freight brokerage and has since emerged to offer much more to our clients than just arranging movement of their truckloads and LTL's (less-than-truckload). We're now into freight management and providing cloud software services to enhance visibility, reporting, and automation. With our roots firmly entrenched in freight brokerage, however, its important to educate our customers and motor carrier providers on exactly what constitutes a good freight broker from a bad one.
The Tell Tale Signs-How to Spot a Bad Seed
- How long have they been in business?
- Are you insured by surety? Ask for a copy of their bond and check it, too.
- Who vouches for them?
- Are they members of the TIA?
- What's their credit history like?
Think closely before you select your chosen freight broker. At your request, we'll send you a free copy of a white paper that reviews 10 Questions to Ask potential freight brokers. I also invite you to check out a leading industry blog about this topic written by trucking advocate and activist Allen Smith.