How to Select a High Quality Freight Broker

A freight broker can be used for many reasons. Perhaps you are looking for a cost-effective way to ship an item to your customer or have bought an item from another country. This guide will help you choose a reliable freight brokerage company, regardless of the reason.

This article will help you to choose a freight broker by highlighting the legal, insurance and quality aspects.

LEGAL

Are they able to provide operating authorities and a Freight Broker Bond?

The FMCSA (Federal Motor Carrier Safety Administration), requires freight brokers to have either a BMC84 or BMC85 freight broker bond of $75,000 U.S. Dollars by October 1, 2013. This is to ensure that they maintain active operating authority. A surety bond is provided by insurance companies that will guarantee the 75K if the broker defaults. To get this insurance, the broker (insured) must pay a $1,000-$12,000 yearly premium. The BMC-85 is an insurance company that is removed. It can be set up by the broker or bank by depositing $75,000 in a trust fund. Trucking companies have the advantage of having a better guarantee they will be paid. A less well-respected broker won’t take money from customers and then disappear without paying them. Similar benefits are available to shippers in that they don’t have to worry about the possibility of the trucking company coming after them after they have paid the broker. The broker must be financially sound before they can start. This has reduced fraud in the industry. This works fine if you are in the USA, or using a U.S.-based broker. But if you live in Canada it is a different story. Quebec is the only Canadian province that regulates freight brokers. Brokers must be registered with CTQ. The FMCSA required that Canadian brokers obtain the bond in order to be granted active authorities. Many Canadian brokers are now in a gray area because the U.S. insists they require it, while Canada claims they don’t. It is difficult to find an American or Canadian insurance company that will quote a bond or offer it at a fair price for a Canadian broker who wants to obtain one. It is a good idea to have it for all brokers. And, chances are that a Canadian broker who has obtained a bond is financially secure.

INSURANCE

Are they covered for your goods during transport?

There is a good chance that the Freight broker company or trucking company you hire will have enough insurance to cover your goods in case of an accident. However, it is advisable for the broker to also have insurance. Your broker should have proper insurance to cover you in case of expired insurance, or if the broker fails to verify the trucking company’s insurance. You want to be sure that you are covered in any way possible. Reputable freight brokers will have this insurance and likely give you a copy before you can ask. A minimum of 1,000,000 liability and 250k cargo are essential, unless your goods have a higher value. An errors and omissions insurance policy is also a good idea.

REFERENCES

Are there any non-biased referrals or references?

Good freight brokers will have Google reviews about previous shipments. However, these reviews may be more negative than positive as someone who had a great experience is less likely to give a review. A friend or colleague who is involved in shipping would be a good place to start. You can be sure they have dealt with freight brokers before and will be able point you in the right direction. Although references may be provided by the broker, it is unlikely that they will be of any use unless it comes from a reputable company.

Experience

Is this something the freight broker has done before?

It is also important to check if the broker has experience in freight brokerage. It is important to ensure that they have experience in freight brokerage. Moving freight is not as easy as calling a trucking firm and waiting. Although they may be familiar with moving dry van freight, they might not have any experience moving agricultural equipment. There are many requirements for shipping different types of freight. You will need to ensure that the broker is experienced in international shipping. Mistakes can cost you thousands of dollars. Any question about freight shipping will be answered by an experienced broker.

These are just some of the important areas you should consider before hiring a freight broker to transport your freight. If you score well in these four areas, your shipment will be moved quickly and on-time.