Tuesday, April 7, 2020
Ask the most successful freight broker agents how they built their business and they’ll tell you that it starts with relationships and customer service. The better you are at making the process as streamlined as possible for your shippers, the more often they’ll return to you with additional business.
When you act as a single point-of-contact within your shipper’s transportation supply chain, you add even more value, eliminating their need to work directly with carriers to provide transportation. However, it’s important that while you are striving to provide added value, you are also clarifying your role as a freight broker and avoid appearing as a carrier, especially in the language you use in your freight contracts, your marketing and your conversations.
Don't get caught in a lobster trap
Cases like the recent “lobster-heist” ruling against Seneca Logistics Group illustrate why this contractual language is so imperative. As a freight broker, you are protected by the Carmack Amendment, a set of laws adopted by Congress in 1935 that are used to determine who is responsible for a freight claim.
In the “lobster-heist” case, a U.S. district judge found Seneca liable under the Carmack Amendment after a driver they subcontracted to disappeared with an expensive load of lobsters. The reasoning? Seneca was involved in every aspect of shipping the load and conducted themselves as a carrier.
Protect yourself from carrier liability
At USL, we make sure that our freight broker agents have the support they need to provide their customers with all the value-added services they expect while protecting themselves from contractual liabilities. This includes confirming their role as brokers and not carriers. After all, as a freight broker you never possess or handle the freight and therefore are not responsible for any damage that occurs to that freight.
Tips for clarifying your role as a freight broker, not a carrier
Company-wide, there are a few important things we do to make it clear that we are not a carrier:
- We always state that we are a freight broker in our Terms and Conditions.
- We always state that we are a freight broker in all of the shipper/broker agreements that we sign with customers.
- We consistently refer to ourselves on our website as a "freight broker"
We also recommend that all USL freight broker agents protect themselves from liability under the Carmack Amendment by taking the following precautions:
- Be vigilant and correct shippers/customers if they refer to you as a carrier.
- Tell customers that as a USL freight broker, you "arrange" for transportation.
- Always refer to yourself as a freight broker, never a carrier or carrier representative.
- Never sign any freight agreements or freight contracts without guidance, especially if they refer to you as a carrier or common carrier.
It may seem like just a word change: carrier vs. broker. But the Seneca case brings to light how much it can cost you not to get your language right.
The good news is, working with USL can help protect you from this liability. We provide our freight agents with the back-end administrative support to help you deliver all the value-added services your customers need, so that you are always front-of-mind as their go-to freight agent – the person who can connect them to trusted carriers. For more information on this and all the benefits of our agent program, visit uslfreight.com/Agents