Freight 360

Carrier Selection Criteria | Episode 291

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When it comes to vetting motor carriers, each freight broker has their own preferences on what to look for and what to avoid. In this episode, we're opening the hood on our own personal rule sets that we use when selecting motor carriers.

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Speaker 1:

All right, welcome back. Episode 291 of the Freight360 podcast. After bouncing around the last it feels like two months I'm finally in my home office here. I know I got one of these episodes in last month in the home office, but it's been an adventurous start to the year. If you're brand new, we've got plenty of other content at Freight360.net to check out, including the Freight Broker Basics course. If you're looking for an educational option and continue to share us with your friends, Join our group on Facebook, Send us your questions, Comment on YouTube, etc. But, Ben, it's good seeing you in Florida last week. Man Sure, how is it down there? I mean, it's literally going to be 75 here in Buffalo today. So I kind of got lucky with the timing of us coming home, but how's everything down South?

Speaker 2:

Yeah, Weather's nice. Um, I think it might be too nice. I just got a giant electric bill and I think I need to get my AC looked at because it's gotten warm pretty quick Uh well, uh, we drove um South Florida traffic blows my mind Like we had a.

Speaker 1:

We had an evening flight last night to come home and we like met my parents for lunch, figured we'd kill some time there and then go sit at the airport. We flew out of Lauderdale and what should have been an hour and a half drive turned into like three and a half because of like between 95 and the turnpike, the construction car accidents Like I was like just an absolute nightmare.

Speaker 2:

So just one brief point, right Like after we saw you last week I drove over to like Naples area, which is right over like 75 alligator alley, which is just two lane road in each direction, nothing on it for like roughly on a hundred and some miles. Yeah, yep, but I hate, I'm like I genuinely I'm like I thought about I hate. I'm like I genuinely I'm like I thought about, I'm like why do I hate this so much? I'm like because one, it wasn't that much longer. I think it took like an extra 45 minutes than expected.

Speaker 2:

There was like a little bit of construction and I'm like I never really hated driving up north and I'm like I think it's two reasons like the straight lines, people are more inclined to drive like a-holes oh yeah, there's a speed limit of.

Speaker 2:

I mean it's two reasons Like the straight lines, people are more inclined to drive like a-holes oh yeah, there's a speed limit of.

Speaker 2:

I mean, it's a straight line and everyone always jokes down here like, dude, you could do like a buck ten on this road, there's no cops. But the problem is there's two lanes, so it's like one lane, somebody's driving 70. And then for like 35 minutes, somebody just drives right next to them at 70. And then 70, and then for like 35 minutes somebody just drives right next to them at 70 and then nobody can pass and then four or five trucks just start literally like tailgating every car on the left and it's just like the most unsafe, anxiety inducing feeling I've ever had for like the longest period. It was just like a three hour almost panic attack. Just yeah, I watched one truck hit another truck, not sem, semis, just pickup truck. Guy did not look, merged into a lane, ran into the other guy and they pulled on the side of the road and I must have saw at least a half a dozen to a dozen Another, almost like in that little two and a half hour span.

Speaker 1:

Crazy. I will tell you this, though my, my big. The reason I brought that up is like we talk about you know different areas of the country and what it's like for your drivers when they're there, whether it's a time of year or you know storms, or you know Florida for produce and citrus season. Like this is the kind of stuff that, like it, you might think, oh yeah, it's a, it's a hundred miles, that should be an easy two hour deadhead, when, once they're dispatched to go pick up and it's like you don't, you don't necessarily know. That's why it's really important to have good communication with your, with your drivers and dispatchers about times of day road conditions.

Speaker 2:

So much appreciation for drivers for one Cause like I don't drive that far, like I work from home, kind of go within a few miles of my house to everywhere I kind of need. Occasionally we'll go a little bit farther south, but like when I'm on a road trip I'm just like it's so exhausting, like I went to bed at like 730 or eight o'clock that night. I'm like I felt like I shoveled gravel for 12 hours, just driving three hours, and I'm like, no, I'm like I just can't imagine doing that day in and day out for 11 hours a day.

Speaker 1:

It's a special kind of person?

Speaker 2:

for sure it does. So, I mean shout out to all the drivers listening. Super appreciate everything you guys do, because I absolutely could not do that job.

Speaker 1:

Yep. So today, what we're going to do is we're going to in today's episode we're going to piggyback off of last week when we talked about preventing fraud carriers. We're going to run through. I'm going to actually lift the hood and show you the carrier rule set that I use on highway and I'll talk through some of the reasoning for each of the things we've picked. We'll talk through what some of the insights on these carrier vetting platforms are.

Speaker 2:

Um but first I want to do a quick question yeah, what do you got? I do want to jump into sports but, like as we go through this, let's keep an eye out for what is proprietary and what we probably is publicly available and what isn't, as we go through that too we'll talk through the data points where it's pulling from and um, all that good stuff.

Speaker 1:

Uh, sports, we're just getting into the swing of um playoffs for nba, for hockey, like it's. If you're, if you're a big sports nut, like this is a great time of year. This, and like october, well, you also like today. It's thursday, right. So this is nfl draft draft starts tonight, and when this drops on Friday, it'll be the day two of it. So I know what I'll be watching tonight, although last year the Bills literally didn't have any picks on day one.

Speaker 2:

But I'm excited. The Bills, I think, are at 21, but they might trade up at least. Hopefully not for Deion's kid, but we will see.

Speaker 1:

Oh yeah, shador, We'll see. Man, you also got Travis Hunter From Colorado that played with him, who is basically a cornerback and a wide receiver. It's going to be exciting tonight Needless to say, thursday For this draft. But if you're a sports guy or girl, you've got baseballs in full swing now NHL playoffs, nba playoffs, the NFL draft. We already talked about the Masters. Like golf, like this is the time of year when, like literally, it's just pouring sports. So I will tell you like I know we were talking about it when we were grabbing food the one night Like, whenever I go to Florida, my brother and I like we'll always hop on like the hard rock betting app because we don't have it in New York. We have a. There's some betting apps in New York, but like you can VPN, kind of like sports wagers you can place in Florida are just nuts, like literally, like uh, ukrainian, or like Polish ping pong, like dude.

Speaker 2:

So side note, I I watched this I don't know if it was a documentary on sports betting and like how that industry functions and like they make some crazy percentage off a small percentage of like addicted gamblers. Like 90 or 80 percent of the revenue like overwhelming majority came from like one or two percent of people that just bet on everything. The other crazy thing was they showed like one of the fastest growing and gambled on sports was like polish table tennis and they said it's because, dude, the 24 hours a day and they're fast yeah and you can just keep betting on it.

Speaker 2:

So like apparently millions of dollars are bet on these obscure table tennis games.

Speaker 1:

And because they go, they go quick and you can bet on, like everything, who's gonna win, the spread on the points, um, the total number of points. This is wild anyway, um. So anyway, like that's what, having fun down in florida placing some wagers, like there's just there's so many like good sporting events to like tune into and like if you sports gamble, you know that's your personal choice. I always find it makes the game a lot more interesting if you got a little money on it, just because it kind of keeps you tuned in on some stats maybe. But it was a good. It was a good trip. I ended up coming home as a winner, so what? Let's see News. I'll be sending out the newsletter later today, so I haven't seen the latest. It's probably just a bunch of tariff stuff, though. Anything, anything wild and breaking that you're aware of.

Speaker 2:

Well, I know the government decided not to fire Fed Jerome Powell, and they at least look like they might start walking back some of these tariffs. At least that's some of the headlines I read recently.

Speaker 1:

Tariffs At least that's some of the headlines I read recently. Gotcha, well, that's a, that's positive Cause. I mean we talked about this previously like what was the tactic here? Is it like? Is it a um, like, basically I have the bigger gun, you know? Is it a threat? Or is it actually, like you know, we're going to impose these tariffs? Because I always kind of thought with Trump and I guess you never know, but like I always felt like he just would strong arm guys, you know, strong arm industries and countries, to try and get them to meet at whatever he considers as the middle right to get what he wants, without actually intending to do the thing he might threaten. But I have no idea. I'm curious if you think the full amount of tariffs that have been discussed in the last couple of months, if they ever were intended to all go into place.

Speaker 2:

No, I don't think they were. I think it was strong arm, threw out a huge number to work towards the middle. I think that was the ultimate objective. However, I don't think there was anywhere near enough thought put into the repercussions, unintended consequences, of how a negotiation would play out and what happens in the interim, even if you theoretically won. Because the other thing was I had read, you know, like when he had kind of first said this is what he wanted to achieve, went to his advisors and said, hey, come back and research the tariffs, and what they came back with was an entirely a very, very complicated, very, very long report on how tariffs exist and why, and also like they have been developed over decades and decades of negotiations with different countries, with exclusions, with things that are imposed, which isn't, which country needs more of which good, so to try to go. And then what I heard again, whether this is true or not was that like he kind of went back and said this is too complicated, just simplify it, which is how he ended up with a chart that he went out and showed everybody where they're taxing penguins, apparently, and nobody thought to read through this, just because it seemed like an easier way, I personally think this was more of him creating a problem that didn't exist so that he could get credit for trying to negotiate something. I mean, granted, he's cared about it and talked about it since the 80s, but that doesn't mean they were a problem and that doesn't mean that the trade imbalance was actually a negative or a net negative or positive to either country. Because the truth is, the GDP of the US has grown over the past 40 years. The wealth of individual people in the United States has grown, income has grown, income has grown, gdp has grown and we have moved away from jobs that were dangerous, that folks didn't want to work, that were long hours, that people didn't want to do.

Speaker 2:

And I heard this poll which really stuck with me. I forget which large polling company said like a thousand or whatever, a few thousand Americans. They said should we bring American jobs back? 80% of people said yes. And then they asked the same people would you take that job? And they said no, I wouldn't take it, but someone else should. So everyone thought that they should have these jobs here, but nobody wants them and we haven't trained for them and we don't have the buildings to put them in and we can't get the materials and we don't have the machines, and any of those things to fix would take years of planning and none of that was discussed, none of that was implemented. It was basically just this like I don't know, whatever.

Speaker 1:

Well, we'll, we'll see how things shake up here, because we're hitting the hundred day mark of the Trump 2.0 presidency. So I think there's that's usually like the benchmark, like how the first hundred days go and you know where things headed. But anyway, well, here.

Speaker 2:

One last thing. So the thing that I was listening to this morning was an interview with this Iowan farmer who grows soybeans and third generation farm since 1901. And like 60 percent of the soybeans we grow in the United States get exported to China, first off. The second thing was they were talking about what it looked like in the farming industry prior to those trade agreements in the 80s, and there was a farm catastrophe Interest rates were too high, land was too expensive and we grew more than we consumed, so there was literally not enough people to buy this and it took decades to negotiate and get China to buy the soybeans into the 90s to even start this, which allowed farmers to make more money, continue to grow crops and actually succeed and finance their farms. And in a matter of weeks that was thrown out the window towards some goal that nobody really understands.

Speaker 1:

Yeah, that's wild Soybean farmer and something I've never really thought too much about. All right, well, let's get into our carrier vetting discussion as a round two or part two from last week. So what I've done here is I actually pulled up. We've talked about the various different tools. So, like you use my carrier packets or portal Highway, you've used or do use Carrier 411. I use Highway, I've used my carrier packets RMIS, rmis. So the ones I haven't used are carrier assure. I mean, I've seen the free, I've tried like the free demo on it. Um, and I'm not terribly savvy in carrier 411, I've looked at it and haven't really used it a whole lot, quite a bit it's.

Speaker 2:

it's good, I mean. And the nice thing about like kind of my position over the past few years is like I've had access to most of them at the same time, so like I would have RMIS, carrier 411, highway and my carrier packets. So when I would look at a carrier, I would have all four open and I would look to see what showed up where, which ones had it and which ones didn't, which obviously gives me a different perspective, because most companies are not going to use more than one. I mean, you wouldn't use more than one in this case. Yeah, it's just a cost thing.

Speaker 1:

I've seen like the larger they get, you might have a little redundancy for a carrier compliance team or a carrier development team. So I want to. When I run through this rule set, I'm going to give you, I'm going to say they probably fall into like one of three categories. Like each rule, it's either going to be like a safety rule, a fraud prevention rule or a like a legal rule. Okay, and I may change that analysis as we go through here, but those are kind of the three things that I tend to always generalize them at in my head and these are in no particular order. These are just the order in which they are listed on my screen right now and I'm curious your feedback on that.

Speaker 1:

So also, this is I'm talking about general full truckload freight. I'm not talking hazmat, I'm not talking reefer, I'm not talking high dollar value, because you can add additional rules in for you know, for example, if you have a power only, you want to make sure you check for trailer interchange, I'm not checking for that. Or if it's hazmat, you want to check for hazmat endorsement, et cetera. Right For these different specialized halls. But we're looking at, you know, your standard full truck load.

Speaker 2:

Um, basic rules here, okay, um, real quick on that one, just on the we'll call it the. I don't want to say obscure, but the very specific ones that aren't as common. I think a very simple way to look at this, and everyone kind of jokes it's like first principles, because that term is so overused these days. But in my head all that means is how can you make this as simple as possible? Okay, if I've got a load, and again, whether it's hazmat, whether it's over-dimensional, oversized, whether it's high dollar tanker, like, I've at least moved a few loads in a lot of these obscure categories over the years, and the way I always look at it is first I just ask a lot of questions from my customer what are your requirements? Can you please list everything you could think of? And a lot of the time the shipper has a document, like in the tanker. They're like here's all the requirements and their bullet points and a lot of the hazmat stuff. Hey, here is the document that has I can't remember the name, it's called sds a safety data sheet, and it outlines everything that that product details what hazmat search are required, and then you send this right to the carrier. So the point is ask what all of the requirements are and whatever they tell you always ask this question is there anything else I need to be aware of? Just to make sure that person doesn't assume that you know something you don't right, especially in your first load or two. I write down everything that they're telling me and then I just go and start talking to the carriers and I go here's my list of requirements, do you meet them? And most of the time, like I learned everything I needed to from the carrier side cares like hey, this is what this is, we have this, here's why we don't have this. And then I take notes.

Speaker 2:

So, like by the end of moving my first load, I have a really good understanding of not only what the requirements are, who has them, who doesn't, and why they don't have some of these, because that factors into what you're going to charge. So like that is always my first step before I'm quoting let me get the requirements, let me go put some work into this, let me go make sure I can get you who you need that has what you need. And then again, because like over dimension and heavy halls are really good example, like you might have one that needs, like routes run through a state and approved. You might need pilot cars, you might need a whole lot of things in one state that you don't need in another state. But if you call a carrier that it specializes in heavy haul, they will tell you in a 10 minute phone call why and what you need and what is related to where that lane is coming from and going to.

Speaker 2:

And if you start writing this stuff down, like this is how you learn on the job, like you don't need to go spend a bunch of time researching how to move something if you don't have it to move. Find the thing that needs moved, find the need. Then go learn how to do it and make sure you just cross every T and dot every I. And then again to what we're going to talk about today. All these systems have the ability to give you insight into whether or not that carrier actually has these things.

Speaker 1:

All right. So I'll get into the rules here. I'm going to skip the ones that are like, specific to highway as far as like their multi-factor authentication. I'll generically mention them, but I just I won't go into detail because it's not applicable if you're not using highway, all right. So my first one carrier must not have an acute or critical safety violation.

Speaker 1:

All right, this is one that a lot of brokers probably don't have in have on their rule set. You know, for, for, uh, pierce, worldwide, like we, we draw the line at acute safety violations, like it's that's pretty bad, right, like we're fairly loose on the um, the csa scores at you know as a whole, but we say, if you have an acute safety violation, these are like your severe infractions, um, you're, you're going, our rule set, ok, again, not saying you can't override some of this stuff. If you've got, like a safety letter or other things of that nature, but that is one that will ding us right away. For, for, you know, misbehavior on the safety side, right, and that one falls into your safety category, ok. Next one up equipment not listed on scheduled autos. All right, we take a minute to talk about this if you want.

Speaker 1:

So this one falls down to what I would call your, your legal side of operating. Are you operating? Is the carrier operating the way that they should be? So equipment not listed on a scheduled auto. What this means is, if a carrier has a their insurance policy, if it's written as a scheduled autos policy, which means that only the trucks listed on that policy by vin number are the ones that are insured if their vin number is not on that policy, they are not covered by that insurance policy. And what this rule set means is that, um, maybe there was an inspection or an eld connection either way at some point. Um, in the recent past, a vin number for this motor carrier, um was identified and it's not it's not an insurance certificate right.

Speaker 2:

Common one would be a roadside inspection so, and and I don't have an insurance cert in front of me, but there's three categories, if I remember. So you have all auto, which means any.

Speaker 1:

I'll just pull one. I'll pull one up here so you can talk through it. So scheduled autos, here it is. Yeah, you've got. So this is your, your auto liability here. So any auto, owned autos, only hired autos, only scheduled autos, non-owned autos only Okay, so I'll go backwards.

Speaker 2:

Non-owned autos is when a trucking company rents a tractor or trailer or both and that's how it's insured. Like I don't own it, I'm leasing it and that inch that is insured by me. Okay, the second one, which is what was the second one? You?

Speaker 1:

have hired.

Speaker 2:

Hired, so this is a lease on driver. Yep, so that means hey, I have insurance for so. Nate has a trucking company across the street from mine. I got extra loads. Nate's got time this week. He's gonna run a load for me.

Speaker 2:

The first thing you need to make sure is is hired, auto checked, meaning like if I hired nate's driver to go run a load for me and he first thing you need to make sure is is hired auto checked, meaning like if I hired Nate's driver to go run a load for me and he puts a magnet on the side of his truck, which we see lots of pictures on Instagram of, like why anyone would do this. This is that scenario. Nate's slow on business this week because his customer is waiting for orders to come in. His driver is going to work for me this week. I give his driver a magnet. He's a hired auto.

Speaker 2:

The thing you want to ask for if that is the case is hey, I need the lease on agreement, because without the lease on agreement, there is no legal proof or verification that I actually hired Nate. Nate putting a magnet on his truck does not mean that I actually did the proper legal agreement. Cause, again, why does that matter? If there's an incident and the insurance comes into play, they're going to go. Yeah, we're not covering Nate's truck just because it has a magnet on it. Where's the lease agreement? If I can't give the lease agreement to the insurance company, there's no insurance.

Speaker 1:

Nobody's going to pay that, yeah, and the reality is the vast majority of carriers are using the scheduled autos, which is the other one, and that is literally.

Speaker 1:

You're going to list year, make, model and VIN number of every tractor that's going to be on your policy, and as you lease somebody on, you need to have them added to your policy and if they're not hauling for you and you want to pull them off your policy, that's up to you. But you have to make sure that whenever they're hauling under your MC as a carrier carrier, that they are on that policy, otherwise they are not insured.

Speaker 2:

And here's the thing I want to point out, right Like I have for sure talked to carriers that have told me how prevalent this is, specifically in California, where, especially in an area where, like in an, in a market where carriers are having a tough time making the money they should, right, so rates are depressed. So there are smaller carriers like I can't afford my insurance, so they don't put their cargo on there. They don't have that insurance, right, so they'll run a little cheaper than a carrier that has an insurance bill. Why? Because they have less expenses.

Speaker 2:

So if you're booking a truck for three or $400 below the DAT average or below the minimum, right, you really want to look for these things, because if they're able to run it that cheap, maybe it's a backhaul and maybe it's fine, but I'm always looking for those and making sure that the carrier I hired didn't just call their buddy and go hey, you want to take this load, because that is happening a lot. So like making sure the truck you booked, their VIN, is listed on scheduled auto, because we're catching this at least a handful of times a week where the truck is booked and the driver goes hey man, the insurance just didn't update it yet and I told a broker the other day I'm like, well, that means it's not insured, like he can't pick up the load if he's not on the insurance cert. So the solution is you've got to call the insurance company directly, you as the broker, and say hey, I would like to verify if this VIN is listed on the accord sheet. Can you send it to me directly?

Speaker 1:

Well, if you have like, we use highway connect, so we have all, like we have all the insurance certificates. So that's like if you're paying for a monitoring and verification service that includes all that. Here's the thing.

Speaker 2:

Not all the monitoring services have VIN level data. I'm not going to go into like which ones do and don't, but a lot of them only have carrier level data, meaning like you cannot see the insurance search sometimes, or you can see the accord, the front sheet. But I've seen a lot of them recently and some of the other ones that like I can't see the attachment. It literally isn't in there, so like I can't see the vins on the scheduled piece. It just has the front deck gotcha, and if they're not there I can't tell well, props to highway, because I've never had an issue with highway on it.

Speaker 1:

Yeah, anyway, that's good. It's a good place to one last question yes, so, and this came up yesterday.

Speaker 2:

So BIPD, which I think is bodily injury, bodily injury, personal damage, personal damage which is required by the FMCSA to legally drive a truck, it's a 750 grand right.

Speaker 1:

Yeah, most people have a million.

Speaker 2:

Okay, Now the question I have.

Speaker 1:

I wanted to ask is bodily injury, property damage?

Speaker 2:

property damage, not personal, so is auto liability and general liability fall under that bucket.

Speaker 1:

They are. I'll pull the sheet back up, but it's two different. It's two different spots on there Two different boxes.

Speaker 2:

Yeah, I've seen carriers have general get through it and I've seen I'll read one off for you.

Speaker 1:

Okay, so here's a carrier's insurance cert and it's got your commercial general liability. Um, this one has a million. And then you have auto liability. I'm sorry I should go, yeah, auto liability, which has a million dollars, and it does list on here bodily injury, property damage. So those fall into your auto liability, which makes sense. This is the same as, like your car, like your car insurance, this will be your liability policy. So here's the question If you damage another car or house or something, right?

Speaker 2:

What's general liability for? Then? If that covers property damage and a person, what's general liability for?

Speaker 1:

then If that covers property damage and a person falls like, yeah, like general liability in just about anything is like a very, like very generic policy. So, like we have it as freight brokers very often, like, if there's a slip trip or fall in our office, the general liability policy is what someone's going to sue if they choose to do that in our office. The general liability policy is what someone's going to sue if they choose to do that. Auto liability and cargo are the two that like we're typically vetting out for a carrier. We want to know, like, if they get in an accident, is the damage that they're going to cause to property or bottle, to someone's body or person? Is that going to be covered? And then, number two, cargo if the freight is damaged, is that going to be covered?

Speaker 2:

Now, here's the biggest misconception, I think, in the industry, and I see this and I saw some two shipper agreements yesterday. One this morning is a shipper requires a broker to meet their requirements and it's very common for a shipper to say we just need you to have contingent cargo for 300 grand. And then the broker goes hey, we're good, we've got contingent cargo for 300 grand. They go to move a $250,000 load, say, and they book a truck, and most common for a truck is, I would say, 100,000 in cargo and they assume that their 300 in contingent is going to cover the cargo. It does not. Now the only thing that is really covering the cargo is the carrier's cargo. So if you are moving something that is a value beyond the carrier's cargo insurance, you need to use a product like load shore or talk to your insurance agent there spike insurance, spike gap, all risk, all right.

Speaker 1:

Well, I'm going to rattle through a bunch more of these here. Carrier doesn't have any TI watchdog reports. So TI's watchdog program, it is managed by Highway now. It used to be a standalone thing, but this is kind of like your, um, your carrier 411 freight guard, so we're looking for. Do they have a negative report against them? Uh, next one, another, another insurance one. So again, the ti watchdog that's going to fall under your fraud prevention. Um, the next one is uh, if they have a scheduled autos policy, they must have the VIN numbers listed on their insurance, so kind of like the schedule I was saying there's like a lot of different ways to set the rules up. We have it like it's checking to see was there an inspection done or, you know, have they been seen and they're not listed on the insurance? Do they even have the insurance with the VIN numbers listed on it, et cetera. So that's another one of those must have a DOT and an MC number. This is just your legal ability to operate again, if this is your standard full truckload, like interstate.

Speaker 2:

That's the thing I wanted you to cover.

Speaker 1:

If you're looking at your, moving a load, separate rule set. Ok, yeah, yeah, like a Texas only or a California. We're looking at just our. You know our 48 contiguous here.

Speaker 1:

Carrier must have an operating authority for property. That is their FMCSA authority to operate. It's a motor carrier for property. We're checking for that. All right, here's an interesting one. Carrier must have a verified US tax identifier that matches its legal name with the IRS. Verified US tax identifier that matches its legal name with the IRS. This is a fraud prevention one that we threw on last year that has to basically do with like carriers falsely representing themselves. Is it like something with like a not? It basically checks for non legitimacy. Is what it comes down to Like? They have to have a legit company that's um, registered with the irs, um, and that's going to weed out any of these like chintzy dbas, that like pop up remind me to talk off air, because I don't want to go through the instances of loopholes that I found in a lot of these yeah, let's not, let's not teach people how to break the rule.

Speaker 2:

I don't want to teach people how to defraud the system, but there are three of them in there that I've seen that you and I will talk off air about of how and where.

Speaker 1:

All right. Next, one Carrier is not currently out of service. Right Makes sense. That's your legal ability to operate. If DOT puts you out of service, you cannot be hauling loads. If the FMC, if DOT puts you out of service, you cannot be hauling loads. If rated carrier must have a satisfactory safety rating. So we already know from from Ken at DAT it's like 90, some percent of carriers are not rated. So this is like a tough one. But if they are rated, obviously we've got satisfactory conditional and unsat OK. So what our rules check for is we want satisfactory Conditional will fail. This Doesn't mean we can't use them. It just means it's going to fail our rules and we'll have to take a second look at it. So that's why I like this rule. I've used that rule since day one in brokerage at other companies.

Speaker 2:

Why do you use that, knowing that the FMCSA, like 80% of the trucks, haven't even been able to get through this process, even though they?

Speaker 1:

should, because if you go back 10 years, the stats weren't that skewed.

Speaker 2:

But why do you use it now? Because I remember back then.

Speaker 1:

I want to know if a carrier is at, if they're at, conditional. I want to know if they're a conditional carrier so I can take a look into why. Like, what did they do? What have they done since they were put on conditional status to improve themselves? Because even if it's only catching one out of ten, I'd rather know that that one out of ten fits into that rule versus not check for it at all. So that's a good, let's see. Here we go.

Speaker 1:

Now we're getting into CSA categories, carrier must. So we, basically you're big, you have your five main report, report or publicly reported CSA categories. One of them is controlled substance and alcohol. So we've, if they fail this, we fly your mind away. Meaning, if they hit the federal threshold on the controlled substance category, we're immediately going to flag this carrier and, uh, you know, try not to use them unless you know. We can, if we, if it's like a last option and we can verify that the the driver that popped or failed the drug test or was drunk while driving, or whatever, make sure that they've been terminated, et cetera, right, while driving or whatever, make sure that they've been terminated, et cetera, right. That's the kind of stuff we want to look out for. So we have that as a standalone category. If they fail this, you know you're going to fail our rules. Now if you look at the remaining rule sets, we're saying all right out of the five. So you've got unsafe driving, hours of service compliance, maintenance, controlled substance and then driver fitness. Out of those five, we let them be over threshold in two before we get flagged. All right. So if they're over in three of the five, it's a pretty bad carrier. So we're fairly more lenient on the safety side here, minus controlled substance, and I talked about the acute safety incidents earlier but we're letting them per se be lenient in hours of service compliance or driver fitness and still be able to pass our rules. So that is a judgment call that you need to make as a brokerage on how you want to treat your carriers.

Speaker 1:

I've seen companies that don't even look at it's these at all. They basically say like if you are, um, you know, if you're legally able to operate, we'll use you, whereas some some uh companies will say if they fail, it's not even failing, it's, it's being over the threshold in a certain category. If you're over that federal threshold, um, we're not going to use you if you go over on any of them, whereas we're kind of in the middle. So you know, use your judgment here.

Speaker 1:

Some of these are like really like hours of service compliance. Like we're not, it doesn't mean that you drove out of your you know hours of service. There's all these like little sub rules and inspection, like if you're, if you don't have a backup paper logbook in your cab, like that dings you for hours of service compliance. Driver fitness like if you're uh, if you didn't, if you don't have like your updated paperwork on, like your cdl or registration whatever, like in your cab you know. Like let's say, you just got a new driver's license and you got the paper one and your new one's in the mail or whatever. Like they can ding you for like some of the stupidest stuff.

Speaker 2:

Yeah here's another one.

Speaker 1:

Try to be a little lenient on, like the administrative taxing ones.

Speaker 2:

but here's one that I heard too, from drivers that like okay, so you have required lights on your vehicle, right, just like a car, yep. But clearly everyone's seen a tractor trailer that has like additional lights on it, right, yeah, lights maybe on the trailer, maybe additional lights on the front end, like lights maybe on the trailer, maybe additional lights on the front end. If you put additional lights that aren't required on your tractor and one is out, you could get dinged in your inspection. Yeah, it's like I wasn't required to put it on in any way, and if you do put it on, then it has to work, which to me also makes very little sense.

Speaker 1:

Yeah, all right. So now we'll move on to some of the the fraud prevention tools here. Right, so we've got. Carrier must not have an address, an address located in postal code near or in Glendale, california. So this is, this is what everyone knows. Glendale and the surrounding area is like a fraud hotspot. Again, we're not saying we can't use this carrier. They are going to just want to take a second look. Yeah, they're going to. They're going to fail our, our initial rule set here and require a second look. Carrier must have one authorized user who has accessed highway from a country in North America. So this, this is like if you got your, your carrier who uses a dispatch service or something over in Armenia, fine, as long as they were initially like someone in the US or North America. Set them up, okay, yeah, but this will catch some of those guys that don't have any trucks never intended to you know operate legitimately and they're over in some foreign country.

Speaker 2:

Let's do this. I don't know how many more that we kind of wanted to go through, but I also wanted to cover like just the basics on how we used a veta carrier and other things to kind of look for in like any system let me spit.

Speaker 1:

Give me two minutes. I'll spit through the rest of these and we can talk through that. All right, I'll just I'll rattle through these for what it's worth. Um, no identity alerts. So we're talking about stolen identity, double brokering, things like that reported on them, using a factoring or insurance company that's known to deal with double brokering. Contact info changed on FMCSA in the last two months. That's a huge one.

Speaker 2:

That's a huge one.

Speaker 1:

We've talked about that in the past. I'm looking for you do two months, we do 60 days is what we're looking at? Okay, one year of active authority, again just to benchmark. We can override that. Some people use 180 days, some people use 90 days. We just have it set at one year. And then I'm checking for a million in liability, 100k cargo and their insurance does not lapse within seven days. So those are your ability to legally operate and insured. So I rattled through a lot of those. I skipped some of the specific highway ones that just are, like you know, authentication. But, as you can see, ours is very focused on identity and fraud prevention and less so on the the safety side of it. We're a little bit more lenient there.

Speaker 1:

I wouldn't say we're rolling the dice on safety but we're definitely more hyper-focused on the identity piece, fraud prevention, et cetera. So now to your point about how do we use to onboard carriers and vet them and all that. What do you got?

Speaker 2:

Well, and I think, going back to the insurance, right, I think anybody on your team needs to understand the basics right. If you have a brokerage or even an agency, anyone that is talking to carriers, I think, needs to understand the basics right. We covered the basics on insurance. You should be teaching every one of those folks how to look at an insurance stock and what is important for your company and what to see there manually. It doesn't matter what automated system you have. You need them to be able to understand these things because these are the risks and these are the things that your shipper is paying you to do. By the way, it's not to hire a truck, it's hire a truck that has these specific things. So you need to be able to look and understand the difference between auto cargo in general and whether or not the truck you booked has what you think it is Right For sure. That's like one of the top ones. The other is, like you said, just looking at active authority and the age of it, right, and whether you're going to the FMCSA, to SaferWeb, which anybody can access, right, or you're using any of the tools that are out there. I think name change and equipments listed is one of the big things you got to be able to see Whether you're looking at the insurance stock or you've got a vetting system that will give you VIN level data. You need to be able to verify the truck you booked is owned by that company, if it's leased by that company or if it's hired on by that company, because there's different things for each. Like we said earlier, if it's leased on, you need to copy the lease agreement because otherwise here's the risk to you.

Speaker 2:

Brokers will say this all the time, but what does it matter? Like they said, they got it and they got the magnet on the truck, because if there's an incident, nobody's going to pay that claim. And the analogy I've used I'm like you just gambled with $100,000 of cargo to make $175. Would you go into a casino and put $100,000 on the table to win 200 bucks? Probably not. But you're doing it just because you want to prioritize speed and to get the next load moved instead of paying attention to the risk you're taking. Nobody's saying you're going to mitigate every risk and nobody's saying you shouldn't take some. You need to take risk to be able to make return in any type of business, but you've got to understand the specific risks you're taking and where you're taking them you know we should do it for, like another.

Speaker 1:

another secret part in the series is like uh, maybe next week or in the future, like we'll run through as if we don't have any vetting software. Right, we'll run through the manual process on a carrier, right, like step by step by step, where we're pulling the data from.

Speaker 2:

That'd be fun Little thought experiment, because here's the next one just from, like a high level. If you're booking a van load, you need to make sure this company owns a van, right? Most of the software that you're using almost all of them can tell you what is registered with a trucking company. If they have one flatbed and you just book two van loads with them, like that's a red flag, doesn't mean you don't use them, but ask a few more questions. Did you hire on these two guys? Did you lease these trailers? Like what's the scenario?

Speaker 2:

Because some piece is missing from this puzzle. It's like there's not one rule or rule set that will prevent everything or that you can put in place, because every brokerage has different risk, tolerances, moves, different kinds of freight. Like a brokerage that's running transactional freight and booking, you know, loads through the load board to cover everything every day is a different risk than a brokerage that has contracted freight that books 40 loads a day with the same 38 trucks, right, and they need one or two new trucks. Like very different risk, very different business models. They're all a little different. That's why I feel like understanding the basics of do they own this truck, is it registered, is it insured, okay, and then I think the final bucket just simply right is am I talking to the person that I think I am right.

Speaker 2:

However, you want to describe that right, because, one, criminals know what brokers are doing because most of them have probably operated legitimately at one point. Right? So it's like here's the one real common one. Hey, I see your verified email and whatever RMS, whether it's any of these tools, right. And then dispatcher goes oh, I don't have access to that email, just forward it to my Gmail, it's faster, okay. Well, if I'm a criminal, what is the easiest way for me to be able to steal your load? Tell you, I don't have access to the verified email. That requires some multi-factor authentication or driver's license. You send it to a Gmail I just created. Now, I just stole your load and you're never getting it back. At that point, right. Like these are the little things you want to see.

Speaker 2:

And like I think one of the easiest ways to do this is going to the FMCSA change log. Okay, if that phone number has been changed recently or at all, or the emails are, I always just call the oldest phone number because in every scenario, like, you'll usually talk to the original owner Like hey, here's what happened, got a new phone system. That's us. This is my cell phone. I now hired a team and we have a new phone line, so that's where the phone number change came from. Okay, that all adds up Right Because, like I've called these for clients when they've had hostage load situations, first thing I do is call the old phone number and I've heard that guy go yeah, somebody stole my login credentials, don't book a load with us.

Speaker 2:

And it's like if that brokerage just would have made one 30 second phone call, they could have prevented booking that fraudulent truck and never would have had the load stolen. So I think one of the best ways to just again, none of them are foolproof, but that's one of the things that, like I'm always looking for. If I see two or three other red flags, I'm for sure calling that phone number and just making sure the person I'm talking to, either via email or that called me, is who I think I'm talking to.

Speaker 1:

Yep, no, that's huge. That's a little can can, a little can go a long way for sure. So well, we scratched the surface here.

Speaker 2:

I'm a lot of uh that's exactly right.

Speaker 1:

That's exactly right. I definitely want to continue this on in another episode too, because there's a there's a lot to go, you know, go into especially, um, like the granular level of, like you know, we could talk through some of the, some of the tactics that these, these fraud carriers are using and how to protect yourself. But it's a pretty good start to it. Yeah, what do you think? Any final thoughts?

Speaker 2:

Whether you believe you can or believe you can't, you're right.

Speaker 1:

And until next time we'll see how the draft goes. Go Bills.

People on this episode

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Benjamin Kowalski

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Nate Cross

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