Settling a Broker vs Carrier Dispute | Final Mile 60

Nate Cross & Ben Kowalski answer your freight brokering questions and discuss:

• Broker vs Carrier Dispute on Layover and Redelivery Fees
• Freight Broker Insurance
• Broker vs Carrier MCs

Support Our Sponsors:
QuikSkope - Get a Free Trial: Click Here
Levity: Click Here
Bluebook Services: Click Here
DAT Freight & Analytics - Get 10% off your first year!
DAT Power - Brokers & Carriers: Click Here
DAT Express - Brokers: Click Here
Truckers Edge - Carriers: Click Here

Recommended Products: Click Here
Freight Broker Basics Course: Click Here
Join Our Facebook Group: Click Here
Check out all of our content online: Click Here

Chapters

• 0:00 Handling Delays and Disputes in Transportation
• 13:17 Effective Communication in Freight Shipping
• 17:17 Insurance and Authority for Brokering Freight
• 21:34 Understanding Contract Languages in Freight

Transcript

Speaker 1: 0:19

Welcome back for another edition of the Final Mile. We're going to answer your questions. We've got a one of our listeners sent us an email a week or so ago and we promised to break it down for him on the show today. And we've got a couple other questions that came from our Facebook community. So make sure you're hopping in there. If you're not. There's a link in the show notes or description box, depending on where you're watching or listening, and please take a moment to check out the sponsors to help support the channel. And you can see all of our other content at freight360.net, including the freight broker basics course.

Speaker 1: 0:51

All right, we'll get right into it without further ado. Here's the email, here the question. So, um, this is a motor carrier, all right. And he says uh, hey, nate, on august 13th we had a job contract to move some stuff from paris, california, to vernon, california. We were supposed to pick it up at 11 am and deliver it by 4 pm the same day. So just a you know, one pick, one drop, same day transit.

Speaker 1: 1:18

Everything was all set, emails were exchanged and it seemed pretty straightforward until we showed up. We got there at just before two o'clock but the receiver, brian, had no space for our drop. The broker knew about the issue and tried to email us get empty. But after waiting for about two hours, brian told us he still couldn't take the delivery by then. The broker couldn't do much and we ended up having to secure the load overnight. So basically to take you back. It was supposed to be there by four. They got there two hours early. The receiver had no room, so now we're dealing with this. Driver never got unloaded and they have to stay there overnight.

Speaker 1: 1:58

So now the next morning at 5.38 am we contacted the broker to either pick up his cargo or give us new receiving confirmation and an updated rate confirmation for the additional services and let us know when there would be space. But the broker ghosted us for hours without a solution. He initially wanted us to redeliver for free, but we had to stand our ground. We asked him multiple times to pick up his cargo. He kept refusing and tried to force us to redeliver for just $100. In the end we kept the freight in our truck from August 13th to August 15th 2024. We delivered with clean bills. But right after he reported us on MyCarrierPortal and TIA Watchdog.

Speaker 1: 2:41

These platforms are known for their power in the industry Reports like these can really hurt small operators who rely on the spot market. I'm all for keeping the bad apples out and protecting clients and shippers cargo, but these platforms need to make sure they're used correctly and fairly. If they're misused, they could become useless. I'm not asking anyone to take sides. I just think this is a problem in the industry that so many can relate to. Brokers and carriers, owner operators included, could definitely learn from this. We need to find a way to handle these situations better so everyone can benefit. All right, so so that I understand this.

Speaker 2: 3:15

Yeah, so like the carrier went to go deliver the load like normal and they didn't have space, so there's a layover to the next day. The part I was a little bit lost on was was it basically just a conflict because the broker didn't want to pay the layover fee?

Speaker 1: 3:28

So this sounds to me there's two sides of this story and that's why I wanted to break it down, right, the broker is basically saying you held our load hostage and the carrier is saying you're trying to not pay us for doing our job. So it was supposed to deliver on. Let's see. Let's look at what day of the week this was. August 13th would have been a Tuesday, all right, so it was supposed to deliver on a Tuesday. It ended up not delivering until Thursday, so two days later, all right. So they the carrier. So I'm going to tell you where I think.

Speaker 1: 4:08

Well, first of all, let me give you Ben, you and I had a conversation yesterday with Alex from Expedite All, and we're going to have him on the show later this month and we'll talk about some of this stuff. But he brought up and I won't name names on the vetting site. It's not any of the ones that we ever endorse, but, uh, he mentioned that, like you know, you get some of these smaller like, so they do like a lot with sprinter vans and it's expedite stuff, and the issue is that, like some of the the vetting platforms, they're really designed for full truckload, right, and if you're dealing with like a sprinter van who's not held to the same standards and regulations as a, you know, is a full 18 wheeler Right. Some of these vetting sites are going to look bad and the example he uses like you got this carrier. That basically, is like I'm being told that no broker is going to load me because I'm being rated as an F on this.

Speaker 1: 5:09

We won't name it that insight and they're being rated as an F, which sounds really bad to any broker, but they're being rated poorly because they're trying to do a one size fits all fitting thing Right. And the same thing applies with if there's a, if there's a report done on, like highway, for example. What I like about highway is that if you see a report of double brokering or hostage load, you have the option to contact the publisher and get their story All right. Highway also has the ability to they're going to vet reports before they publish them to make sure that someone's not just fraudulently, you know, putting these bad reports out there for the universe. The same thing goes with like Google reviews.

Speaker 1: 5:57

Whenever my brokerage that I work for appears for a while logistics. Whenever we get a bad Google review, we answer every single one of them and I can tell you every single time if our rep was in the wrong, we make that carrier whole. If the carrier was in the wrong, we respond to it and make it known that this carrier is leaving a, you know, basically an unwarranted Derogatory yeah, yeah a bad.

Speaker 1: 6:20

You know their review is not substantiated. Ok, yes, now back to this issue here. All right, the the broker is in the wrong for it. There's a big breakdown of communication here. Clearly the broker didn't communicate. And again, I'm going just based off of the information we have in this email. I don't know what actually happened, we're just, we're taking this at face value, all right. Email I don't know what actually happened, we're just we're taking this at face value, all right. The broker, um, didn't do much to take care of this carrier. As far as the scheduling, the carrier was there early, I get it. If they got there two hours, um early, then that's kind of on them, right. But after that point, if the receiver is saying like we don't have room and the carrier is not, not, or the broker is not doing anything about it, now the broker has some responsibility here. In my opinion, for sure you could be talking detention initially and then, when the receiver says, come back the next morning, that's definitely a layover, right For sure.

Speaker 1: 7:19

We're not talking. A free redelivery the next morning we're talking like this could be 500 bucks. It depends what it is. Is it a specialty Like RGN or something like that? Or is it just standard drive-in, who knows? But now what?

Speaker 1: 7:36

What confuses me here is the. So the broker refuses to, you know, agree to a reasonable rate to redeliver. Now the carrier is deciding well, I'm just not going to deliver it until you give me the right confirmation that I want to see. This is where we get into like a gray area, because we don't know, when each person talked to each other, what the back and forth was. But the broker now has an argument that well, you're holding my load hostage, right? I mean there's.

Speaker 1: 8:07

There's an argument to be made on both sides here, correct? What we don't know is what ended up happening where they came to the agreement to then finally deliver it on Thursday. Was there a certain amount of money that was agreed to? No idea, we know it went from free redelivery to only $100 redelivery the next day to two days later the carrier finally delivers it and then gets a bad report against them. So my advice to the carrier would be don't work with that broker ever again. And if you have a bad report against you, I would respond to it in any way, shape or form that you could. Yeah, I think this one again. We don't have all the details, but this is the kind of stuff that will happen. We just did an episode on fraud on the podcast.

Speaker 2: 8:57

I've had a similar scenario happen a few times with a customer that we just fired. They had a detention policy of four hours free and $25 an hour after which our rep didn't make us aware of. And we have a policy where we're going to pay you $50 an hour to the carrier after two hours free and the shipper just would change the appointments without letting the broker know. So like the truck would show up at 10, like oh no, sorry, the point was moved to three and then it would take six hours to unload them. Like I was looking at these last week, there was like at least a handful of these that were like the carrier was there like eight or nine hours and the shipper wanted to compensate them like $50, right, four hours free and then 25 bucks an hour for the next three hours. So it was like seven hours. They want to give them 75 bucks, right. So like I made this and I'm like listen, like we are going to use a industry standard detention policy in this scenario. We're not going to burn these carriers, even though the shipper isn't going to reimburse us, because I think that's the right thing to do. Then the customer argued and said like well, that's not our fault. Like this is our policy.

Speaker 2: 10:08

And ironically, the shipper later in the month is yelling and crying that they can't get enough of their product moved and I jumped into the middle of it and started talking to like the manager of that.

Speaker 2: 10:15

I said, listen, none of our carriers are willing to run more than one load with you guys, because you say you have an appointment, you're moving them and then you want to give them 25 bucks for basically sitting there all day. I'm paying them out of pocket a few hundred dollars just to make it right, but they don't want to come back and I don't want to send any more trucks to pick up any of your loads full stop. I'm like we're just not going to work with you because I can't just eat $300 losses so you can accommodate. You know the loading dock or have issues scheduling and can't seem to like work that out. Like we're not just going to incur this cost or just use a bunch of different carriers and beat them up and then just basically screw them on their time just to accommodate you guys. Like this is an egregious policy. You guys know this. You guys either need to address this. This is why you can't get your cargo moved Like. This is why you're running into issues.

Speaker 1: 11:10

So I'll add this in too, and the situation that we, the story we just told. I don't know how this would play out because we don't have all the details, um, but if you're, if you're a motor carrier and a brokerage is refusing to pay you for your services that you've performed, that is the reason why brokerages are required to have a bond or a trust.

Speaker 2: 11:31

So I have a question for you, because I asked about this and I was told this wasn't correct, but I've heard different things. I've heard, though, that you can't file on the bond for like accessorial charges.

Speaker 1: 11:45

So that is. That's why I'm curious what other, what other discussions were there? What other agreements were there? But I've seen it in the past where I've seen, like the community, I've seen how the bond, the back and forth claim, plays out and we've talked about it here and there. But here's typically what happens the bond company, um, they're not there to like, hear your pissing match back and forth. They're there to look at facts and then figure out from the facts who is responsible to pay what amount. Right, and they and they will say broker, give me all your details, okay, cool. Carrier, give me all your details, okay, cool, all right, broker, you owe this money. Or carrier, you're not entitled to this money.

Speaker 1: 12:29

And it usually ends just like that they're not going to go back and forth, they're going. It's basically like it's like a claims adjustment for an auto accident, like if the insurance company denies the claim and says that no, you know, this policy doesn't cover that. You can't just, you know, say, well, you can't appeal it 30 times, just because you want you know the policy to magically, um, pay out for this. Um, so yeah, that is that's. Another option too is if you have documented, you know, detailed communication that says they agreed to X, y and Z you. There's nothing wrong with you going to file on the bond. It doesn't guarantee you're going to get paid, but it's another option.

Speaker 2: 13:13

You can go towards and this is what I suggested. I think I answered a YouTube question where I suggested I said, look like from the carrier point of view and like we have clients that are carriers, and I say like, hey, if you're working with a new brokerage, like it takes 30 seconds to ask, hey, what is your detention policy and what's your layover policy with this customer, can you just email that over with the rate con right? Ask beforehand. Asking when it's going on is far harder. And now they have leverage and you're negotiating and there's a lot of tension when you're booking the load. Just ask those two questions, have them, put it over in a quick email. Now you don't have to negotiate it, you know they've stated the terms.

Speaker 2: 13:50

And again, if they try to pull some shady thing like it seems like it was kind of happening where the broker, for short at least, didn't want to compensate them a reasonable amount for a whole day layover, then I would email their manager or reach out to the brokerage and most brokerages have more than one person and somebody or a supervisor or a carrier operations team that will address this and then address the broker for doing it. I know the big companies for sure do. And again. Having it in writing, I think, is your best recourse ahead of time. Yep, so at least you're not negotiating this on the fly.

Speaker 1: 14:37

Yeah. And so to add to that, let's say the broker and customer doesn't honor detention because it wasn't their fault. The broker should be then liable for that. But again you should have that conversation like hey, what is the policy for detention and layover, how many free hours, et cetera. But he did say here in the email they had no space for us to deliver it. The broker knew about it and tried to help us, but then the receiver said we can't take it.

Speaker 1: 15:05

So it sounds like it was on the customer for not having the available space and the customer should have authorized layover, re-delivery fees, etc. What might have happened here is the broker's like I'm not going to risk my customer relationship, so I'm going to screw the carrier here. And it sounds like that's roughly what happened. If we have all the details here, um, what we don't know is that this carrier um threatened to hold the load hostage. It doesn't sound like he did, but we don't have all the details, so I'm not gonna I'm not gonna be the carrier or the broker here, because again, we're not.

Speaker 1: 15:41

This isn't like uh, the um, what's that show jerry springer?

Speaker 2: 15:46

it's not the jerry springer show, right, you know what else I would say too, and and I thought about this a lot, even in the past few months with tiring and other stuff. Is it like? I heard this a long time ago? I don't remember where I heard it, but it was like this quote. That was like your success in life is determined by the number of difficult conversations you're willing to have Right, and that like always kind of stuck with me because I think that's true in all of our lives.

Speaker 2: 16:11

But for sure, freight brokers right, because in that scenario all I'm thinking is like that broker more than likely just didn't want to call the shipper and hold them accountable and say like listen, he was supposed to be unloaded yesterday at 10.

Speaker 2: 16:24

We held him over till today. Like we got to give the guy at least three, 50 for layover or two, 50 or something reasonable either didn't or wasn't willing to have that conversation because he's worried about what the shipper is going to say and he's so worried about getting more business that he can't defend the carrier. And I think that's part of our job. You need to absolutely stand behind your carriers when they're doing what you ask them to do. You need to be able to go to the shippers and have that hard conversation or you're not going to last in the industry because the carriers don't want to work with you. You need both. And on the other hand, right it's like, or to your point, maybe the shipper did operate and say, yeah, we'll give you the 350. And then the broker tried to make the 200 bucks off it, or 150 bucks off, instead of giving all the money to the carrier.

Speaker 1: 17:15

Neither of which I think are good, and I don't think brokers should be doing those things for sure. Exactly, exactly, all right, good stuff, uh. We got two other shorter questions we'll just handle here. Answer real quick for uh. Next one here is I need broker insurance or any recommendations. It's been so hard to find um insurance. I mean, uh, it shouldn't be very hard to find and you shouldn't be hard to give your money to somebody to use their services or get an insurance policy written. What I will say is, if you are a freight broker looking to get insurance, we always recommend a insurance brokerage. You just put in there.

Speaker 2: 17:51

Is this? So this is Cameron Pesci. Yeah, we've had him on the show. He was actually going to be on this week. He's going to work on getting us some updates on policies related to fraud and then we'll have him on. But we'll put a link in the show notes where you can just literally use this. We have a good relationship with them. He can get you some pretty good pricing team-wise, get you some options. That's who we've been recommending for years Valley Trucking Insurance.

Speaker 1: 18:14

Yeah, and he's an insurance broker, right. So what's good is he can go and other insurance brokers, which we recommend. They're good for two main reasons. Number one they can go shop the market and get your policies underwritten by any insurance carrier. That is the best option for you. So they might get you a contingent cargo policy from one underwriter. They might get you a general liability policy from another one. They might get you a contingent auto from another one. I mean, that's the best thing is, they can shop the market versus if it's like I'll just use like Allstate, for example, right, someone that works for Allstate can only sell you an Allstate policy. But if they are a broker, they can shop the market just like us, as freight brokers can shop the market and find you the best available options. The second reason that insurance brokers are really good is they can advise you, based on your situation, what policies they would recommend for you. They can give you guidance on hey, if you're more price sensitive, here's an option and here's where its limits are. Or if, hey, based on your customer's requirement. We can't go that route. You're going to need to go with this option because it has to meet your customer's requirements, things like that. So they're knowledgeable and they have a lot of options. So that's my answer there. So value trucking insurance is our recommendation that we just dropped there for you guys.

Speaker 1: 19:43

Last one Do I need two different MC numbers for brokering freight and physically moving freight on my own truck? Short answer is going to just be yes, with the caveat being if you have a dual authority. So if your authority is for broker and carrier, then you're fine. But this question makes me think it's an owner-operator that's looking to get into brokerage. Most of the time you're going to see them under two different MC numbers, two different authorities. If you only have an asset authority, you cannot broker freight under that.

Speaker 1: 20:18

That is illegal. You do not have the author. That would be fraudulent brokering, which is what the TIA labels it, because double brokering would be taking a load and then using that brokerage authority to rebroker it. That would be double brokering. But if you don't have the license to broker, it would be just fraudulent brokering without a license. So yes, and you should also make sure that you're representing yourself in the proper terminology and entity. So if you're speaking to a freight broker and you're looking to put it on your truck, you should be representing yourself as an asset-based company. If you're speaking to a shipper and you don't intend to haul it on your own truck, you should be representing yourself as the freight brokerage entity, since that is the authority that you will use to broker that load out to a third party carrier. Anything else. On that point you can get in some messy, messy situations.

Speaker 2: 21:18

If you represent yourself as an asset based company, and then for sure and for sure, and the procurement side, when you're getting on board the agreements are going to specifically state one or the other. You need to make sure that if you're onboarding with brokerage, that you're not being determined to be a motor carrier and vice versa.

Speaker 1: 21:34

Contract languages. Good stuff, great questions. Keep sending them our way and we will do our best to answer as many as we can. Any final thoughts, ben?

Speaker 2: 21:43

Whether you believe you can or believe you can't you're right, and until next time, go Bills.